Court schedules examination of Philip Morris Ukraine's tobacco processing documents in Ukraine in UAH 635 mln lawsuit

Kharkiv's administrative court of appeals has scheduled an examination of documents of Philip Morris Ukraine, one of the largest tobacco companies in the country, related to processing of tobacco in the UAH 635 million tax liabilities lawsuit.

"We are glad that the court satisfied a petition to carry out examination [of the company's documents]," the company's press service reported.

Kharkiv Bokarius Institute of Forensic Examinations acted as an expert.

"We believe that it is illogical that the examination will be conducted at the place where the defender is located. We will ask to involve international specialists to the examination," the company said.

In May 2016, Philip Morris Ukraine challenged a tax bill for UAH 635.3 million sent after tax inquiries on the site by the State Fiscal Service of Ukraine in court. The lawsuit was launched after a tax dispute between the company and the authority, which accuses the company of violating the law when importing tobacco and exporting cigarettes and the unlawful use of the Marlboro brand.

In 2015-2016, the company imported tobacco to Ukraine, placed it to the customs processing regime and exported the finished products outside the country under sale and purchase agreements. The total cost of the finished products was $97 million.

The company said that the Customs Code of Ukraine permits placing goods to the customs processing regime using sale and purchase agreements.

The approach of the tax and customs audit department of the State Fiscal Service is based on the fact that the sale and purchase agreements cannot be a ground for placing goods to the customs processing regime. The company's transactions are to suit the provision of the law on transactions with commodities on a tolling basis in foreign economic relations that became invalid in 2012.