EUCON Law Group Experts on Transfer Pricing became the key speakers of a large-scale seminar on “Transfer pricing: reporting, innovation, automatic exchange of tax information” organized by the General Directorate of the SFS in Kyiv on September 12, 2018.
Larysa Vrublevska, a partner, manager of transfer pricing practice, speaking on the topic “Preparing for the reporting campaign in the field of TP”, reminded that the reporting consists of three documents: the report on controlled transactions, the tax return on corporate profit tax (in addition to the TP) and documentation of TP. Particularly, the speaker described the main details of the CT and their list, the cost criterion and its calculation, the correction to the report on CT and the correction to the income tax return. Mrs. Vrublevska also shared information on recent changes in laws in the field of TP, particularly, she focused on issues of new criteria for the establishment of a list of states (territories), transactions with residents that are recognized as controlled, expansion of the scope of the list No. 480, the order of the application of the lists No. 1045 and No. 480 in 2017 and 2018, self-adjustments for TPs and different periods for adjusting the financial result before tax for controlled and uncontrolled economic transactions.
Yuriy Chebotar, Advisor, Deputy Head of Transfer Pricing Practice spoke on the topic of “Basic Principles for the Preparation of Qualitative Documentation”. So, the speaker told about the procedure for drawing up and storing the documentation. In more detail, Mr. Chebotar dwelled on the features of high-quality documentation, among which he highlighted: the need for formal compliance with the requirements of sub-clause 39.4.6 of the Tax Code of Ukraine, the establishment of a stable range of prices and profitability, and a description of the approaches to choosing methods, taking into account the priority of the application. As to the rationale for choosing comparable operations and individuals, the expert explained that here it is necessary to emphasize the criteria which the comparison was made by. Also, the specialist stressed that taxpayers in the preparation of documentation should take into account the rules of Article 39 of the TC of Ukraine, which acted on the day of receiving the request from the tax authorities.
Yaroslav Romanchuk, Lawyer, Managing Partner of the EUCON Law Group introduced the participants the original presentation on “Implementation of the BEPS plan in Ukrainian laws”. Thus, Mr. Romanchuk spoke about the content of the plan and its overall structure, expectations, forecasts and prospects for its implementation in Ukrainian laws, particularly on the minimum standard (implementation of the main 4 out of 15 steps), which Ukraine pledged to implement in the within BEPS. The speaker stressed out that, despite the recommendation nature of the document, it had already begun to significantly affect the future of international business. Yaroslav Romanchuk also identified the main consequences of BEPS for Ukraine: the “end” of the offshore era, the era of banking secrecy, and the ability to open an account in “decent” jurisdiction, strengthening of the control over the reporting process. Especially the speaker focused on the issue of offshore, noting that today business representatives who have created a structure for tax optimization using offshore, already have a number of problems. In addition, Mr. Romanchuk spoke about the global trend of “getting out of the shadows” and looking for ways for more transparent structuring.
The workshop was also attended by: Susanna Mihonik – Head of the Audit Department of certain objects and categories of taxpayers of the Audit Department of UKRINFORM of Ukraine in Kiev, Lilia Feshchenko – Head of Transfer Pricing Control Department of UKRINFORM of Ukraine in Kyiv.