Individual Tax Consultation in Ukraine Before a Tax Audit: A Guide for Foreign Businesses

Consider an international group changing the agreement between its foreign parent company and Ukrainian subsidiary. The commercial terms are settled: which company provides services, how the fees are calculated and when payment is due. However, the Ukrainian finance team still needs to determine how the arrangement should be treated for tax purposes.

An individual tax consultation in Ukraine allows the relevant taxpayer to ask the State Tax Service of Ukraine (STS) how the law applies to its specific circumstances. The procedure is available to companies as well as individuals. 

For an international group, preparing the request starts with identifying whose Ukrainian tax obligations need clarification. The next steps are to describe the transaction accurately, arrange submission by the proper signatory and assess what the resulting consultation actually covers. An answer addressed to the wrong group company, or based on an incomplete description, may not serve the intended purpose.

Individual Tax Consultations and Their Purpose

An individual tax consultation is an official explanation of how particular tax provisions, or other rules administered by the tax authority, apply to a specific taxpayer’s circumstances. In Ukrainian, it is commonly abbreviated as IPK. The word “individual” refers to the taxpayer-specific nature of the explanation; it does not restrict the procedure to private individuals. 

The procedure is also sometimes described in English as obtaining an individual tax ruling in Ukraine. The STS uses “individual tax consultation”, which is the term used throughout this article.

An accountant’s recommendation or a lawyer’s opinion provides professional analysis. An ordinary explanation on the STS website or a standard answer from its contact centre provides general information. These should not be confused with an IPK issued to your company following a request about its own transaction. The STS expressly distinguishes its contact centre’s standard answers from consultations addressing particular circumstances.

Ukrainian law allows oral, paper and electronic consultations. For the purposes discussed here, the relevant document is a paper or electronic IPK registered in the Unified Register of Individual Tax Consultations. It should identify the questions and facts, explain the legal reasoning and provide a conclusion on the practical application of the rules.

The result is an official tax interpretation. It is not a promise that the authority will endorse the company’s preferred treatment or approve every aspect of its business model.

Choosing the Applicant Within an International Business Structure

Identify the taxpayer responsible for the obligation that needs clarification. Group ownership, centralised decision-making and payment for legal services do not determine who should receive the consultation.

For a Ukrainian subsidiary, the request should address that company’s own transactions and obligations. If a Ukrainian limited liability company receives services from a foreign group company and needs clarification of its Ukrainian tax responsibilities, the foreign shareholder should not replace the subsidiary as the applicant. The parent company’s finance team may coordinate the work, but the consultation needs to be addressed to the taxpayer that will rely on it. This follows from the rule that an IPK may be used exclusively by its recipient.

For a non-resident operating through a permanent establishment, the corporate income tax position requires a different approach. The relevant corporate income taxpayer is the non-resident company carrying on business through that establishment. The request should therefore reflect the non-resident’s Ukrainian tax registration and the circumstances of its Ukrainian operations. Do not automatically apply this conclusion to VAT or other taxes: the relevant registration and obligation must be checked separately.

The practical consequence is that an IPK is not group-wide protection. Two subsidiaries using similar agreements cannot assume that a consultation issued to one of them gives the other the same individual protection. Another taxpayer’s consultation may help explain the authority’s approach, but each entity’s ability to rely on it must be distinguished from its informational value.

Cross-Border Transactions That May Require a Consultation

An IPK is worth considering where a defined transaction raises a genuine question about the application of Ukrainian tax rules. For international businesses, three situations are particularly relevant.

• Payments to non-residents under commercial agreements. The uncertainty may concern the treatment of a particular payment or the Ukrainian payer’s obligations. A useful request identifies the payment, its contractual basis and the parties’ roles, then asks about the specific tax consequence requiring clarification.
• VAT in cross-border transactions. A business may need an official interpretation of a particular arrangement for supplying or receiving services. Asking how VAT works in Ukraine is too broad. The request should describe what is supplied, by whom, to whom and under which contractual conditions.
• Applying a tax treaty or changing the contractual model. The question may concern how treaty provisions apply to the described payment, or whether a revised arrangement changes the analysis. The request should identify the factual or legal point creating uncertainty rather than seek general confirmation that the group’s structure is tax-efficient.

A preliminary legal review should establish whether an IPK would add value. Where the rule and its application are already clear, a formal request may be unnecessary.

