Larysa Antoshchuk , Manager, Head of the Tax Dispute Resolution Group KPMG in Ukraine presented an analysis of the transfer pricing practice on 21th September during VI Tax Forum.
According to statistics provided by Ms Antoshchuk, 61% of the disputes associated with transfer pricing were won by taxpayers from 2013 to 2017.
During the speech, Larysa Antoshchuk highlighted various examples of disputes regarding the reporting of CUs in Ukraine, which may be caused by low-tax jurisdictions, UK partnerships (LLP), failure to report on CUs and export transactions performed via resident agents.
"According to the results of KPMG research in Ukraine, the majority of disputes on transfer pricing arise on technical issues (e.g. failure to report, non-disclosure of controlled transactions, appeals against acts or omissions of tax authorities). At present, 165 such disputes are underway. There have been few decisions regarding arm’s length principle- we have only two such cases. To summarize the disputes, several peculiarities should be emphasized. First of all, taxpayers, fiscal authorities, and judges are all learning how to apply transfer pricing rules in Ukraine, as well as how to select and analyze evidence. Obviously, errors and false paths cannot be avoided in the learning process. However, the legal practices currently taking shape warrant attention. New approaches have been found in proving and using the decisions of foreign courts. We hope the business and its representatives will continue in the same vein with being well prepared for disputes on transfer pricing issues”, Larysa Antoshchuk commented.