KPMG Law Ukraine defended Representative Office of the international pharmaceutical company

KPMG Law Ukraine team has successfully represented interests of the Representative Office of one of the world's largest pharmaceutical companies in the tax dispute regarding re-qualification of the activity of the RO into the "permanent establishment".

As a result of the tax audit, the tax authority concluded that the activity of RO for promotion of pharmaceuticals and registration of pharmaceuticals produced by other non-resident companies had commercial nature. Based on the above, the tax authority decided that RO was de-facto a permanent establishment in the territory of Ukraine and received income derived from Ukraine. As a result, the tax authority assessed additional tax liabilities for the non-resident income with its source from Ukraine for three years covered by the tax audit.

Due to efforts of KPMG Law Ukraine, courts of all instances have confirmed the “non-commercial” status of the RO and cancelled illegal tax notice-decisions.

Based on analysis of the aforementioned arguments and evidences, provided by KPMG Law Ukraine attorneys, including RO’s regulation, charter of the parent company, parent company distribution agreements and documents confirming trademark rights, the Supreme Court recognized cassation claim of the tax authority unreasonable and left valid the court decision in favour of RO.

The project was led by Oksana Olekhova, partner, and Larysa Antoshchuk, head of Tax Dispute Resolution Practice. Other experts attracted to the project are Nataliia Musiienko, Yurii Oliinyk, Iryna Khyliak, Yana Bazia, Sofiia Baranovska and Artur Horholiuk.