Transfer Pricing Report Deadline Postponed

EY LLC, Kyiv, Ukraine, 
Tuesday, May 13, 2014

Published by U.S.-Ukraine Business Council, 

Wash, D.C. Tuesday, May 13, 2014

On 13 May 2014 the Verkhovna Rada of Ukraine has voted for Draft Law “On Amendments to the Tax Code of Ukraine Regarding Improvement of Transfer Pricing” No. 4527 of 16 April 2014 (hereinafter – the Law).

Currently, the Law is pending signature of the Speaker of the Parliament and the acting President of Ukraine. If approved, the Law will come into force on the day after the day of publication.

Our understanding of the changes to the legislation is based on the text of the draft Law, which was registered for the parliamentary consideration. The draft Law, inter alia, envisaged the following changes:

► To postpone the deadline for submitting the Report on Controlled Transactions (TP Report) from 1 May 2014 to 1 October 2014

► To decrease the penalties for non-compliance with transfer pricing rules:

• the penalty for failure to submit the TP Report to be reduced from 5% of the controlled transaction amount to 100 minimum wages; the penalty for failure to submit TP documentation to be reduced from 100 minimum wages to 10 minimum wages

• a 1 UAH penalty for understatement of tax liabilities resulting from non-compliance with transfer pricing rules to be effective during the period from 1 September 2013 to 31 December 2014 (previously this period was from 1 September 2013 to 1 September 2014)

• the penalty for self-adjustments not to be applied during the period from 1 September 2013 to 31 December 2014

► To replace the term “transactions” with “business transactions” for the transfer pricing purposes.

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

***

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