Participants in the LHS Discussion Hub spoke about the readiness of the Ukrainian business to BEPS rules
On November 26, 2018, the Discussion Hub “BEPS: Is Business ready?” was held within the School of Tax Practice of Legal High Scool. During the Event, participants focused on discussing foreign experience of implementing the BEPS rules, Ukraine’s implementation realities of the key commitments undertaken by Ukraine when joining BEPS, key innovations in the draft law, business perspectives on proposed innovations, deafshorization and automatic exchange of information, etc.
Particularly, the discussion was attended by Yaroslav Romanchuk, the lawyer, the managing partner of the EUCON Legal Group. During the speech, Mr. Romanchuk focused on the issues of global processes of investing through foreign financial institutions. The speaker also noted that huge financial resources are located in low-tax zones and are not taxed in the countries of residence. In an update to his report, he added that, according to various sources, about 80% of world trade is for transactions that are carried out between companies belonging to the same group, i.e., between related parties. Mr. Romanchuk pointed out that after the 2008 global crisis, developed countries began to wonder on how to fulfill their pre-election promises and to force TNC pay taxes in countries where added value is generated. Thus, the G-20 leaders have gone a different way: not by way of tackling specific abuses, but by changing the rules based on the OECD system report, which laid the foundation for the development of new BEPS rules.
The speaker also pointed out that the introduction of the inclusive BEPS program has led to a global corporate tax reform and that this reform should make taxation more efficient, transparent and equitable. According to Mr. Romanchuk, we should look at the BEPS rules through the prism of three components, namely: the phenomenon, the documentation and a set of tools. To sum up briefly, the speaker noted that in late October, the Finance Ministry and the National Bank of Ukraine have published a draft law and gave a month for its discussion, the consequences of which will later become clear.
The meeting was also attended by: Mykola Mishyn – Head of the Transfer Pricing Control Department of the Tax and Customs Audit Department of the SFS of Ukraine, Nataliia Blazhivska – IFA Ukraine President, Vice President of the All-Ukrainian Association of Administrative Judges, Yevgen Kozlov – Chief Advisor to the National Institute for Strategic Studies and others.