Vadim Medvedev, Senior Associate, AVELLUM
Market of legal services in Tax area was significantly influenced by both global trends and national legislative changes.
Global initiatives in BEPS project resulted in significant shift towards transparency and compliance of international structures. Moreover, those initiatives caused further alignment of legal structures with underlying economic activities, increase in substance of legal entities. In addition, we see increase of interest towards compliant and safer international succession structures.
Changes in domestic tax rules resulted in decrease of demand for legal advice on corporate income tax matters – significant part of such advisory work shifted to accountant-based tax practices.
Another significant change in Ukrainian tax practice is decrease in volume of VAT refund litigations (most likely caused by improvement of VAT refund procedures in 2016). We expect further decrease in VAT refund cases in 2017 in light of introduction of transparent VAT refund registry.
On the other hand, we have marked an inflow of high profile and more complicated tax disputes related to international tax matters and legal treatment of certain transactions. It is evident that tax authorities improved their working standards, and, as a result, we can witness a higher complexity of tax assessments and related disputes.
Another important observation is an improvement in administrative review of tax assessments. The amount of tax assessments that were cancelled by the State Fiscal Service of Ukraine steadily increases and tax authorities demonstrated more reasonable approach to administrative appeals.
We expect that all these trends will remain in 2017. We would also welcome a decrease in volume of erroneous challenges of taxpayers’ transactions as sham by tax authorities. Furthermore, the shift of tax agenda to more sophisticated tax matters is highly anticipated. However, we do not expect a U-turn regarding the above within a one year period.