APA: how big business can agree pricing rules in advance
Press service of the State Tax Service of Ukraine , published 29 October 2026 at 13:45 Chapter: News
Big business can agree in advance with the State Tax Service on approaches to determining whether controlled transactions comply with the arm’s length principle. Procedure for preliminary pricing agreement is provided for this purpose (APA – Advance Pricing Arrangement).
APA allows the taxpayer to enter into agreement with the State Tax Service that predetermines methods, information sources and criteria by which controlled transactions will be assessed. This makes tax planning more predictable and helps avoid future disputes.
What does business gets if it complies with APA agreement:
- Predictability. Agreed methods and criteria are applied for duration of the agreement – up to five calendar years, with extension possibility. By agreement of parties, its effect can also extend to previous reporting periods (roll-back), if they are not subject to the transfer pricing review.
- Tax guarantees. If the payer complies with agreement terms, the controlling authority does not conduct audit on the compliance of transactions that are its subject with the arm’s length principle and does not make a decision on additional tax liabilities, fines and penalties for such transactions.
- Less disputes. Agreeing pricing approaches in advance helps avoid future disputes over methods and information sources, provided that terms of controlled transactions remain unchanged.
- Stability. Terms of the APA agreement are preserved in case of changes in tax legislation in relation to the relations related to the conclusion, amendment or termination of such agreement, as well as in case of the taxpayer losing status of a large taxpayer.
APA procedure is one of modern tax administration tools that complies with the OECD international approaches and BEPS standards. Its application contributes to development of mutual trust between the state and business and gives companies more certainty carrying out cross-border and other controlled transactions.
Reference. Legal basis for application of APA is determined by Paragraph 39.6 Article 39 of the Tax Code of Ukraine. Procedure for submitting and considering applications, requirements for documents, as well as rules for concluding, amending and extending agreements are determined by Resolution of the Cabinet of Ministers of Ukraine № 1114 as of 28.10.2021.
State Tax Service is open to constructive dialogue with big business and recalls the possibility of using procedure for prior pricing agreement to increase predictability of tax relations.