Related reading: For a broader look at financial modelling and tax planning when restructuring or developing your Ukrainian business, see Financial and tax planning for foreign business in Ukraine.

Preparing a Request That Addresses the Actual Transaction

Applicant Details and Required Information

Article 52.1 of the Ukrainian Tax Code sets out the information required in a tax consultation request. For a Ukrainian company, the request must include:

• Its legal name, tax address and telephone number and email address, where available.

• Its identification details, including the EDRPOU code, the Ukrainian company identification code.

• An explanation of the practical need for the consultation, supported by the actual circumstances.

• The date and the appropriate handwritten or legally compliant electronic signature.

For a non-resident applicant, verify the relevant Ukrainian tax registration particulars and taxpayer number. These should not be confused with the EDRPOU code of a separate Ukrainian subsidiary. The STS registers non-residents using a tax number assigned under the Ukrainian tax registration rules.

Missing required information can prevent the authority from issuing an IPK. Instead, the applicant may receive a response under the general procedure for handling citizens’ appeals, which is not the requested individual consultation.

Formal completeness and a useful factual description are separate requirements. A request can contain the correct company details yet still ask a question too broad to produce an answer that the finance team can apply.

Transaction Facts and Supporting Materials

The factual description should allow the authority to understand the transaction without reconstructing it from scattered references. Explain the parties and their tax residence, the subject and material terms of the agreement, the payment arrangements and the movement of goods or services. Identify related-party relationships and any other circumstances relevant to the question.

State whether the arrangement is planned or already operating. Then explain precisely what the company cannot determine: the treatment of a payment, a VAT obligation, the application of a treaty provision or another defined issue. These are practical drafting considerations, rather than a universal statutory checklist of attachments.

Illustration: a Ukrainian subsidiary receiving services from a foreign group company.

A request stating, “Please explain the taxation of services received from a non-resident,” gives the authority little information about the actual arrangement.

A more focused request could be built around the following hypothetical facts:

Our Ukrainian company, registered for VAT, plans to receive monthly market-research reports from a related company that is tax-resident in Poland. Under the proposed agreement, the provider’s staff perform the work in Poland, deliver the reports electronically to our Ukrainian company and receive a fixed monthly fee. Given the service scope and contractual terms described in this request, what Ukrainian VAT obligations arise for our company when receiving these services?

This example demonstrates how to define the question; it does not determine the transaction’s tax treatment. An actual request would need a sufficiently detailed service description, the relevant contractual provisions and a clear explanation of the uncertainty being submitted for clarification.

To prepare that request, the lawyer may need the agreement, its schedules, service descriptions, invoices or other records showing how the arrangement operates. Documents needed for legal analysis are not automatically mandatory attachments to every IPK request. The lawyer should determine which materials clarify the facts and which should accompany the submission.

For a broader review of the parties to a transaction: Beneficial Owner Check in Ukraine: Sanctions and Deal Risks explains how to examine who owns or controls a Ukrainian counterparty and assess the associated risks before signing or making a payment.

Filing the Request and Arranging the Process from Abroad

A request can be submitted on paper or electronically. Paper requests may be sent by post or courier. For electronic submission, the STS provides a dedicated function in the private section of the Electronic Cabinet, its online taxpayer portal.

The main electronic route is the “Individual Tax Consultations” menu. The process involves four steps:

1. Select the appropriate tax authority. Check the applicant’s details and complete the correspondence address and contact fields.

2. Enter the substantive request. Describe the practical need, actual circumstances and questions requiring an answer.

3. Save, sign and send. Submission must be completed using the appropriate electronic signature by a person authorised to act for the taxpayer.

4. Monitor incoming documents. The “Incoming” section of “Incoming/Outgoing Documents” contains information about receipt and registration of the request, as well as the electronic response. 

Under the general procedure, the authority has 25 calendar days following the day it receives the request to provide the consultation. The period may be extended by no more than 15 calendar days, with notice to the taxpayer before the original period expires. The STS provides the consultation free of charge; legal analysis, drafting and submission support are separate professional services.

A special procedure applies while a taxpayer is included in the official list of taxpayers with a high level of voluntary tax compliance: the central STS provides the consultation within 15 calendar days following receipt, without an extension. This is a status-specific procedure, not the standard deadline for every foreign-owned business.

The preparation can be coordinated from abroad. The group’s finance team can provide documents, clarify the commercial arrangement and approve the factual description remotely. For filing, however, the person acting for the applicant must have the necessary authority. Ukrainian tax rules recognise representation based on law or a power of attorney.

