The II international forum TRANSFER PRICING – 2016, which is considered to be an important platform for exchange of ideas and professional advice among practitioners in the field of transfer pricing, took place in Kyiv on March 24, 2016.
The forum was organized by the Council of Independent Accountants and Auditors of Ukraine, International Legal Center EUCON, Tax Advisors Association and International Audit Union. Nearly 200 participants attended the forum.
The first panel discussion set the tone for the whole event. The discussion was attended by Deputy Minister of Finance of Ukraine Elena Makeyeva; Member of Parliament, Deputy Chairman of the Verkhovna Rada Committee on Taxation and Customs Policy Andrii Zhurzhii; Head of the Central Office for maintenance of large taxpayers Yevhen Bambizov; Director of Tax and Customs Audit Department of the State Fiscal Service of Ukraine Nataliia Ruban. Lawyer, managing partner of the International Legal Center EUCON Yaroslav Romanchuk and an auditor, partner Larysa Vrublevska moderated the panel discussion.
Opening the forum, Yaroslav Romanchuk emphasized the growing interest in transfer pricing issues and mentioned that on March 21 it was decided by the National Bank of Ukraine, the State Fiscal Service of Ukraine and the Antimonopoly Committee of Ukraine to develop a common strategy of business deoffshorization in the context of BEPS implementation.
Deputy Minister of Finance Olena Makeyeva put emphasis on the fact that the BEPS plan will be gradually implemented into the national legislation of Ukraine, but this process will not be fast.
Natalia Ruban informed about the organization of the departments which monitor the transfer pricing compliance. She emphasized that the State Fiscal Service identified 109 violations by taxpayers regarding the timeliness of filing and completeness of the reports.
The representatives of the executive authorities answered the questions related to implementation of the tax reform regarding transfer pricing. The fact that finally there are the first cases on inspections of the taxpayers became a special feature of the forum, and some of those cases were discussed in details. Yevhen Bambizov told about the decision to provide every major taxpayer with a consultant, representative of the State Fiscal Service, and provided information on the first practice of inspections in the field of transfer pricing.
Auditor, partner of the International Legal Center EUCON Larysa Vrublevska spoke about the algorithm of preparing transfer pricing documentation and gave a number of recommendations that will help to avoid risks.
To sum up, answers of the officials let us conclude that we should not expect any major changes in the legislative field in 2016. The monitoring was promised to be done in a careful and accurate way. Inspections will take place regarding those companies engaged in aggressive tax planning and obviously abusing regulations in order to avoid double taxation.
Zhanna Biloblovska, auditor of the International Audit Union spoke about international tax planning through the prism of G20 and OECD guidelines. In particular, she referred in detail to the six main courses of BEPS. It is important to remember that BEPS plan is not mandatory for use, but only shows the right direction. Among the principles of modern tax planning special attention was paid to the «substance» concept, which was explained thoroughly by Zhanna Biloblovska.
Oleksii Daryin, Head of commercial and tax practice at REVERA law firm spoke about the specifics of application of transfer pricing rules on example of Belarus.
The auditor of the International Audit Union Oksana Puzko told the participants about methods of price substantiation in terms of availability and accessibility of information on comparable transactions, and Larysa Vrublevska focused on the problems of preparing documentation.
During the third session issues of tax control, forming strategies to protect the interests of the taxpayer and the first experience of price level substantiation were discussed. Dmytro Serebriansky, the director of the Research Institute of Financial law, a member of the Tax Advisors Association was the moderator of the session.
Volodymyr Bevza, the lawyer of the International Legal Center EUCON, spoke about the risk factors that may result in inspection. He provided the participants of the forum with the detailed list of risks taken into account by the State Fiscal Service.
Head of Transfer Pricing Audit Unit at the Tax and Customs Audit Departament of the State Fiscal Service of Ukraine Mykola Mishyn, spoke not only about the approach and procedure of inspections, but also focused on specific cases.
The forum was also attended by the judge of the Supreme Administrative Court of Ukraine Natalia Blazhivska, who shared the international experience of dispute resolution in the field of transfer pricing and spoke about some specific cases and judicial decisions concerning transfer pricing in courts of appellate instance in different regions of Ukraine (Kharkiv, Lviv, Zaporizhia).
The final fourth session was fully focused on the practical cases.
Clear algorithm of substantiation of the price level in goods import transactions made within a group of companies, and examples based on real companies were explained by the tax advisor of the International Legal Group IB Group Anna Shavliuk. The whole process of price substantiation according to Anna can be described as follows: 1) functional analysis 2) identify the tested party 3) choose the method of transfer pricing, 4) analyze/select comparable transactions/companies 5) comparative analysis.
Photos from the forum can be viewed HERE.
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Reports in the mass media about the forum:
- Business weekly;
- Yuridicheckaya Praktika weekly: 1st Report, 2nd Report, 3rd Report
- Газета “Бухгалтерия”
- Бухгалтерський тижневик “Дебет-Кредит”