The EUCON team continues to share its experience through training seminars. So, the auditor, partner, head of the transfer pricing practice of the EUCON Legal Group Larysa Vrublevskaya spoke to the audience of the seminar of the Association of Tax Payers of Ukraine, which took place on May 26 in the online format.
So, the speaker presented two topics at once, one of the topics was devoted to legislative innovations in the field of transfer pricing, the second – to the practice of verifying controlled operations and documentation on TP.
The speech of Larisa Vrublevskaya touched on the latest changes that were made to the Tax Code of Ukraine, namely the introduction of the rules of controlled foreign companies (CFC). In particular, the speaker named the conditions under which any legal or non-legal entity is non-resident, will be considered a CFC; provided recommendations on the procedure for calculating the adjusted profits of the CFC, which is taxed in Ukraine. So, the expert noted that the adjusted profit of each CFC of the reporting year is negative if the adjusted profit of the CFC of the reporting year does not detract from the profit before tax of other CFCs of the reporting year, but can be taken into account in reducing the profit before tax of the same CFC in future reporting years. The speaker also called the conditions under which adjusted profits are not taxed.
The second part of the report was devoted to the practice of audits of controlled operations, documentation, the quality of justification of compliance with the “outstretched hand” principle of the conditions of controlled operations.
Thus, the auditor indicated three types of control in the field of transfer pricing, namely: monitoring controlled operations, a survey on TP, conducting audits on compliance by the taxpayer with the “outstretched arm” principle.
The expert drew attention to the ways of monitoring the TP, noted the grounds for verifying compliance with the “outstretched arms” principle, and also spoke in detail about the stages of preparing documentation for the TP.
The speaker substantiated the need for segmentation of financial reporting indicators, demonstrating the actual process of segmentation using real cases as an example, and emphasized the importance of observing the principle of grouping operations. Ms. Vrublevskaya also demonstrated to the seminar participants the strategies for finding comparable people and the procedure for selecting comparable people.
