Detection of transfer pricing operations
Businesses often face the risks of incomplete or incorrect identification of business transactions that fall under the rules of transfer pricing. This is because transfer pricing rules can be applied to both controlled and uncontrolled transactions.
Operations with separate counterparties are controlled if two conditions are met:
- annual income of your company exceeds UAH 150 million.
- total volume of transactions with an individual counterparty exceeds UAH 10 million.
Such counterparties include:
- related non-residents
- non-resident commission agents through whom transactions on sale and/or purchase of goods and/or services are carried out
- non-residents registered in the states (territories) included in the list of states (territories) approved by the Cabinet of Ministers of Ukraine
- non-residents with organisational and legal forms defined in the list approved by the Cabinet of Ministers of Ukraine
- permanent representations of non-residents
We also work on cases where the volume of the transaction is on the verge of being controlled, to identify the risk of a possible increase in the volume of the transaction if the “arm’s length principle” principle is applied.
Uncontrolled, but subject to the transfer pricing rule, are transactions for the purchase and sale of goods (services), the amount of which does not exceed UAH 10 million, carried out with non-residents registered in the states included in the list of states approved by the Cabinet of Ministers of Ukraine, non-residents, the organisational and legal form of which is available in the list approved by the Cabinet of Ministers of Ukraine.
Our specialists will help you test all transactions with non-residents in order to identify business transactions that are subject to transfer pricing rules.
- submission of a report on controlled transactions – by October 1 of the year following the reporting year
- submission of a revised annex of transfer pricing to the annual corporate income tax return without penalties – by October 1 of the year following
- submission of a notice of participation in an international group of companies – by October 1 of the year following the reporting year
- submission of transfer pricing documentation – no later than 30 days from the date of receipt of the request of the supervisory authority
- storage of transfer pricing documentation – for 7 years