On October 4, 2017, the State Fiscal Service (SFS) published Letter No. 1945/6 / 99-99-15-02-02-15 / IPK of September 13, 2017, which specifies the classification of transactions with a non-resident legal entity for the purpose of transfer pricing.
Pursuant to Article 39.2.1.1 of the Tax Code (TC), a transaction is considered controlled for transfer pricing if it affects the taxation of the parties and involves non-resident affiliates that do not pay corporation tax, including on income that is outside the state of registration of that entity or companies that are not tax residents in those states where they are registered as legal entities. The list of business forms of non-resident legal entities must be approved by the Cabinet of Ministers.
The Cabinet of Ministers of Ukraine dated July 4, 2017 approved Order No. 480 with the List of Organizational and Legal Forms of Non-Residents who do not pay income tax (corporation tax), including income tax received outside the state of registration of such non-residents, and / or not tax residents of the state in which they are registered as legal entities (hereinafter referred to as the List).
Therefore, if a non-resident legal entity is not registered as one of the business forms on the list, transactions with that non-resident legal entity are not deemed to be controlled at transfer pricing, unless the transaction meets the other criteria for controlled transactions in accordance with Article 39.2.1.1 of the TC.
