On 13 May 2014 the Verkhovna Rada of Ukraine passed the Draft Law “On Amendments to the Tax Code of Ukraine Regarding Improvement of Transfer Pricing” No. 4527 of 16 April 2014. Currently the Law awaits the signature of the acting President of Ukraine.

The Law postpones the deadlines for submitting the Report on Controlled Transactions and decreases the penalties for noncompliance with transfer pricing rules (more details can be found in the EY Newsletter of 13 May 2014) Despite what many taxpayers expected, the tax authorities apparently believe that the Law does not postpone the timelines for conducting transfer pricing inspections or limit the tax authorities in their requests for transfer pricing documentation. We expect the tax authorities to start requesting transfer pricing documentation from taxpayers in the nearest future, with the aim of carrying out further inspections. Certain of our clients have already received such requests and thus can confirm that this process is under way.

Reminder: taxpayers have a month to provide transfer pricing documentation starting from the day subsequent to the one on which they receive the request. Large taxpayers have two months.

Please contact the Ukrainian TP team for additional information on transfer pricing rules in Ukraine.

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We will continue to monitor further developments and will be happy to discuss with you any issues related to this information.