Advance pricing agreements in Ukraine

According to the transfer pricing rules adopted nearly four years ago, taxpayers may enter into advance pricing arrangements ("APA") with the tax authorities. However, so far no APA has been entered into in Ukraine. This is expected to change in the near future – and that is why we would like to bring the following information to your attention.

The APA is an agreement between a taxpayer and the tax authorities, laying down a set of criteria to determine the arm’s length nature of a controlled transaction, made in advance of the actual transaction.

The APA can protect the taxpayer from additional tax liabilities, fines, and penalties. Based on the international practice, APA is a powerful tool to regulate relations between the taxpayer and the tax authorities.

The Ukrainian tax authorities have recently created a working group to improve the current APA procedure and develop the detailed guidelines. Such actions of the tax authorities might have stimulated one of the Ukrainian taxpayers to submit the first notification for entering into the APA.

For your convenience, we put together a presentation, outlining the key terms, benefits, and challenges of APAs in Ukraine.

If you are interested in signing an APA or look for more details about the procedure, please do not hesitate to contact us.