Our lawyers can prepare the request and guide the authorised signatory through submission during a Zoom call, explaining which menu to use and how to send the document. That assistance does not itself authorise an adviser to sign for the taxpayer: drafting, technical guidance and legal authority to submit must remain distinct.

Using the Consultation Before a Tax Audit: Protection and Limits

An individual tax consultation before a tax audit can provide protection against specified financial consequences of following the tax authority’s guidance.

Under subparagraph 112.8.2 of the Tax Code, acting in accordance with an IPK issued to the taxpayer in paper or electronic form and registered in the Unified Register can provide exemption from financial liability. Subparagraph 129.9.2 addresses the non-accrual or cancellation of late-payment interest in the circumstances it covers. These protections do not remove the obligation to pay the underlying tax. 

For practical reliance on the consultation, check three points together:

• The recipient: the IPK was issued to the taxpayer seeking to rely on it.

• The facts: the actual transaction corresponds to the circumstances described in the request.

• The conduct: the company’s actions follow the consultation’s conclusions.

For example, an answer about one contractual arrangement should not be treated as covering a revised model without checking the differences. A change in the service scope, payment recipient or another material circumstance may require a fresh assessment of whether the consultation still applies.

Timing also matters. The STS states that an IPK applies to its recipient from the date it is issued until it is amended or cancelled. Obtaining one shortly before an audit therefore does not automatically protect all earlier transactions. The company must consider when the relevant actions occurred and whether they were taken in accordance with an applicable consultation.

This makes the consultation most useful as part of a decision about how to handle an identified transaction, rather than as a last-minute attempt to protect an entire historical tax position.

Keep the request, registered consultation and transaction documents together. The finance team should be able to connect the answer to the agreement and operations actually recorded in the accounts. Reassess reliance after material changes to the facts or relevant legislation. An IPK does not replace the underlying documents needed to substantiate the transaction.

Read also: Deciding who will maintain your Ukrainian company’s records and handle reporting? Outsourced Accounting Services in Ukraine discusses this choice through the example of a foreign business establishing its Ukrainian operations.

Dealing with an Unclear or Unfavourable Response

Read the response against the questions submitted. A paper or electronic IPK should contain its registration number, a description of the issues and circumstances, the reasoning for applying the legislation and a practical conclusion. A lengthy quotation from the Tax Code does not, by itself, answer the company’s question.

The next step depends on the problem identified.

• The original request lacked sufficient facts. Review what the authority was actually told. If a material part of the agreement or payment arrangement was omitted, a further request may need to clarify those circumstances and ask a more precisely defined question. Repeating the same wording is not a reliable way to obtain a different answer.
• The request was specific, but the response lacks a practical conclusion. Compare the answer with the issues raised and identify what remains unanswered. The review should distinguish an incomplete explanation from an interpretation that is clear but commercially inconvenient. This determines whether to clarify the request or consider another legal response.
• The interpretation appears inconsistent with the law. Article 53 of the Tax Code allows the recipient to challenge its paper or electronic IPK in court where it considers the consultation contrary to the relevant tax rules. If the court cancels the consultation, this provides grounds for a new consultation taking the court’s conclusions into account.

An unfavourable answer therefore calls for a legal assessment of its reasoning and consequences. Neither an amended request nor litigation should be presented as a guaranteed route to the tax treatment the business originally preferred.

Legal Support from Legal Service Ukraine

Before preparing an individual tax consultation in Ukraine, we assess the transaction and identify the question that needs an official answer. This includes determining the appropriate applicant, reviewing the proposed or existing contractual model and deciding whether an IPK would add value to the company’s tax position.

Our tax planning services in Ukraine provide the broader framework for reviewing the business structure, identifying tax risks and determining what needs to be addressed before the company commits to a particular approach.

Where an IPK is appropriate, the work includes preparing the factual and legal parts of the request, formulating targeted questions, supporting submission and analysing the response. The final review focuses on what the answer means for the actual operation and where its application has limits.

Once the tax approach has been assessed, it must be reflected consistently in the company’s records and reporting. Our accounting and payroll services in Ukraine can support the subsequent bookkeeping and tax reporting work, connecting the legal analysis with the company’s ongoing accounting processes.

Contact Legal Service Ukraine to assess the tax treatment of your Ukrainian operations, determine whether an individual tax consultation is appropriate, and prepare a request based on your business’s actual circumstances.