Regarding adjustments to non-resident income payments and compliance with the “arm's length” principle

Verkhovna Rada of Ukraine adopted Law of Ukraine № 3219-IX as of 30.06.2023 "On amendments to the Tax Code of Ukraine and other laws of Ukraine regarding taxation peculiarities during the martial law" which provides that temporarily, for a period from 01.08.2023 until termination or cancellation of the martial law on the territory of Ukraine, introduced by Decree of the President of Ukraine "On the introduction of martial law in Ukraine" № 64/2022 as of 24.02.2022, in case of the taxpayer’s self-correction, according to the procedure, requirements and restrictions specified in Article 50 of the Tax Code of Ukraine (hereinafter – Code), of errors that led to an understatement of tax liability - such taxpayer is exempted from calculation and payment of fines and penalty provided for in Paragraph 50.1 of Article 50 of this Code.

Specified innovation applies, in particular, to adjustments to be made by business entities from the corporate income tax in terms of income payments to non-residents and compliance with the “arm's length” principle.

At the same time, statute of limitations determined by Paragraph 102.1 of Article 102 of the Code, in particular, with regard to operations carried out according to requirements of Article 39 of this Code, is 2555 days.

Therefore, taxpayers can file clarifying Report on controlled transactions beginning in the 2015 reporting year.