Lawyers propose transition period for introduction of transfer pricing

Kyiv, March 13 (Interfax-Ukraine) – Due to the haste in adopting laws on transfer pricing taxpayers and supervision agencies are not ready to apply it, experts of the AVERLEX Attorneys at Law and EUCON International Legal Center said at a press conference at Interfax-Ukraine on Wednesday, March 12.

The provision of a transition period when relaxing the strict approach taken by supervision agencies during checks will allow taxpayers to adapt to the complex new tax laws, the experts said.

The experts proposed canceling special rules for export-import transactions with contractors from jurisdictions with low taxes for certain goods such as fuel, ferrous products and grain until January 1, 2018 to ensure equality for all taxpayers.

Auditor Larysa Vrublevska said at the press conference that amendments to the relevant articles of the Tax Code should be made to ensure the non-application of sanctions foreseen in Article 120 of the Tax Code to the reporting period of 2013.

"At present, the official source of information on market prices is not in line with the requirements of tax laws. There are large fines set first in Article 120 of the Tax Code, which mean imposing a fine of 5% of the total volume of transactions under control for the non-submission of reporters by taxpayers and a fine of 100 minimum wages for the non-submission of documents," she said.

Answer to question No. 7 should be removed from the generalized tax consultation on some issues of the application of the transfer pricing requirements, which broadly interpreted the requirement stipulated in paragraph 120.2 of the Tax Code (the imposing of a fine of 5% of the sum of the transaction under control which was not mentioned in the report).