EQUITY law firm defended the interests of a well-known dye-manufacturer

On March 10, 2015 EQUITY lawyers successfully represented interests of EKMI company, a manufacturer of hair-dyes Acme-Color, in the Kyiv Appellatel Administrative Court. The subject matter of consideration by the court was the tax notice-decision of the STI in Obukhiv district, Kyiv region.

The audit related to the agreements on supply of chemical raw materials from two different companies for the period since 2011. The inspection body, relying solely on the record of the interrogation of persons allegedly involved in the activities of suppliers, independently recognized activity of the enterprises as fictitious, and supply of raw materials in favor of Acme-Color – simulated agreements.

EKMI management did not agree with the adopted tax notice-decision and appealed it in court. During the proceedings, the plaintiff provided all the relevant evidence which suggests that the supply documentation is made properly, the actions were actually performed, and, moreover, the delivered raw materials were used in the production of dyes.

Despite the evidence submitted, the court of first instance denied the EKMI’s claims.

EQUITY lawyers represented the client's interests in the court of appeal, where, thanks to successfully prepared and successfully implemented legal position the tax authority’s findings were refuted. Kyiv Appellate Administrative Court made a decision to reverse the decision of the first instance and recognized the tax notice-decision as illegal.

It is worth noting that the court decision was a landmark one in the context of formation of court practice, because it is used now for protection of the rights of bona fide taxpayers. Thus, it became possible to prevent tax authorities from attempting to extend the discovered tax violations committed by third parties to all counterparties of such third parties.

The client's interests in court were represented by a EQUITY partner Sergiy Chuyev and associate Andriy Ivaniv.