Sat, Feb
45 New Articles

Deal 5: Legal Counsel Viktor Kachurenko on the Tax Dispute over Ukrainian Tax Authorities

Deal 5: Legal Counsel Viktor Kachurenko on the Tax Dispute over Ukrainian Tax Authorities

Deal 5

On August 25th, 2016, CEELM reported that Shell Exploration & Production Ukraine Investments (IV) B.V. was represented by Vasil Kisil & Partners in a dispute over the Ukrainian tax authorities' refusal to grant over UAH 5 million as an automatic VAT refund. We reached out to Viktor Kachurenko, Legal Counsel at Shell Ukraine Exploration and Production I, LLC, for more information.

CEELM: What was the argument made by the Ukrainian tax authorities in attempting to retain the VAT refund, and on what basis did the Superior Court of Ukraine reject its reasoning?

V.K.: The tax authorities claimed that some general rules of the Tax Code of Ukraine re VAT automatic refund to investor–tax payer should overrule special rules in the Tax Code legalizing the specific automatic tax refund regime for product-sharing agreements. The Supreme Administrative Court of Ukraine found that the special legal rules on VAT refund in the Tax Code are prevailingly applicable to the case and override the general rules governing the VAT refund procedure. So, the tax authorities’ cassation appeal against the winning case was rejected by the SACU and our position was supported in full.


CEELM: Is the case concluded now, or are further appeals possible? 

V.K.: The case is over at the level of the Supreme Administrative Court of Ukraine.  

CEELM: What was the most challenging part for you during the whole process of the court proceedings?

V.K: The most challenging was to prioritize in the Judge’s opinion formed around the case, the requirement by law to apply the specific VAT automatic refund provisions of the Tax Code and the related tax provisions in the PSA. Fortunately, we succeeded in advocating this idea and the court supported our key standpoint in its decision.

CEELM: Why did you retain Vasil Kisil and Partners to represent you in the case?

V.K.: We cooperate with VKP during prolonged period of time and can confirm that cooperation is fruitful.   

CEELM: How were you working with your external counsel? How did you divide the responsibilities?

V.K: We are working out our position in the court together with the external counsel who then plays the key representation & procedural role for Shell in the litigation. 

Czech Republic Knowledge Partner

For more than 25 years PRK Partners has been providing top tier, comprehensive legal services in all areas of law – always at the highest professional level. The company’s offices in Prague, Ostrava and Bratislava, as well as its specialised teams of legal practitioners and tax advisors, allow PRK Partners to offer solutions to any kind of legal issues, providing an international point of view and in-depth knowledge of the respective local legal system.

The full-service law firm has worked on many of the region’s largest and most complex transactions. The firm puts emphasis on the highest standards of quality, efficiency and flexibility in its advisory services, which are tailored to the specific requirements of each client. 

Our team is composed of professionals with international education and experience. The firm frequently works on a non-exclusive basis with leading international law firms on large cross-border transactions.

PRK Partners is consistently recognised among the top law firms by leading international and domestic directories and ratings agencies and has been honoured with numerous awards: 

• National Law Firm of the Year 2016 by the Chambers Europe Awards, the most prestigious international law firm competition. This is the fifth award PRK Partners has received since the awards were first given; National Law Firm of the Year 2014, 2013 and 2010 and Law Firm of the Year 2012 for Best Client Service.

• 2018 Best Law Firm of the Year in the category of Banking &Finance and the absolute winner in the main category of the Domestic Law Firm of the Year awards organised by epravo.cz under the auspices of the Czech Bar Association three times since the award's inception (in 2016, 2013 and 2011).

• a finalist of the Central European Law Firm of the Year category in The Lawyer European Awards 2018. 

The firm has a strong commitment to corporate social responsibility and pro bono work.

PRK Partners is the exclusive member firm in the Czech Republic for Lex Mundi, the world’s leading network of independent law firms, with in-depth experience in 100+ countries worldwide. In addition, the firm is a member of Celia Alliance, AFI (Association for Foreign Investment) and CVCA (the Czech Private Equity and Venture Capital Association).

Firm's website: www.prkpartners.com

Our Latest Issue