Transfer Pricing

On 4 July 2013 the Parliament of Ukraine passed the Law “On Changes to the Tax Code of Ukraine in respect of transfer pricing rules”. The Law has come into force on September 1, 2013.

Since that time Ukraine has joined the countries that have been providing their tax policies in according to the transfer pricing rules.

That’s why we have been providing active support for our clients in preparation of the necessary information and data for submitting the Report on controlled transactions and the Documentation on controlled transactions to State Fiscal Service of Ukraine in order to meet the requirements established by the tax legislation on transfer pricing.

Detailed content of services are:

І. Collection and preliminary analysis of the information for preparing Reports on controlled transactions and Documentations on controlled transactions:

1. Information on related parties.

2. Information on the group (set of entities that are deemed to be related parties), including group structure, description of activities and transfer pricing policy of the group.

3. Description of the transaction, the conditions of its completion (cost, terms, and other matters required to create a valid agreement/contract under Ukrainian legislation).

4. Description of the goods (works, services), including physical characteristics, quality and reputation on the market, the country of origin and the manufacturer, the presence of a trade mark, and other information related to the characteristics and quality of the goods (works, services).

5. Terms and conditions of settlements.

6. Factors that influence the pricing.

7. Information about:

  • the functions of related parties who are parties in the controlled transaction;
  • the assets used by them in connection with the controlled transaction;
  • the economic (commercial) risks which those parties took into consideration during the controlled transaction (functional analysis and risk analysis).

8. Economic analysis, including:

  • the methods that are used to determine the price of a controlled transaction and an explanation of the reasons for selecting that particular method;
  • the amount of earned income (profits) and/or the amount of expenses (losses) incurred as a result of the controlled transaction;
  • the level of profitability;
  • the calculation of the market price range (profitability) in respect of a controlled transaction (including a description of the approach used to select comparable transactions);
  • the sources of information used to determine the price of controlled transactions.

9. Results of a comparative analysis of the commercial and financial conditions of transactions.

10. Information on the proportional adjustment of the tax base and tax amounts made by the taxpayer (if any).

ІІ. Assistance in Preparation of the Report on controlled transactions for submitting to State Fiscal Service of Ukraine with Appendices.

ІІІ. Assistance in preparation and submitting the Documentation on controlled transactions to submitting to State Fiscal Service of Ukraine.