Tax Practice


He was born in 1984 in Yevpatoria. In 2007, he graduated from the National Academy of the Security Service of Ukraine.

He has been specializing in tax law issues for over 10 years. He has been head of the taxation and tax disputes practice at Redcliffe Partners Law Firm since September 2017.

He consults on general aspects of tax law and structuring, practical application of current taxation rules and on issues of compliance with tax legislation. He represents the interests of international and Ukrainian companies during tax inspections and supports clients at all stages of tax disputes and their settlement both through pre-trial and legal proceedings.

Scheduled check

"Actually, even the minimal BEPS plan, which Ukraine joined, had a significant impact on the approaches to international tax structuring"

— What is tax structuring in Ukraine today?

— Currently, more pragmatic and thoughtful approach is applied. But most importantly, Ukrainian business, even if not as a whole, understands that structuring outside a safe harbor is really unsafe. It's not just about financial penalties, but also about reputational risks. For now, ad hoc approaches that made it possible to achieve point results in the short-term enable working with the use of traditional structures. But it will not last long.

Increases in trade with the EU countries determine the demand for the establishment of efficient trading structures. More and more Ukrainian businessman are thinking increasingly more about the form and content of their presence in foreign jurisdictions, not only for the purposes of corresponding to the criteria of a beneficiary-recipient of income. Moreover, recently, representatives of small and medium business have been actively considering export of their own products with added value, rather than export of raw materials. Some of them are enjoying succeed and I am very pleased about that.

The launch of privatization should give fresh impetus to investment and, I hope, to the fair distribution of profits.


— What are the most common mistakes that businesses make while a choosing and implementing a corporate structure?

— In general, business expects universality from the structure which was established for certain tasks. They do not always follow trends in the areas not directly related to taxes: in regulatory, foreign trade areas, in corporate management. The ideal structure from the perspective of tax efficiency may turn out in reality to be a house of cards if these aspects are not taken into account. Insufficient attention to  compliance procedures and know your client practice will eventually result in disastrous consequences. FCPA, the UK Bribery Act, Criminal Finances Act also should not be ignored by Ukrainian business. It is equally important to  know your legal services provider’s practice.  Let us recall how in February of last year, Cyprus with trembling followed proceedings with regard to the deputy prosecutor- general and lawyers of one of the leading Cyprus law firms.


— What requires attention, first and foremost, to minimize risks?

— We need to look at least three years ahead. No matter how trite it may sound, it is also necessary to take into account the reputation of the jurisdiction, and not only its expense, convenience or, to a certain extent, reliable confidentiality. Businessmen have to revise or improve many corporate structures built by Ukrainian business at the end of the last century since being formerly acceptable, today, they do not always pass vetting or just do not allow plans to be implemented. For example, a discretionary trust in a shareholding structure will not give an opportunity to purchase a Ukrainian bank. If you have the status of the offshore founder or shareholder, the bank will consider you only as a "client that requires more in-depth examination", not to mention that there can be many "papers" apart from the Panama and Paradise ones. That is why the principle of full disclosure is a cornerstone of risk assessment. It is necessary to assess the real possibilities of protecting investments or resolving trade disputes.

There are also less obvious issues that should not be forgotten, especially when it is a matter of time. For example, the maturity of local advisors’ communication with their colleagues from other jurisdictions, and even how quickly you can receive documents certified by a notary or court from abroad.


— What criteria and conditions should a business take into account to establish an optimal tax structure?

— Any structure should remain flexible and be able to adapt to possible changes in context and assigning the new tasks. In other words, one should understand that already at the stage of introduction of a non-resident to the transaction, it will be very easy to pull him out of there and  what expenses and tax consequences will it lead to, how quickly and with what effect is it possible to add, for example, new goods as items or payment means. One should understand and accept that compliance with the requirements of tax legislation (and not just with this) is, unfortunately, not a competitive advantage in many areas of the Ukrainian economy, if we talk about the "domestic" offshore.


— Is there any difference between structuring and tax evasion? Is there a need for legislative changes to clearly distinguish between them?

— There is no clear distinction. It is difficult to do this in terms of legislative procedure, unless we want to have a separate criminal tax code. In my opinion, different application of legislation by supervisory authorities and courts would be the ideal solution to this problem. I hope for a new composition of the Supreme Court and for a renewed judicial system in general.

For example, judicial doctrines developed in law-enforcement practice were a good attempt. For example, the doctrine of domination of substance over form, doctrine of topicality of business transactions or doctrine of business purpose gave more room for maneuver to administrative courts, allowed actual circumstances to be taken taking into account, the substance of transactions, validity of tax benefit and whether the taxpayer was prudent when choosing counterparties. But it is their application, sometimes ad hoc, that led to the controversial legal conclusions of the Supreme Court of Ukraine which, I suppose, require review or a more precise definition. Today, even the most prudent and bona fide taxpayer encounter bastions of agreements on admitting guilt in fake entrepreneurship, sometimes along the supply chain. Arguments have so far remained unanswered relating to the fact that in a particular case under consideration there is both an object of taxation and a real change in the financial standing of the parties to the transaction, and a simplified judicial investigation in the examination of agreements on admitting guilt, and fake activities have independent consequences, determined by the Commercial Code of Ukraine.


— What has changed or would change in tax structuring under the influence of BEPS?

—  Even the minimal BEPS plan, which Ukraine joined, had a significant impact on the approaches to international tax structuring. Further OECD research or, for example, a response from United Nations experts to the investigation related to the so-called Paradise Papers, will determine the vector.

As for Ukraine, the active position taken by the Ministry of Finance of Ukraine in the revision of conventions and, eventually, the introduction of a multilateral tool to change the Convention for the Avoidance of Double Taxation, the automatic exchange of tax information, the same draft law on foreign companies under control in a hung state: with the correct application all these become powerful and efficient tools of international tax control.

New challenges will result in the development and implementation of new tools, and not just in business. The world is, as the saying goes, at your fingertips. I will not be surprised when the State Fiscal Service will receive answers to international inquiries during the day on WhatsApp or will add an application to Play Market or the AppStore, and you’ll be able to receive an official tax explanation from a bot.