Due to the efforts of the European Business Association (hereinafter – the Association), a modified version of the Law of Ukraine “On Amendments to the Tax Code of Ukraine concerning Improvement of the Transfer Pricing Law” No1260-VII, dated 13 March 2014 (hereinafter – Law No1260-VII), сame into force on 30 May 2014 and provided certain improvements in the transfer pricing sphere.
Background: During an extended period of time, the Association made numerous requests to state bodies and systematically focused their attention on the imperfections of the current Ukrainian legislative norms regarding transfer pricing and problematic situations arising through their practical application.
We are glad to announce that Law No1260-VII regulated several discursive issues in the transfer pricing sphere, in particular it:
- postpones the first period for submitting report on controlled operations to 1 October 2014 for the period from 1 September 2013 to 31 December 2013;
- harmonizes the use of the definitions for “operations” and “commercial operations” in the transfer pricing sphere;
- reduces the cost of fines for the non-submission of report on controlled operations (from 5% of the total amount of the controlled operations to 100 minimum wages) and submission of uncompleted information (from 100 minimum wages to 10 minimum wages);
- states that a fine of 1 UAH shall be applicable for each mistake made concerning numerical accounting in the report on controlled operations (for the period from 1 September to 31 December 2014);
- stipulates that fines prescribed by Article 50 of the Tax Code of Ukraine will not be applied in the case of self-correction (adjustment) in the report on controlled operations made in the period from 1 September 2013 to 31 December 2014.
The Association would like to express our gratitude to the legislative and executive branches of Ukrainian state power for their constructive cooperation, their amendments to the current legislation of Ukraine and their consideration of the Association’s comments, as well as to all member-companies for their active positions and persistence in solving these problematic aspects.