1. **Subject of the dispute:** Challenging tax notices-decisions regarding the additional accrual of repatriation tax, VAT, and penalties, as well as the issue of allocating legal costs for professional legal assistance.
2. **Court’s arguments:**
– The court determined that the activities of a foreign company (non-resident) in Ukraine do not constitute a “permanent establishment,” as the representative acted solely within the scope of exercising the corporate rights of a participant rather than engaging in commercial activity.
– The decision of the general meeting regarding the payment of dividends was recognized as an internal corporate management act, not a legal transaction, which excludes the grounds for the additional accrual of repatriation tax.
– The court confirmed the reality of the plaintiff’s business operations, noting that the submitted primary documents (consignment notes, write-off acts, trial balance sheets) are sufficient to confirm the use of seeds and spare parts in production.
– Regarding quality certificates, the court emphasized that they are not primary accounting documents and their absence cannot be grounds for invalidating a business operation.
– The court also pointed out that company orders regarding accounting policies are internal documents, and the absence of defect reports does not refute the fact that repair works were performed if they are confirmed by other documents.
– Regarding legal costs, the court supported the position of the appellate instance on the necessity of applying criteria of proportionality and reasonableness when awarding attorney’s fees, rejecting the requests of both parties to change the amount of compensation.
3. **Court’s decision:** The Supreme Court left the decisions of the lower courts unchanged, and the cassation appeals of both parties were dismissed.
**Note:** In this decision, the Supreme Court refers to its own position set forth in the ruling of March 5, 2026, in case No. 320/49198/24, regarding the interpretation of the characteristics of a permanent establishment and the nature of a non-resident’s activity, which is key to understanding the court’s approach to similar disputes.
