The tax dispute involved tax qualification of payments under sub-license agreements and timeliness of withholding tax remittances. The tax authorities took the position that  payments made by De Novo LLC under the sub-licensing agreements were for purchasing intangible assets and thus should be capitalized while De Novo LLC treated such payments as royalties.  Also, the tax authorities claimed that De Novo LLC had failed to remit withholding taxes to the budget on a timely basis while De Novo LLC was rejecting all such allegations of the tax authorities.

The court of first instance ruled in favor of the tax authorities and management of De Novo LLC decided to engage Jurimex to support the company at the appeal stage.

Coordinated efforts of the client’s financial and legal teams and of Jurimex’s lawyers along with additional tax and legal arguments put forward by Jurimex resulted in upholding the position of De Novo LLC by the Kyiv Court of Appeal.  The latter cancelled the judgement of the first instance court in respect of all tax matters appealed by De Novo LLC.

The judgement of the Kyiv Court of Appeal is important not only for De Novo LLC but also for the Ukrainian cloud services industry and entire IT community.

Jurimex congratulates Oleg Chayka, the head of the international taxation practice, Kostyantyn Chartoryiskyi, senior lawyer and Natalia Boyko, attorney at law, on the successful completion of the project.