A Ukraine Supreme Court decision dated 1 June 2022 has been published regarding the requirement to submit documentation supporting tax results during an audit. The case concerned a Ukraine taxpayer that had undergone an audit, during which it was found that a debt to a Cyprus company was included in the taxpayer’s balance sheet as on 1 January 2018 but was removed from the balance sheet as of 20 September 2018, with no evidence of payment provided by the taxpayer. Considering this, the tax authority concluded that this was a bad debt for which the statute of limitations had expired and, therefore, should be treated as income of the taxpayer, resulting in an understatement of tax by the taxpayer. This was appealed by the taxpayer to the court of first instance, with the taxpayer providing further documentation regarding the recognition of the debt and its voluntary repayment. Considering the additional documentation, the court of first instance ruled in favor of the taxpayer. The case then made its way through the appeals court and finally to the Supreme Court.
Source Orbitax
