On February 12 there was held the regular webinar of the Association of Taxpayers of Ukraine. Traditionally Larysa Vrublevska, Auditor, EUCON Partner and Head of Transfer Pricing Practice was the speaker at the event. She told the audience about the current issues and key changes in Transfer Pricing.
Firstly, the lecturer considered the issue of control in the field of Transfer Pricing, noting that it is implemented through monitoring of controlled transactions, surveys on Transfer Pricing and conducting inspections if the taxpayer adhere to the principle of “arm’s length”.
Secondly, particular attention was paid to the aspects of unscheduled documentary inspections, in particular regarding the detection of violations (failure to submit the Report/documentation, non-inclusion of all commercial operations in the Report) and inspections if the taxpayer adhere to the “arm’s length” principle.
Thirdly, Larysa Vrublevska explained in detail to the participants all the features of the moratorium on inspections during the quarantine period, in particular in terms of validity, accrual of fines and, given the latest news, on the recent lifting by the Cabinet of Ministers of the moratorium on certain inspections.
Then, regarding the procedure of monitoring, the speaker outlined the purpose, sources of information, factors that are taken into account, also noting that during the monitoring there maybe carried out polls.
Additionally the lecturer considered in detail all the changes in the Transfer Pricing for 2020, namely: addition to the List No. 480 new organizational and legal forms, new criteria for recognizing persons related (threshold for recognition of persons related 25%, establishments without legal entity status), new types of controlled business transactions, additional methodology for intangible asset transactions and restructuring transactions (according to National or International Valuation Standards), rules for commodity transactions, changes in reasonable economic cause (business purpose) (cl.140.5.15 of the Tax Code of Ukraine), taxation (15%) constructive dividends from 2021 (cl.14.1.49 of the Tax Code of Ukraine) and expansion of the list of transactions for 30% adjustment (cl.140.5.5-1 Tax Code of Ukraine) etc.
The speaker also told about the amendments introduced to the Law 466-ІХ regarding the three-level Transfer Pricing documentation. Accordingly, the said documentation consists of transfer pricing (local file), global documentation (master file) and international group companies report (country-by-country reporting).
Her speech Larysa Vrublevska ended with consideration of the content of documentation on Transfer Pricing and analysis of Reporting for 2020.