Tax authorities updated their interpretation of certain transfer pricing issues

By Dmytro Donets, Svitlana Musienko and Dmytro Rylovnikov

On 1 July 2014, the Ministry of Revenues and Levies of Ukraine issued Order #368 ‘On amendment of generalised tax consultation on transfer pricing related issues, adopted by Order #699’, which significantly changed the respective tax consultation #699.

In particular, the order included additional questions and clarifications and drastically changed certain previous interpretations of the tax authorities. Overall, the restated consultation contains position of the tax authorities in respect of 41 questions related to application of transfer pricing (TP) regulation. Below we have summarised the most important points.

Dividends, investments, value of give-and-take raw materials from non-residents and respective final products, principal amount of loans and credits, deposits and repayable financial aid should be disregarded upon calculation of the UAH50m (£2m) threshold of controlled transactions. Previously the tax authorities had absolutely opposite position in this regard…

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