Round table on the development of the Procedure for establishing the compliance of the conditions of controlled transactions with raw materials under the arm’s length principle.
The Ministry of Finance of Ukraine, international experts, and the EU4PFM Program have joined their forces to develop a Procedure for establishing the compliance of the conditions of controlled transactions with raw materials under the arm’s length principle.
On September 23rd within the round table framework, representatives of the Ministry of Finance of Ukraine, the Committee of the Verkhovna Rada of Ukraine on Tax and Customs Policy, the Supreme Court Ukraine, the State Tax Service of Ukraine, Organization for Economic Co-operation and Development (OECD), Reform Support Team of the Ministry of Finance, GIZ project and EU4PFM Programme in Ukraine discussed comments and suggestions from the expert and business community on the draft Procedure.
“Discussion of the draft Procedure for establishing compliance with the conditions of controlled operations with raw materials under the arm’s length principle is an important step towards the practical implementation of OECD best practices with raw materials, which outline a significant share in the structure of Ukrainian exports.
The procedure for establishing compliance with the conditions of controlled transactions with raw materials under the arm’s length principle demonstrates a very important principle- a fair approach. And Ukraine, as an exporter of raw materials, desperately needs this document. As of today, we do not have real expected indicators of how much the situation on the raw materials market will improve after the Procedure enforces. But it is obvious that the methodology, approach, and rules that we have proposed and developed together with you will have a positive effect on Ukraine in general and for its budget, in particular. Taxation must comply with generally accepted principles – fair competition, transparency, and equality of taxpayers. And the document we are discussing today is no longer a sign, but the real action in this direction. The EU4PFM project fully supports this initiative. We hope that the business will also support our common work “,- stated Paulius Majauskas, EU4PFM international key expert on tax reform in Ukraine.
At the beginning of the meeting, @State Tax Service of Ukraine presented statistics for 2019 on trade in raw materials, the volume of trade through intermediary countries, the volume of declaring raw materials in controlled transactions, and the results of inspections of controlled transactions with raw materials in Ukraine.
In particular, the following issues were discussed during the partnership meeting:
• an updated approach to the arms’ length principle in transactions with raw materials;
• basic principles of application of the method of comparative uncontrolled price to operations with raw materials;
• practical aspects of determining the comparability of the controlled operation, making adjustments to comparability;
• practical features of application of requirements of separate Procedures. During the event, experts and business representatives had the opportunity to personally ask questions and voice their position on the proposed provisions of the draft Procedure and practical aspects of its application.
Let’s implement change together!