A bill on improvement
of tax control over transfer pricing, which the Government submits to the
Parliament, is due to take effect this year. "Taxation of profits of large
companies by 2015 should be held based on this law," Prime Minister of
Ukraine Arseniy Yatsenyuk stressed at a Government meeting on Wednesday,
He emphasized that
the law on transfer pricing would afford to obtain the taxes for the state’s
purposes “not basing on undercharge, but on a real price of goods". He
noted that a scheme is in effect, "For instance ore, which costs USD 100 on
the stock exchange market, is sold to an offshore company at USD 50, but as an
offshore company in turn sells it at USD 100, no taxes are paid".
After the law comes
into force, "no matter how many offshore companies are in the chain, there
is a stock market price of the goods, thus, Ukraine will get relevant taxes not
based on undercharge but on a real price, which must correspond to the market
and stock price", Arseniy Yatsenyuk was quoted as saying.
According to the PM,
the corresponding law will apply to each financial transaction, "Those
coming with the purview of the law will be also chemical and metallurgical
enterprises. It will be impossible to hide incomes in offshore companies and
"I address the
entire big business to get ready to file fair and open tax reports for 2015
regarding taxation of a profit tax," said Arseniy Yatsenyuk.
He informed that under
the State Fiscal Service there will be established a transfer pricing control department,
"We receive a technical assistance from our Western partners to verify
whether the price at which they sell corresponds to the world price, and also
in order to help Ukraine’s big business to pay taxes honestly and fairly, as
also to keep track of all financial transactions, wherever they are carried out,
no matter which country and which company is involved in this process".
"If we say that
people must save, it means those must pay who are obliged to pay - big
business. This principle of social justice in tax area is advocated by the new
Ukrainian Government," added the Prime Minister.