Main aspects of the transfer pricing judicial practice
Ukraine is fully involved in processes of combating erosion of the tax base and withdrawal of profits from taxation (BEPS Action Plan), which is a world trend in the context of globalization of the economy.
Therefore to date, development of judicial practice on the transfer pricing, as one of the tools to prevent use and destruction of aggressive tax evasion schemes, requires significant attention today.
Judicial practice on the transfer pricing is conditionally divided into formal and essential cases. Formal disputes include matters related to the timeliness of report on controlled operations, completeness of controlled operations in such report and legality of the application of fines. Essential cases include cases regarding determination of compliance of conditions of controlled operations with the "arm's length" principle, which consider correctness of definition of the transfer pricing method, selection of comparable operations/companies, calculation of profitability, etc.
Accumulation process of judicial practice allows establishing transparent, clear and fair rules for taxation of controlled operations, avoiding methodological mistakes, contributes to conducting open dialogue between the taxpayer and the controlling body, and improving business climate in Ukraine.
To this end, the Supreme Court published review of judicial practice of the Cassation administrative court as a part of the Supreme Court regarding the transfer pricing, in particular, regarding taxation of the following operations:
recognition of economic operations as controlled;
implementation of the "arm's length" principle;
peculiarities of tax reporting and control.
Read the review at the link:
