Deadline for submitting reports on controlled operations is approaching – it's time to prepare!

Taxpayers please note that Sub-paragraph 39.4.2 Paragraph 39.4 Article 39 of the Tax Code of Ukraine (hereinafter – Code) stipulates that on September 30, 2022, the deadline for submitting reports on controlled operations and notifications on participation in the international group of companies for the reporting year 2021 expires.

Form and procedure for compiling Report on controlled operations are approved by Order of the Ministry of Finance of Ukraine № 8 as of 18.01.2016 (as amended).

Report consists of the title, main parts, annex and information to the annex, which are an integral part of the Report.

Form and procedure for compiling Notification of participation in international group of companies are approved by Order of the Ministry of Finance of Ukraine № 839 as of 31.12.2020 (as amended).

Despite the fact that taxpayers who can confirm absence of opportunity to timely fulfill their tax obligation to submit reports, during the martial law according to Paragraph 69 Sub-section 10 Section XX "Transitional Provisions" of the Code are exempted from responsibility stipulated by the Code; obligation to report on controlled operations remains.

It should be noted that confirmation of possibility or impossibility of the taxpayer's fulfillment of obligations will be carried out according to a separate procedure.

Be aware that analysis results of reports on controlled operations are used making a decision to conduct audit on the transfer pricing issues.

At the same time, if prices and/or profitability indicators are found to be inconsistency with market level, the taxpayer has a right to independently adjust the price of controlled operation and amount of tax liabilities, provided that this does not lead to a reduction in the amount of tax payable to the budget.

Therefore, in order to determine the need for self-adjustment, the State Tax Service recommends that taxpayers review operations for compliance with the "arm's length" principle and take advantage of opportunity to submit the clarifying calculation by 01.10.2022 without application of fines according to provisions of Paragraph 50.1 Article 50 of the Code.