Philip Morris Ukraine, a large tobacco company in Ukraine, has said that claims of the tax and customs audit department of the State Fiscal Service worth a total of UAH 4.1 billion are groundless.

"They have not officially imposed a fine. The inspection was finished on May 10. On May 24 the term for issuing the documents on the results of the inspection expired. Philip Morris Ukraine has not yet received any conclusions and reports," Corporate Director Natalia Bondarenko told Interfax-Ukraine.

She said that in 2015-2016 the company imported raw materials to Ukraine, passed it through the customs office (applying conventional tax exemption) and imported finished products outside Ukraine under contracts.

The total cost of the finished products made and exported in this mode was $97 million.

"The Customs Code allows placing goods to the customs processing mode under contracts. The Finance Ministry officially stated this position and the customs control department of the Fiscal Service sticks to it," the company said.

Bondarenko said that according to the position of the tax and customs audit department the sale and purchase contracts cannot be ground for placing goods to the customs processing mode.

They said that the company's transactions are to meet the provision of the law on transactions with materials on a tolling basis in foreign economic relations that became invalid in 2012.

"We think that this position of the State Fiscal Service creates large reputation threats to investment climate and other companies. Before the start of the inspection the company was drawing up a strategy. It said that Ukrainian production is considered a platform for creating a technological exports hub with the resource and scientific base," she said.

According to the plan, the company's exporting capacity was to increase to $300 million every year.

Bondarenko said that the signing of foreign economic contracts of companies operating in Ukraine, including Philip Morris Ukraine, is jeopardized.

"We hope we will be able to articulate our position to the State Fiscal Service and continue cooperation. According to the pessimistic scenario, the company would challenge the fiscal service's decision," she said.