Ilyashev & Partners Law Firm successfully represented a Ukrainian hotel chain in a legal dispute with the State Tax Service of Ukraine and secured the cancellation of tax assessment notices totaling over UAH 4 million.
As part of its operations, the specified hotel chain holds wholesale and retail licenses for the sale of alcoholic beverages, stored in retail outlets and registered storage facilities. In 2022, officials of the Central interregional directorate of the State Tax Service of Ukraine conducted an inspection of the company's warehouse, which resulted in tax assessment notices assessing penalties totaling over UAH 4 million for violating alcohol distribution and storage rules. Among the charges brought against the hotel chain were storage in areas not intended for alcoholic beverages, production without a license, false reporting of their sale and purchase volumes, and storing without excise tax stamps.
The hotel chain appealed tax assessment notices to the State Tax Service of Ukraine, but the regulatory authority upheld the decision. In order to challenge the tax assessment notices, the company enlisted the assistance of Ilyashev & Partners.
For the protection of the client’s interests, Ilyashev & Partners’ team collected evidence that the tax assessment notices were unlawful, the tax inspection results were biased and its results were based solely on the assumptions made by the tax authority representatives.
In court, Ilyashev & Partners' attorneys proved that the company stored alcoholic beverages according to law and that the hotel chain did not participate in the illegal production of alcoholic beverages. On 25 September 2023, the Kyiv District Administrative Court invalidated and cancelled all tax assessment notices.
Disagreeing with the first-instance court decision, the Central interregional directorate of the State Tax Service for work with large taxpayers filed an appeal with the Sixth Administrative Court of Appeal.
Upon reviewing the evidence collected by Ilyashev & Partners' team, its entirety, as well as the established facts of the case and the validity of the law application, the Sixth Administrative Court of Appeal upheld the first instance court's decision on 20 August 2024 and rejected the State Tax Service's appeal.
The case was handled by Ivan Maryniuk, Ilyashev & Partners’ Head of Tax Law Practice, and Oleksandr Rudenko, Counsel.