OnlyFans, the tax authority and an appeal victory: how WINNER dismantled the STS position and won the case on appeal

When the tax authorities receive information about foreign income from abroad, the standard scenario looks like this: an information request, a superficial audit, an inspection report and tax notices running into hundreds of thousands or even millions of hryvnias. In many cases, the STS builds its logic not on real evidence but on assumptions and “aggregated” data. Cases like this become a testing ground for WINNER’s tax litigation team.

In this case, the tax authority decided that our client had allegedly received income from the UK company Fenix International Ltd for content on OnlyFans and was obliged to declare that income in Ukraine. What followed was classic: an unscheduled desk audit, an inspection report with “conclusions” and four tax notices. Our task was not just to “complain” about the STS but to systematically dismantle the entire construction of its position.

Key moves by the WINNER team

1. Demonstrating that the tax authority had no primary evidence
   Our first step was not emotional argument, but cold technique: analysing the inspection report to identify its evidentiary sources. WINNER’s lawyers showed the court that the STS position rested solely on one letter received via international information exchange and on internal databases, without any real primary documents (bank records, contracts, payment documents).

We emphasised that:

• the report does not refer to documents recording any actual business transactions;
• neither the movement of funds, nor real accounts, nor documents describing the nature of the payments were examined;
• the formal requirements for drafting an inspection report were violated — there is no real evidence, only a retelling of the information from the letter.

In effect, we showed the court that the STS had nothing more than a “printout of correspondence”, not an evidentiary base capable of supporting tax assessments.

2. Re‑framing the STS letter as mere information, not evidence
   The second move was to strip the STS letter of its “aura of proof”. The tax authority tried to present it as sufficient grounds to conclude that the client had undeclared income. WINNER’s team drew a clear line:

• a letter between tax authorities is an informational message, not a primary document;
• it does not record a business transaction and is not a taxpayer’s accounting or tax document;
• its purpose is to trigger follow‑up work, not to replace the entire audit.

As a result, the court stopped treating the letter as “iron‑clad evidence” and began to demand real corroboration from the tax authority.

3. Showing that the tax authority failed to “work the information through”
   We then turned the very logic of international information exchange against the STS. The letter explicitly stated that the information was being sent for follow‑up and, if violations were confirmed, for further action. This means the STS had to build its own evidentiary base rather than simply copy the figures from the foreign message.

WINNER pointed out to the court that:

• the tax authority took no real steps to establish the fact of income receipt;
• it did not obtain or analyse documents from banks, payment services or counterparties;
• instead of “working the information through”, the authority mechanically copied data from the letter and converted it into hryvnias.

This reinforced the key message: the tax authority failed in its duty to prove both the fact and the amount of the income.

4. Unpacking procedural violations in the audit and the report
   Another important block was procedure. When there is little substance in the STS position, it is crucial to show that even the form is flawed. We carefully analysed:

• the grounds for the unscheduled audit;
• the statutory requirements for a desk (non‑field) audit;
• the rules for drafting an inspection report with mandatory references to primary documents.

As a result, the court received a coherent picture: a specific list of violated norms clearly linked to how each one affected the taxpayer’s rights.

5. Bringing the focus back to the core question: was there any taxable income at all?
   WINNER’s final strategic move was to focus on the essence: without a proven fact and amount of income, there is no obligation to file a declaration and no basis for tax notices. We did not allow the STS to shift the discussion:

• instead of asking “was there income?”, the authority tried to discuss “why was no declaration filed?”;
• we brought the debate back to the basic principle: first you prove the income, only then can you demand a declaration and tax payment.

Re‑framing the dispute this way allowed the court to see the weakness of the tax authority’s entire construction.

Result: a complete victory on appeal and reversal of the first‑instance judgment

After reviewing our appeal, the Sixth Administrative Court of Appeal:

• quashed the first‑instance court decision;
• adopted a new judgment fully upholding the claim;
• declared the STS tax notices unlawful and cancelled them;
• ordered the state budget to reimburse the court fee at the expense of the tax authority.

Why this matters for other taxpayers with foreign income

For everyone receiving money from abroad — freelancers, content creators, IT specialists and entrepreneurs — this case shows that:

• international information exchange is not a guilty verdict;
• a letter from a foreign tax authority is not a substitute for evidence;
• an inspection report without primary documents is a weak point that can be challenged.

The key takeaway is that in disputes over foreign income, the winner is not the party that “explains everything”, but the one with the stronger procedural and evidentiary position.

How WINNER approaches such cases

In tax cases involving foreign income, WINNER follows a clear algorithm:

• auditing all materials — requests, inspection reports, tax notices, correspondence and any available banking or payment records;
• identifying weak points in the STS position, from lack of evidence to procedural breaches;
• building a strategy: what to show the court first, where to break the authority’s logic, and which legal norms to emphasise;
• supporting the client at every stage, from responding to the first STS request to appeal and, if needed, cassation.

A team of 20 lawyers and attorneys specialising in tax and administrative disputes works on such cases, enabling us not only to “fight off” tax notices but also to systematically shape court practice in favour of taxpayers.

If you receive foreign income or already face a request, inspection report or tax notices regarding funds from abroad, do not wait for the situation to “sort itself out”. It is crucial to identify weaknesses in the tax authority’s position in time and use them correctly.

WINNER Law Firm will help you:

• assess your situation on the merits;
• build the right communication strategy with the STS;
• challenge unlawful tax notices and protect your interests in court.

For prompt contact:

• website: uk-winner.com
• phone: +38 096‑574‑81‑02

Maksym Bahniuk, Head of Tax and Customs Practice, and Yevhenii Murchenko, Head of Criminal Law and Procedure Practice at WINNER Law Firm.