 |
Co-authored
by
Andrii Kuleba
(Junior
Associate of
Lavrynovych & Partners Law Firm)
|
According
to the
Order of the Ministry of Revenue and Duties of Ukraine of 1 July
2014 No. 368 the generalized transfer pricing ruling was recast.
The
recast ruling gives answers to 41
questions (as compared to 25 in its initial version) and contains
clarifications with respect to the previously provided answers.
Please see below a brief
description of the recast ruling:
-
Principals of loans,
deposits and returnable
financial assistance
as well as dividends
and investments
are dropped
out for
the calculation
of the
value limit (UAH
50 million);
-
Transactions leading to
no tax implications
must be
also reflected in
a transfer pricing return;
-
Control covers
transactions with
related
parties-residents
who either carrying out
(i)
exportations (0%
rate of VAT),
(ii)
trading in securities
(10% rate of
corporate income
tax) or
(iii)
are subject to withholding
tax;
-
No provision on the
imposition of the
fine for the
failure to submit
a transfer pricing return (100 minimum
statutory salaries) in
case of the failure to reflect some control transactions in such a
return;
-
Self-adjustment
of prices in controlled
transactions could be
done within
a 1095-days
limitation period
(not
only within
a calendar
year term
derived from the literal
interpretation of
the Tax
Code of Ukraine);
-
For a transaction made
in a
foreign currency, the
value limit (UAH 50 million)
is calculated
according to
the National Bank of Ukraine’s
exchange rate effective at the date of the transaction. If there is
an advanced payment, then the exchange rate effective at the date of
the receipt (carrying out) of the advanced payment applies;
-
The value of imported raw materials/exported goods within the scope
of a tolling agreement entered into with a non-resident is dropped
out for the calculation
of the
value limit (UAH
50 million);
-
Sales of goods
to
non-residents–related
parties through
commercial agent
(commissionaire)
arrangements are considered
controlled transactions;
-
List of
“low-tax
jurisdictions”
approved by
the Cabinet
of Ministers
of Ukraine
is not
closed. The control also covers
transactions with non-residents subject to corporate income tax at
the rate by 5 and more percentage points lower than that in
Ukraine irrespective of whether their jurisdictions are in the
abovementioned list;
-
For the
purposes of the calculation
of the
value limit (UAH
50 million)
each barter
transaction should be taken into
account twice: as a purchase of goods/services and as a sale of
goods/services.
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