On 20 August 2021, the Ukraine Ministry of Finance announced the issuance of three orders that approve tax clarifications/consultations on:
- Issues of taxation of income of non-residents, which are equated to dividends (Order № 480);
- Filling in the notification on participation in the international group of companies (Order № 479);
- Temporary suspension of the deadline for taxpayers to respond to the requests of regulatory authorities to submit documentation on transfer pricing (Order № 478).
The Code of Criminal Procedure, approved by Order № 480, provides, provides guidance on the determination of the object and tax base for non-resident income tax in cases where payments in controlled transactions exceeding the arm’s length amount are deemed as (equated to) dividend payments. This includes guidance in cases where an income tax treaty applies that determines the maximum amount of tax that may be withheld.
The Code of Criminal Procedure, approved by Order № 479, provides guidance on Ukraine’s new transfer pricing documentation requirements, including the Local file, Master file, and Country-by-Country (CbC) report requirements that generally apply from 2021, as well as the requirement to submit the notice of participation in an international group of companies (i.e., MNE group). The order provides general guidance on what constitutes an MNE group, the definition of a parent company of a group, the determination of consolidated income, etc., which is generally in line with OECD guidance. The order also provides details on the information to be provided in the notice of participation, which includes information on the group parent, information on the company authorized to submit a CbC report, the end date of the group’s fiscal year, and information on consolidated income.
The Code of Criminal Procedure, approved by Order № 478, clarifies the temporary suspension of deadlines that have been provided for taxpayers to respond to requests from the tax authority during the COVID-19 period, which will apply up to the last calendar day of the month in which the quarantine ends. The key clarification made in the order is that the suspension does not apply to requests for the submission of transfer pricing documentation, which must generally be submitted within 30 days.
