Successful representation of a client in a dispute concerning recovery of losses arising from the improper provision of accounting services

Case Summary

REVERA law group successfully represented a marketing agency in a dispute with an accounting company concerning the recovery of losses arising from the improper provision of accounting services.

The client sought recovery of penalties charged by the tax authority, expenses incurred in restoring accounting records, and legal costs.

Background

1. In November 2020, the parties entered into an agreement for the provision of accounting services. The contractor undertook to maintain the client’s accounting and tax records, as well as to prepare and file tax returns.
2. During the provision of the services, the contractor prepared and submitted VAT and corporate income tax returns.
3. In 2025, the tax authority identified errors in the tax returns for 2023–2024. As a result, additional tax amounts were assessed against the client, and penalties were charged for late payment of taxes.
4. After the violations were identified, the client terminated the agreement with the accounting company and requested the transfer of accounting documents and accounting data. The contractor failed to provide the relevant documents and the accounting database.
5. As a result, the client was forced to engage another audit company to restore its accounting records for the period from 2020 to 2023.

Outcome

• The Economic Court upheld the client’s claims in full.
• The accounting company was ordered to compensate the losses in the form of penalties charged by the tax authority and expenses incurred in restoring the accounting records. Legal costs were also recovered in full in favour of the client.

Strategy and expertise of REVERA law group

The REVERA team built its legal position on the classic framework of civil liability and presented evidence of:

• the existence of losses;
• improper performance of obligations by the accounting company;
• a direct causal link between the errors in the reporting and the additional assessments;
• the contractor’s fault as a professional market participant.

Particular attention was paid to the evidentiary record, including materials from the tax authority, which confirmed errors in the calculations and completion of the tax returns.

Practical takeaways from REVERA law group

1. An accounting company is responsible for the quality of its services and must compensate the client’s losses if errors in tax accounting have caused financial damage.
2. The court confirmed that penalties charged by tax authorities as a result of the contractor’s errors may be recovered from the contractor. If the contractor fails to transfer documents or loses accounting data, the costs of restoring them may also be recovered as actual loss.
3. Proving a causal link between the contractor’s actions and the client’s losses is of key importance. Supporting documents from the tax inspectorate may assist in this regard.

The court also takes into account the terms of the accounting services agreement: the scope of the contractor’s obligations and the allocation of liability between the parties. An express provision in the agreement requiring compensation for fines and penalties charged due to errors in tax accounting significantly strengthens the client’s position.

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