The Ministry of Finance approved the General Tax Consultation on some issues of application of transfer pricing rules (TPR)

Based on the results of the work of the Expert Council on the preparation of the Code of Criminal Procedure under the Ministry of Finance, the Order of the Ministry of Finance approved the Generalized Tax Consultation on some issues of transfer pricing rules (TPR). The last consultation was issued by the Ministry of Revenue in 2014.
The consultation provides a thorough explanation of four issues related to:


  • Peculiarities of application of criteria person’s connection when determining the range of comparable legal entities profitability;


  • The list of information that must be contained in the documentation from the TPR, taking into account the changes introduced by the Law of Ukraine of 16.01.2020 № 466-IX (hereinafter – the Law № 466);


  • The procedure for applying penalties to taxpayers in the case of self-adjustment of the price of the controlled transaction for the reporting year 2019 and the submission of the relevant adjustment calculation after October 1, 2020;


  • Peculiarities of application of criteria person’s connection at definition of the controlled operations in the 2020 reporting year in connection with the changes introduced by the Law № 466.


Regarding the peculiarities of the application of criteria person’s connection in determining the range of profitability of comparable legal entities, it is explained that the taxpayer applies the criteria provided for in the fourth paragraph. pr. 39.3.2 § 39.3. 39 of the Tax Code of Ukraine, in the absence of information indicating that these legal entities carry out transactions with related entities.

Regarding the list of information, it is clarified that the requirements for substantiation in the documentation of the economic feasibility of the controlled operation (economic benefit resulting from such an operation) and the presence of a business purpose must be complied with by taxpayers when compiling TPR documentation starting from 2020. year. At the same time, with regard to the TPR documentation for the periods up to 2020, which has already been compiled by the taxpayer and kept by him until the request for its submission to the supervisory authority, the taxpayer may include on his own initiative in such documentation obtained as a result of such an operation and the presence of a business purpose.

Regarding the application of penalties, it is clarified that in the case of a taxpayer’s independent adjustment of the price of a controlled transaction and the amount of tax liabilities for the reporting year 2019, the penalties are not applied:

1) when submitting an adjusting calculation no later than October 1, 2020;

2) when submitting an adjusting calculation after October 1, 2020 to the last calendar day of the month (inclusive) in which the quarantine expires.

In response to questions about the specifics of the application of the criteria of person’s connection in determining controlled transactions in the 2020 reporting period, we consider the practical cases that may be encountered by the taxpayer, and provide detailed explanations on the recognition of controlled transactions.


The full text of the General Tax Consultation is available at:

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