Increase in the list of states (territories) whose companies
will be recognized as controllable for transfer pricing
purposes from January 1, 2018
On Approval of the List of States (Territories) that meet the criteria set out in subclause 18.104.22.168 of subclause 39.2.1 of clause 39.2 of Article 39 of the Tax Code of Ukraine and the recognition of the decree of the Cabinet of Ministers of Ukraine dated September 16, 2015 No. 977 invalid, the Government adopted a resolution “On Approval of the List States (territories) that meet the criteria set out in subclause 22.214.171.124 of subitem 39.2.1 of paragraph 39.2 of article 39 of the Tax Code of Ukraine and the recognition of the decree of the Cabinet of Ministers of Ukraine dated September 16 I 2015 No. 977 “in compliance with the Law of Ukraine of December 21, 2016, No. 1797-VIII” On Amendments to the Tax Code of Ukraine regarding Improvement of the Investment Climate “.
The list includes 85 states (territories). In determining the list of states (territories), the Cabinet of Ministers of Ukraine took into account the following statutory criteria:
– States (territories) in which the profit tax rate for enterprises is 5 and more percentage points lower than in Ukraine;
– States with which Ukraine has not entered into international treaties with provisions on the exchange of information;
– States whose competent authorities do not provide a timely and complete exchange of tax and financial information to the requests of the central executive body implementing the state tax and customs policy.
Thus, operations with a counteragent registered in the state (territory) included in the list, from January 1, 2018, are recognized as controllable for the purposes of transfer pricing.