International tax information exchange is effective control tool within the transfer pricing sphere and international taxation

With an aim of ensuring effective counteraction against tax evasion and its minimization at the international level, the vast majority of countries have implemented international standards of transparency and information exchange in the tax sphere.

As of today, Ukraine is fully involved in processes of tax information exchange, which are carried out on the basis of Convention on Mutual Administrative Assistance in Tax Matters (with changes), ratified by the Supreme Council of Ukraine in 2008, as well as current international agreements on the avoidance of double taxation and prevention of tax evasion regarding taxes.

Tax information exchange with competent authorities of foreign countries, which does not stop even during the martial law, is a particularly important and effective tool for protecting economic interests of our state working out transfer pricing and international taxation issues.

The vast majority of special requests for obtaining tax information are directed to the competent authorities: Republic of Cyprus - 32%, Switzerland - 18%, Great Britain - 9%, Germany and Luxembourg - 7% each, Netherlands, Italy and Spain - 5% each, other countries - 12%.

Results of such information exchange, namely, materials received upon special requests, have a decisive influence on the further course of control and verification activities and allow verification to cover those issues that remained outside tax control for a long time, but in respect of which information/documents were received from foreign state bodies, which indicate violations of tax, currency and other legislation.

At the same time, information received from foreign competent authorities is also used in formation of the evidence base, high-quality documentation of violations, helps to form exemplary cases to support position of the State Tax Service during court appeals, which ultimately ensures receipt of monetary obligations to the budget.

State Tax Service of Ukraine is grateful to its partners – foreign competent authorities for high-quality interaction and effective cooperation on the tax information exchange in the context of combating international schemes to erode tax base and withdraw profits from taxation.