Dialogue on Tax Risks and Audits in 2025 – Business Meeting with PwC Experts in Ukraine

On 2 October, the PwC Ukraine team hosted a business meeting focused on pressing issues surrounding tax risks and audits. In the face of unprecedented challenges, rapid adaptation and effective business protection are critically important.

Key Topics Covered by PwC Experts: 

• Judicial practice regarding procedural aspects of audits. 

• Issues arising during VAT and Corporate Income Tax audits. 

• Specifics of audits related to non-resident income tax and international tax treaties. 

• Document management and SAF-T preparation during wartime.

Below, we offer several key takeaways from our experts:

Zhanna Brazhnyk, Director and Head of PwC’s Dispute Resolution Practice, noted:

• In 2025, tax authorities are prioritising unscheduled audits. As of September, these audits were conducted five times more frequently than scheduled ones, and tax assessments from unscheduled audits exceeded those from scheduled audits tenfold.

• Pre-trial appeals offer around a 30% chance of success but often result in repeated audits. Notably, 50% of tax disputes are resolved in favour of the tax authorities.

• Repeated audits initiated during or after pre-trial appeals may be cancelled if they lack clear objectives or merely duplicate previous findings.

• Significant procedural violations are independent grounds for cancelling audit results. The concept of “significance” is gradually being shaped by Supreme Court practice.

Yana Bazia, Senior Manager, Attorney, Dispute Resolution Practice, PwC, emphasised:

• In the event of document loss, it is essential to first restore those critical to the tax base.
• Judicial practice regarding the moratorium on audits remains inconsistent, making proactive collection of robust evidence essential.
• A clear algorithm and documentation of each step can protect a company’s interests in the long term.
• Electronic document management is a strategic necessity during wartime, ensuring business continuity and safeguarding against document loss.

Inna Andrushchenko, Director and Head of PwC’s VAT Practice, highlighted:

• During audits, tax authorities scrutinise the reality of transactions, their link to business activities, and issues such as discounting long-term liabilities, usual price, and accelerated depreciation.

• To mitigate tax risks, taxpayers must ensure proper documentation of transactions, including not only primary documents but also supplementary materials such as reports and photo.

Yuliya Shyshko, Senior Manager, Tax Practice, stated:

• Given the risk of paper document destruction, transitioning to electronic document management can prevent the loss of critical records.

• In 2025, tax authorities have already begun requesting and using SAF-T during various types of document audits.

• Preparing for the implementation of SAF-T as a data exchange format requires significant time and resources. As tax authorities enhance their readiness, taxpayers should not delay.

Anna Nevmerzhytska, Director and Head of the International Tax Planning and Financial Institutions Tax Consulting Practice, and Anzhelika Dryga, Senior Manager in the same practice, shared:

• Ukrainian tax authorities actively exchange information with foreign competent bodies, and this communication serves as a strong basis for challenging application of treaty benefits.

• Sufficient economic substance of a non-resident is a key factor in defending the right to claim tax benefits under international treaties — both for securing decreased withholding tax rates and for confirming the place of management.

• It is recommended to prepare a defence file and substantiate the right to apply tax benefits at the time of payment, ensuring this information is available for the future audits or upon request from the authorities.

PwC Ukraine extends sincere thanks to all participants and speakers. Stay connected and follow us on LinkedIn, Facebook, Telegram to stay informed about upcoming events!