• Service: Tax, Global Transfer Pricing Services, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 7/31/2013

Ukraine - Transfer pricing law is effective 1 September 2013 

July 31: The Ukrainian Parliament passed a transfer pricing law, and the new provisions will be effective 1 September 2013 (and not 1 January 2014, as previously expected).

Draft Law No. 2515—known in English as “On the Amendments to the Tax Code of Ukraine Regarding Transfer Pricing"—was passed on 4 July 2013 in the second and final reading.

Overview of provisions

The new transfer pricing law introduces the following changes to existing transfer pricing rules:

  • Repeal of the 20% “safe harbor” rule (i.e., the permitted 20% deviation from a market price)
  • Limitation of the list of transactions with Ukrainian residents that are considered “controlled” for transfer pricing purposes
  • Introduction of new transfer pricing tax audits standards and rules
  • A requirement that taxpayers prepare and file reports concerning controlled transactions along with supporting transfer pricing documentation
  • A requirement for “large taxpayers” to submit transfer pricing documentation within two months of a request from the tax authorities; all other taxpayers to submit transfer pricing documentation within one month of a request
  • A requirement that all taxpayers file annual reports of their controlled transactions before 1 May in the year following the tax year subject to the reporting
  • Introduction of a new penalty regime with respect to a taxpayer’s failure to submit the notification on controlled transactions and supporting documentation, with penalties of 5% of the total value of controlled transactions for the failure to file the notification, or equal to the sum of 100 minimal wage amounts for a failure to file transfer pricing documentation (applicable to large taxpayers)

Contact a tax professional with KPMG's Global Transfer Pricing Services.

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