Transfer Pricing: key trends and case law (Part 1)

On November 8th, during the Tax & Business Talks forum, A1 Consulting's team was represented by Oleksii Shchurko, who highlighted current trends in transfer pricing practices.

A prominent trend observed in October-November is increased requests from the State Tax Service (STS) following an initial analysis of Controlled Transactions Reports. One common request is clarifications on discrepancies between the reported controlled and external economic transactions. This often arises from differences between accounting records and customs data. Another frequent STS inquiry involves unpaid constructive dividends, as per the Convention indicating such dividends are non-payable.

Another crucial trend involves the Residence Certificate, which is essential for applying international conventions. The STS closely examines the certificate's completeness, including its duration, applicable country, and relevant tax.

Global transparency is also on the rise. Since July 2024, Ukraine's participation in the CbCR reporting system has expanded transparency in transfer pricing, aiding the STS in identifying risky counterparties through enhanced international information exchange.