On May 19, GOLAW law firm and the KyivPost held the online seminar “Corporate Restructuring in Ukraine: Consolidations & Liquidation”. Speakers of the event – GOLAW lawyers Max Lebedev, Iryna Kalnytska and Taras Lytovchenko.
“During the global recession one of the ways to minimise disruption to your company is to review its corporate structure”, explained Max Lebedev, Partner at GOLAW, Head of the Corporate Law and M&A practice. Corporate restructuring allows to deal with inefficiencies of the business as well as it opens new opportunities in the market.
Max pointed out that accession of the companies can help struggling businesses make debts and liabilities more manageable. The speaker also emphasized that the process of reorganization is rather complex, but the outcomes can be very impressive according to his own practice.
Iryna Kalnytska, Partner at GOLAW, Head of the Tax practice, talked about the taxation matters during the corporate restructuring. According to Iryna, tax consequences of the accession definitely encourage businesses to implement it: no tax obligation on income tax, as well as no VAT shall be applicable for the transaction. Iryna pointed out that even after the long lasting debates with the tax office, the courts finally confirm that losses from previous periods (income tax negative value) of the accessing company may be transferred to the successor. This makes accession for the business – where one company is loss making and the other profitable – very attractive.
The company shall settle all disputes with the tax office and complete the process of receiving VAT budget refund before commencement of the corporate restructuring
commented Iryna.
She also said that the key aspect in liquidation process is liquidation tax audit. The speaker strongly recommended to prepare properly for this and conduct the internal preparatory tax audit. “This will allow the company to reveal all mistakes and possible violations before tax authorities will do it, and, obviously, to correct them on time” said Iryna.
