International Tax Procedures: Recent Supreme Court Practice

International taxation is one of the most dynamic areas of tax law, directly affecting both business operations and a country’s investment climate. Recent rulings of the Supreme Court of Ukraine demonstrate a clear course towards formalization of procedures while prioritizing the economic substance of transactions over their legal form.

Foreign Representative Offices: Taxpayer Status

In its ruling of 20 March 2025 in case №280/4264/21 (UDR №126136681), the Supreme Court confirmed: if a foreign company is in fact conducting business activity in Ukraine, its representative office qualifies as a permanent establishment and is subject to taxation on general grounds. Tax benefits reserved for non-residents cannot be applied. This decision is critical for businesses operating through “liaison offices” or other representative structures, as the risk of reclassification is substantial.

Transfer Pricing: Substance Over Form

In the ruling of 8 May 2025 in case №420/22108/21 (UDR №127444090), the Court upheld the taxpayer’s right to apply internal comparable transactions, provided they fully meet the criteria of the Tax Code.

Another important precedent was set on 11 September 2025 in case №120/8569/24 (UDR №130178653), where the Court held that in the case of forward contracts, comparability should be assessed as of the contract date, not the delivery date. This aligns Ukrainian practice with international BEPS standards and OECD approaches.

Beneficial Ownership of Income: Proof Required

The issue of the actual beneficial owner of income remains pivotal in international taxation.

• The ruling of 18 March 2025 in case №500/1744/24 (UDR №125933033) confirmed that treaty benefits may only apply when beneficial ownership is substantiated.
• Similar positions were upheld in rulings of 11 September 2025 in case №420/11672/24 (UDR №130178463) and 20 August 2025 in case №160/28164/24 (UDR №129676570).
• In the ruling of 24 June 2025 in case №120/10439/24 (UDR №128369916), the Court provided detailed analysis of the evidentiary requirements for establishing beneficial ownership.

Thus, non-residents must demonstrate not only formal residency but also genuine business activity.

International Accounting Standards

In its ruling of 9 September 2025 in case №400/6262/24 (UDR №130083068), the Supreme Court stressed the importance of aligning national approaches with International Financial Reporting Standards (IFRS). This concerns, in particular, the classification of fixed assets and the tax treatment of expenses.

The trend clearly shows Ukraine’s move towards harmonization with global practices, enhancing investment attractiveness.

Key Takeaways

• The status of foreign representative offices is determined by actual business activity, not merely formal registration.
• In transfer pricing, economic substance prevails over contractual form.
• Beneficial ownership must be proven with robust documentation, otherwise treaty benefits cannot apply.
• Harmonization with international financial reporting and tax standards is becoming a strategic direction of court practice.

Thus, international tax procedures in Ukraine are gradually acquiring clear and predictable procedural frameworks — posing challenges for businesses, but also providing stability guarantees for the state.