On September 4, 2018, within the School of Tax Practice “Legal High School”, the Discussion Hub “Global Trends in Transfer Pricing” was held. During the Event participants discussed the results of recent reporting campaigns in the branch of TP in Ukraine, national laws, current legislative initiatives, global trends in the branch of TP and unresolved issues in the industry.
Particularly, Larysa Vrublevska, the partner, the transfer pricing practice leader, was the moderator of the first section “Global trends of transfer pricing”. During her speech, Larysa Vrublevska dwelt on statistics, providing information on declaring controlled operations in terms of countries, years, types of operations and controlling bodies. The speaker also noted that currently, the controlling body carries out 30 inspections on compliance with the principle of “arm’s length”, only 68 inspections have been performed, 38 have already been completed. To continue the report Larysa Vrublevska added that the number of taxpayers who independently adjust their tax liabilities increases each year, and as of March 15, 2018, the financial result was increased to UAH 5.3bn prior to taxation.
During the second section speakers discussed the documentation and reporting of the TP. So, Larysa Vrublevska spoke on the topic of “Justification of the price level in operations for the purchase of goods from a non-resident”. The speaker on a concrete example described the scheme of resale of goods in the Ukrainian market in uncontrolled operations, told about the algorithm of functional analysis of CO, the ways and factors on which the most appropriate method of transfer pricing was chosen and pointed out the features of such methods as the method of resale price, the method of “cost-plus”, the method of net profit and the method of distribution of profit.
Yuriy Chebotar, Advisor, Deputy Head of Transfer Pricing Practice spoke about TP reporting, a report on uncontrolled operations and transfer pricing documentation, namely: specified the list of controlled operations, the criteria for connection for legal entities and individuals, the list of states that complied with the criteria, a list of organizational and legal forms of non-residents, provided a description of the criteria for the counterparty and the value criterion. The speaker also talked about reporting in the field of transfer pricing and the peculiarities of the preparation of TP documentation, gave examples of liability for violation in the field of TP.
Mykola Mishin, the Head of the Transfer Pricing Audit Department of the Tax and Customs Audit Department of SFS of Ukraine, Julia Kasperovich, the Chief Advisor of the Financial Security Department of the National Institute for Strategic Studies, Yevgenii Kozlov, the Chief Advisor to the National Security Research Institute of the National Institute for Strategic Studies and others participated in the discussion.