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Advance pricing agreements

Availability and eligibility

Are advance pricing agreements with the tax authorities in your jurisdiction possible? If so, what form do they typically take (eg, unilateral, bilateral or multilateral) and what enterprises and transactions can they cover?

Advance pricing agreements (APAs) are available for large taxpayers only. Taxpayers are considered ‘large’ if:

  • their overall revenue, from all types of activity in the four most recent tax (reporting) quarters, exceeds the equivalent of €50 million; or
  • if the total amount of taxes, fees and payments to Ukraine’s state budget for the same period exceeds the equivalent of €1 million based on the average official exchange rate of the National Bank of Ukraine for the same period and provided that the sum of such taxes, fees and charges less customs payments exceeds the equivalent of €500,000.

APAs are concluded for a limited period (up to five years) between the large taxpayer and the State Fiscal Service (SFS), with the possible participation of fiscal authorities from other states. An APA can set out special pricing criteria and select the most appropriate transfer pricing methodology tools for determining whether future controlled transactions of the taxpayer are at arm’s length. Such arrangements may be either:

  • unilateral (ie, between the taxpayer and the SFS);
  • bilateral (ie, between the taxpayer, the SFS and the fiscal authority of the country of the non-resident party in the controlled transaction); or
  • multilateral (ie, with the participation of several fiscal authorities of the countries of the non-resident parties to the controlled transaction).

An effective double taxation treaty with the countries of residence of the parties to the transaction is a prerequisite for engaging the fiscal authorities of the respective countries in an APA procedure.

In addition, from 2018 an APA can apply retroactively. There are no limitations with respect to list of controlled transactions that may be subject to the APA procedure; however, no APAs appear to have been signed to date.

Rules and procedures

What rules and procedures apply to advance pricing agreements?

The requirements and procedures regarding the application for an APA are outlined in detail in the Cabinet of Ministers of Ukraine Act 504.

Prior to the APA process, a taxpayer may submit a request for preliminary examination of the relevant transaction to the SFS, which has 60 days to confirm whether it would be reasonable to begin the APA procedure.

To begin the APA procedure, a taxpayer must file a petition with the SFS, which must include the following documentation:

  • a copy of the taxpayer's organisational documents;
  • the taxpayer's accounting and financial reporting documents for the preceding three years;
  • a description of any ongoing tax disputes involving the transaction;
  • a certificate of tax residence of the relevant foreign parties to the controlled transaction;
  • a description of how an applicable tax treaty between Ukraine and the relevant foreign jurisdiction would affect the transaction;
  • an analysis of the possible influence of the APA on the tax liabilities of the parties to the controlled transaction;
  • copies of any documents submitted to the relevant foreign tax authority for an APA by the taxpayer or the counterparty to the transaction;
  • copies of documents granting authority to the taxpayer's representative to take part in the price coordination procedure;
  • transfer pricing documentation in respect of such transactions; and
  • any other documentation/information deemed relevant by the taxpayer or requested by the SFS.

Once all required documentation has been submitted and reviewed, the SFS will inform the taxpayer in writing as to whether it is ready to move forward and conclude an APA. If the SFS rejects the petition, the taxpayer may file an appeal within 15 days of the decision. The SFS must respond to the appeal with its decision within 30 days.

Information provided to the tax authorities during the APA process cannot be used as a reason for a tax audit.


How long does it typically take to conclude an advance pricing agreement?

To date, no Ukrainian taxpayer has concluded an APA.

What is the typical duration of an advance pricing agreement?

To date, no Ukrainian taxpayer has concluded an APA.


What fees apply to requests for advance pricing agreements?

There is no government fee for consideration of requests for APAs.

Special considerations

Are there any special considerations or issues specific to your jurisdiction that parties should bear in mind when seeking to conclude an advance pricing agreement (including any particular advantages and disadvantages)?

The main advantage of concluding an APA is that if it is complied with, the SFS has no authority to assess additional tax liabilities, late payment interest or penalties with regard to controlled transactions covered by the APA.

However, if a taxpayer fails to comply with an APA’s terms and conditions, the APA becomes void from the effective date. In this case, the tax authorities may charge additional tax liabilities and apply financial penalties with regard to controlled transactions that do not meet the arm's length principle.

Further, Ukrainian legislature prescribes two situations in case of legislative changes in future:

  • a signed APA should not be amended if the laws change with regard to the regulation of relationships that arise out of an APA, or the amendment or termination thereof or if a taxpayer no longer qualifies as ‘large’; and
  • a signed APA may be amended if the legal provisions that affect a taxpayer’s activities or set out the criteria for justifying the arm’s length principle. If any party disagrees with the proposed amendments, the APA will be terminated.

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