TRANSFER PRICING PRACTICE

In Ukraine, the transfer pricing rules were put into effect on 1 September 2013. Since then, almost every year they undergo significant changes that need to be taken into account when planning business transactions = with foreign counterparties.

Given the high penalties for q failure to submit or late submission of the Controlled Transactions Report, or the non-inclusion of a controlled transaction to the already submitted Report, or failure to submit a Transfer Pricing Documentation request, etc., we recommend that our clients pay particular attention to detecting and analyzing controlled transactions and their mandatory inclusion in the Controlled Transactions report and a due justification in the Transfer Pricing Documentation.

In 2020, for the first time, taxpayers with controlled transactions filed a Notice of Participation in an International Group of Companies, and we actively assisted our clients in gathering the information needed to prepare the Notice and compile the Notice itself.

Also, on 23 May 2020, Ukraine introduced a three-level reporting on TP in accordance with Art. 13 of the BEPS Plan. This means that depending on the criteria stipulated by the Tax Code of Ukraine, Ukrainian taxpayers will need to prepare in addition to the usual CT Report and TP Documentation also the Global TP Documentation (Masterfile) and the Country-by-country report .

As part of TP consulting, we help our clients to properly design TP policies, carefully analyze controlled transactions to select the most appropriate TP method and source of information, and test controlled transactions for business purposes. Due to the careful approach of regulatory authorities in conducting TP audits, we personally accompany our customers during such audits and protect their interests in administrative and legal disputes with regulatory authorities.

With a high level of expertise in transfer pricing and powerful capacities of the Nexia International network, we offer to our clients qualified assistance in planning, managing, documenting, evaluating and protecting their transfer pricing policies and related business processes.

Since 2013, our TP experts have successfully provided consulting services in the field of transfer pricing to more than 300 public and private companies that, in particular, work in the following areas: oil and gas, electricity generation and electrical supply, growing and sale of various agriculture; defense, food processing, construction, pharmaceutical etc.

ANALYSIS OF BUSINESS TRANSACTIONS

One of the most important stages in the analysis of conditions for making controlled transactions is their correct and exhaustive definition. The timely and correct detection of controlled transactions allows for effective control over the risks associated with transfer pricing.

The purpose of the analysis is to obtain information that gives an objective and accurate picture of the state of business transactions. Our experts analyze business operations of a group of companies and identify controlled operations.

DEVELOPING INTERNAL METHODOLOGY

The development of internal methodology for TP includes the preparation of the necessary documentation, which involves selecting the most effective and appropriate methodology of transfer pricing, definition of pricing policies, preparation of TP template documents, internal control of TP. These services are offered to assist in implementing the TP policy in a company and further monitoring the conditions for the implementation of controlled transactions.

ASSISTANCE WHEN SIGNING A CONTRACT

Drawing up and preparing contracts properly will provide and guarantee the security of your business. Our experts will help you analyze all aspects when signing contracts for potentially controlled transactions, which will enable the company to avoid additional difficulties in the analysis of such transactions. Due to many years of experience, our specialists know all the possible nuances and situations that arise or may arise in the actual making of transactions and which must be stipulated in contractual terms and conditions.

PREPARING TP REPORTING

The TP reporting comprises 3 levels:

Report on controlled transactions and TP Documentation
Masterfile
Country-by-country report

Preparation of the CT report is a rather complicated procedure which involves timely organization and requires professional expertise. Our specialists offer services of preparation of the controlled transactions report and ensure compliance with all applicable tax laws.

Our experts offer services of preparing Transfer Pricing Documentation package in accordance with the requirements of the Tax Code of Ukraine, Government acts, the Ministry of Revenues and Charges of Ukraine, other ministries and departments, taking into account the provisions of the OECD Guidelines for TP. We guarantee confidentiality and information security to all our clients.

During the preparation of the Transfer Pricing Documentation, our specialists thoroughly examine the activities of the company within the controlled transactions, investigate relevant markets and fully take into account the specifics of the client’s business.

Besides, if a taxpayer is part of an International Group of Companies (IGC) and is required to prepare a Global TP Documentation, our experts have practical experience in compiling such Global Documentation together with other Nexia International companies.

Finally, we can assist in the preparation of the Country-by-Country Report required from a taxpayer if they are a member of the IGC and are a parent company of such an IGC, and in some other cases provided by the Tax Code of Ukraine (provided that the total income of such IGC for the previous reporting year exceeds EUR 750 million). Such Country-by-Country reports are subject to automatic exchange of information, so their preparation should begin in advance.

In 2020, taxpayers filed their Notices of Participation in IGC for the first time, and we successfully assisted our Clients in preparing such Notices and collecting information to properly display information about IGC's parent company, IGC's total income and other information contained in the Notice.

LEGAL SUPPORT DURING INSPECTIONS

We offer legal support services during inspections which will help you identify and minimize transfer pricing risks and in case of administrative or court disputes, facilitate their effective resolution. Our experts who offer legal support will help a client prevent unwanted consequences.

IN-HOUSE TRAINING

Our Company’s experts offer transfer pricing training for specialists of a group of companies. In this way we help companies reduce the risks associated with transfer pricing in the future.

POLICY PREPARATION

Our specialists can prepare and develop Transfer pricing policies for a Group of companies. Transfer pricing policies include pricing measures, strategy development and pricing method selection, with conditions for making controlled transactions to be formed in accordance with the “arm’s length” principle.