The amendments to the Tax Code of Ukraine, proposed in the draft law on improving tax control on transfer pricing, bring the Tax Code in line with the requirements of the Organisation for Economic Co-operation and Development (OECD) on transfer pricing for multinational companies and tax services.

According to a post on the Finance Ministry of Ukraine’s website, the adoption of the law is one of the conditions included in the program on strategic and institutional reforms by the World Bank for Ukraine "Development Policy Loan".

The ministry said that a separate working group was drafting the document. The group included representatives of audit companies, the banking sector, and central executive power agencies. The draft law was studied by the mission of the International Monetary Fund (IMF) and experts of the World Bank.

"The bill introduces the 'outstretched hand' principle, which is the key standard for transfer pricing, and the main goal of transfer pricing is changed from defining the usual price to defining the comparability of conditions in transactions under control, taking into account the 'outstretched hand' principle," the ministry said.

The controlling agency is authorized to apply other methods for defining the price of transactions under its control, if the agency explains that the method used by taxpayers does not allow the definition of price when in line with the 'outstretched hand' principle.

Schemes for optimizing taxation via the artificial reduction of the sum of transactions with one contractor to less than UAH 50 million a year were removed.