Illya Sverdlov (Ukraine) on the enemy at the gates

<p><strong>Illya Sverdlov </strong></p><p>Illya was a tax partner at DLA Ukraine. He still would be there, but DLA a year ago announced it leaves Ukraine. So, Illya with all the tax team moved to Kinstellar law firm, which is a Tier 1 firm in tax in Ukraine by Legal 500 directory. </p><p><strong>Politics </strong></p><p>While the media mostly talks of the potential war in Ukraine, Illya feels quite confident that everything politically is more or less stable, considering the circumstances. People are not panicking and feel more prepared than during the previous conflict with Russia in 2014. Then Ukraine had a mobilisation of all men, whereas now it has not happened so far. Nevertheless everybody checks in to the military units and even takes some shooting practice. </p><p><strong>Business</strong></p><p>There is no downturn, quite on the opposite. The investments have not stopped, nor are exiting. The corruption situation is also getting better since 2014 reform. The scale of the grey economy has been reduced as well lately. I could feel that the politics and business in general were not comfortable topics for Illya right now as there is so much uncertainty. But the tempo of the discussion changed once we switched to tax.</p><p><strong>Tax</strong></p><p>Ukraine as of 2022 has introduced CFC rules. The place of effective management and the beneficial ownership rules may require foreign companies with management in Ukraine to restructure. Foreign holding companies through the foreign tax authorities now receive long lists of very detailed questions from the Ukrainian authorities in order to determine, if the cross-border taxation was correctly applied. The Ukrainian authorities are getting smarter. The corporate structure should be as simple as you can explain to a child. Either one should create substance in the foreign company or close it.</p><p><strong>One of the best tax systems for IT companies</strong></p><p>“One of the world’s best tax systems is now available for small startups as well as big IT companies