Ukraine has excluded 41 states and added 9 to the list of countries whose transactions with counterparties are subject to control under the transfer pricing (TP) law, according to Resolution No. 1505 of December 27, published by the Cabinet of Ministers on its website on Monday.
“Taking into account the provisions of the law No. 3813-IX dated 18.06.2024 “On Amendments to the Tax Code of Ukraine regarding the peculiarities of tax administration during states for taxpayers with a high level of voluntary compliance with tax legislation”, the updated list of states (territories) will contain 46 states (territories) instead of 78,” the Ministry of Finance noted in the commentary to the resolution.
The Ministry of Finance clarified that the list includes states from the list of offshore zones approved by the government and the FATF blacklist. FATF, as well as states (territories) that do not ensure timely and complete exchange of tax and financial information.
We are talking about 9 states and territories: American Samoa, Guam, DPRK, Myanmar, Namibia, Netherlands Antilles, Alderney, Trinidad and Tobago, Fiji, and Guam.
At the same time, the Ministry of Finance added, the states with which Ukraine has concluded international treaties for the avoidance of double taxation are excluded.
According to the adopted resolution, 41 countries or territories were removed from the list, including: Bahrain, Bosnia and Herzegovina, Brunei, Burundi, Cape Verde, Cape Verde, China Hong Kong Special Administrative Region (EU), Djibouti, Dominican Republic, Ireland, the Autonomous Community of the Canary Islands of the Kingdom of Spain, Cuba, Guadeloupe, Guatemala, Kyrgyzstan, Cyprus, the Autonomous Province of Kosovo and Metohija of the Republic of Serbia, Cuba, Curacao, Laos, Lebanon, Mauritius, and Qatar.
The list also includes the Macao Special Administrative Region of China, the Former Yugoslav Republic of Macedonia, the Federal Territory of Labuan Malaysia, Morocco, Martinique, and the Federated States of Micronesia, Moldova, the United Arab Emirates, Oman, Paraguay, the Commonwealth of the Northern Mariana Islands, the Autonomous Region of Madeira of the Portuguese Republic, San Marino, Sao Tome and Principe, Sudan, Timor-Leste, Turkmenistan, Uzbekistan and Montenegro.
According to the resolution, it will come into force on January 1, 2025.
As reported, according to the Law “On Amendments to the Tax Code of Ukraine on Transfer Pricing”, which entered into force on September 1, 2013, the TP rules apply to controlled transactions with residents of low-tax jurisdictions (income tax rate in which is 5 percentage points or more lower than the Ukrainian rate).
On Monday, Danylo Hetmantsev, the head of the relevant parliamentary committee, said that about 35,000 taxpayers have already submitted their first reports on controlled foreign companies (CFCs), and the budget has received an additional UAH 1.88 billion.
“By the way, tomorrow, December 31, is the last day of a difficult but productive year of 2024. This is the last day to submit full CFC reports for 2023,” he reminded.
Hetmantsev added that on December 26, amendments to the Code regarding fines for failure to submit information and CFC reports came into force, but everyone will have the opportunity to report within six months after the lifting of martial law, without fines.
