Ukrainian govt updates list of commodities for control on arm's length principle
The Cabinet of Ministers of Ukraine has approved a new list of commodities to establish compliance of the terms of controlled transactions on the arm's length principle, according to a government decree of December 9, 2020.
According to the explanatory note to the draft decree, the previous list of commodities that have a stock exchange quotation and world commodity exchanges for control on this principle has lost its relevance due to the entry into force of tax law No.466-IX.
The decree overrides the previous list.
According to the document, the new list will come into force in 2021. The government indicated in it, in particular, fish and a number of fish products, shrimp, shellfish, coffee, tea, oats, wheat, corn, rice, soybeans, some types of seeds and oils, sugar, juices, alcohol, as well as clay, ores, coal, peat, benzene, glycerin, mineral fertilizers, etc.
As reported, on January 1, 2015, amendments to the Tax Code entered into force, which improve tax control of transfer pricing by introducing the special concept of "arm's length principle." To exercise tax control on transfer pricing, it is envisaged to use the average price of a number of goods that has developed on the commodity exchange for the decade preceding the controlled operation. Tax Law No.466-IX, signed by the president in May, introduces, among other things, changes to the transfer pricing rules. They come into force in 2021.