ARZINGER successfully represented an international group in a dispute concerning the application of the Convention between Ukraine and Cyprus

ARZINGER successfully represented an international group in a dispute concerning the application of the Convention between Ukraine and Cyprus.

ARZINGER’s Tax and Customs Litigation team successfully represented the interests of a Ukrainian company that forms part of an international multinational corporation — one of the world’s leading producers of oils and fats.

The dispute concerned the application of tax relief provided for under the Convention between Ukraine and the Republic of Cyprus for the avoidance of double taxation.

The tax authority claimed that the client had wrongly applied the preferential tax rate on non-resident income. In the tax authority’s view, the Cypriot company — the recipient of passive income from Ukraine — was not the actual (beneficial) owner of that income, but acted as a conduit company.

ARZINGER’s associates compiled a comprehensive evidence base and refuted the tax authority’s arguments. The team proved that the Cypriot company is the actual (beneficial) owner of the relevant income. Consequently, the client was entitled to apply the reduced rate of tax on non-resident income.

Following nearly three years of legal proceedings, the courts upheld the taxpayer’s position and set aside the additional tax assessments. They confirmed the lawful application of the provisions of the international treaty. The ARZINGER team handled the case at every stage.

The ARZINGER team working on the project consisted of associate Iryna Rokishchuk and associate, attorney-at-law Illia Menchak. Legal representation and project management were provided by partner and attorney-at-law Nikita Larionov.

The outcome of this case once again demonstrates the high level of professionalism, expertise and experience of the ARZINGER team, which consistently confirms its status as a leader in the field of tax litigation in Ukraine.