Interlegal lawyers consulted the Client and the Bank regarding application of thin capitalization rules

The client filed a request to Interlegal concerning bank issues. A foreign bank maintaining the Client’s corporate account demanded for explanations upon application of thin capitalization rules in Ukraine with regards to foreign loan transactions.
In order to keep its account active for transactions, the Client needed legal advice and explanations to the bank.

Having drafted such legal advice, Interlegal corporate lawyers analyzed accounting and legal aspects of this issue. Thin capitalization rules may be expressed both verbally and under the special formula. A keystone was the following: whether it is necessary to increase the Ukrainian company’s financial result due to obtaining loan from non-resident?

In a nutshell, we note that the bank’s concern of thin capitalization shows changes in approach for servicing clients. Today banks commence understanding activities of their clients, studying tax legislation specifics and asking questions.

Interlegal lawyers provided necessary explanations to the bank and assisted the Client in cooperation with bank.

Interlegal junior lawyer Viktoria Yankovskaya, associate attorney  Marta Sverdlykivska, managed by partner Irina Voyevodina, led the case.