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RESOLUTION OF THE CABINET OF MINISTERS OF UKRAINE

of July 17, 2015 No. 504

About approval of the Procedure for preliminary approval of pricing in controlled transactions by results of which the agreements having unilateral, bilateral and multilateral nature for the purposes of transfer pricing are signed

(as amended on 04-07-2018)

According to paragraph one of subitem 39.6.2.4 of subitem 39.6.2 of Item 39.6 of article 39 of the Tax Code of Ukraine the Cabinet of Ministers of Ukraine decides:

1. Approve the Procedure for preliminary approval of pricing in controlled transactions by results of which the agreements having unilateral, bilateral and multilateral nature for the purposes of transfer pricing which is applied are signed.

2. Declare invalid the resolution of the Cabinet of Ministers of Ukraine of October 17, 2013 No. 764 "About approval of the Procedure for approval of the prices in controlled external economic transactions by results of which the agreements having bilateral or multilateral nature for the purposes of transfer pricing" (The Official Bulletin of Ukraine, 2013, No. 82, the Art. 3051) are signed.

Prime Minister of Ukraine

A. P. Yatsenyuk

Approved by the Resolution of the Cabinet of Ministers of Ukraine of July 17, 2015 , No. 504

Procedure for preliminary approval of pricing in controlled transactions by results of which the agreements having unilateral, bilateral and multilateral nature for the purposes of transfer pricing are signed

1. This Procedure determines the procedure of preliminary approval of pricing in controlled transactions by results of which the agreements on preliminary approval of pricing having unilateral, bilateral or multilateral nature for the purposes of transfer pricing are signed (further - pricing reconciliation procedure).

2. The agreement on preliminary approval of pricing (further - the agreement), has unilateral, bilateral or multilateral nature - the written agreement signed between the large taxpayer (further - the taxpayer) and GFS on the results of the procedure of approval of pricing during which criteria of determination of compliance of conditions of controlled transactions which are performed are approved or will be performed by the taxpayer, to the principle of "outstretched arm".

In the consent of GFS and the taxpayer validity can be extended to all accounting period in which it is concluded, and/or for the accounting periods which precede the introduction it in force if concerning such accounting periods it is not carried out and is not performed concerning respect of the principle of "outstretched arm" by the taxpayer.

3. The conclusion of the agreement is free declaration of will of the parties of reconciliation procedure of pricing in case of achievement of consent by them concerning subject and provisions of such agreement.

One - two-or multilateral nature of the agreement is determined by the taxpayer independently for date of the appeal to GFS provided that the conclusion of the agreement two-or multilateral nature requires provision of confirmations of the fact that the partner of the taxpayer addressed to foreign state body, authorized to administer taxes and fees in the state which resident is the party of the controlled transaction (further - foreign tax authority), for the purpose of the conclusion of the agreement.

4. Attraction to reconciliation procedure of pricing of foreign tax authority is performed according to the international treaty (convention) on avoidance of double taxation between Ukraine and such state.

5. The taxpayer for the purpose of determination of feasibility of the address with the statement for carrying out reconciliation procedure of pricing and ensuring proper preparation of the documents and materials necessary for its carrying out, has the right to address to GFS with the offer of rather preliminary consideration of question of carrying out reconciliation procedure of pricing (further - preliminary consideration).

At the same time the taxpayer sends GFS the letter in any form in which are surely specified:

address purpose (preliminary consideration of GFS of question of carrying out reconciliation procedure of pricing);

the name of the taxpayer, code according to EGRPOU, the address for correspondence (mail, electronic);

information on economic activity of the parties of controlled transactions with indication of the name of the states which residents they are;

data on the connected persons for their identification (the structure of group of the connected persons and criteria of coherence provided by subitem 14.1.159 of Item 14.1 of article 14 of the Tax Code of Ukraine);

the facts and circumstances of controlled transactions which can be subject of preliminary approval of pricing;

methods or combination of methods of determination of compliance of terms of controlled transactions to the principle of "outstretched arm" which are offered for carrying out reconciliation procedure of pricing;

nature of the agreement which is offered to be concluded on the results of the procedure of approval of pricing;

data of the authorized persons of the taxpayer participating in consideration;

to provide other data which the taxpayer considers necessary for discussion during preliminary consideration.

6. About date, time and the venue of preliminary consideration of GFS notifies the taxpayer within ten working days from receipt date of the letter with the offer on preliminary consideration, but not later than three working days before its carrying out.

7. During preliminary consideration of GFS and the taxpayer can be considered, in particular:

the parties and participants who can be involved in pricing reconciliation procedures;

the parties of controlled transactions and the state which residents they are, in case of consideration of possibility of the conclusion of the agreement two-or multilateral nature;

market conditions in which controlled transactions are performed (tendencies, business strategy, competitive environment);

the facts and circumstances of controlled transactions which can be pricing reconciliation procedure subject;

the offered methods or combination of methods of determination of compliance of conditions of controlled transactions to the principle of "outstretched arm";

probable changes of economic conditions which will influence the relations which can be regulated by the agreement;

nature of the agreement which is offered to be concluded on the results of the procedure of approval of pricing;

the accounting periods (years) to which validity can be extended (the accounting period in which such agreement and/or the accounting periods preceding entry into force is signed);

duration of the agreement and possibility of its prolongation;

information, documents and materials necessary for carrying out reconciliation procedure of pricing;

use, disclosure and information security, the pricing reconciliation procedure received during;

the expected pricing reconciliation procedure duration;

schedule of holding additional meetings as necessary.

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