Open AccessImplementation of international recommendations for application of a three-tiered approach to transfer pricing documentation in Ukraine
Author(s) -
Ljudmyla LOVINSKA,
Yana OLIYNYK,
Maria Kucheriava
Publication year - 2020
Publication title -
fìnansi ukraïni
Language(s) - English
Resource type - Journals
eISSN - 2522-4662
pISSN - 2305-7645
DOI - 10.33763/finukr2020.09.095
Subject(s) - documentation , transfer pricing , base erosion and profit shifting , action plan , legislation , business , context (archaeology) , accounting , public economics , double taxation , economics , computer science , multinational corporation , political science , finance , tax avoidance , law , paleontology , management , biology , programming language
The article considers challenges and consequences of introducing a three-level model of transfer pricing documentation in Ukraine. The purpose of study is to assess the state of regulatory support for implementation of Step 13 of the BEPS Action Plan and to identify institutional measures for further implementation of three-tiered documentation on transfer pricing, taking into account the requirements of the Organization for Economic Co-operation and Development (OECD). The authors analyzed the state of accession of countries all over the world to the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, in order to counteract the erosion of the tax base and the withdrawal of profits from taxation of the OECD, ratified by the Law of Ukraine dated 28.02.2019 No 2692-VIII. Analysis of national legislation to take into account the requirements of the BEPS Action Plan and the experience of cooperation of the Government of Ukraine with international tax organizations allowed to scientifically substantiate the directions of improvement of national regulations on tax issues and to determine methodology for application of innovative reporting form in the context of further implementation of BEPS Action Plan. It is identified that implementation of a three-tiered reporting model for transfer pricing in Ukraine is at the beginning of the development, in particular legislation. The authors emphasize the importance of counteracting information asymmetry by ensuring the unification of terminology and quality of the database for innovative reporting preparation, in particular, for global documentation on transfer pricing, transfer pricing documentation and Country-by-Country reporting of multinational entities. Within the study it was proved that the organization of the reporting process at all levels of the Three-Level Model of transfer pricing documentation (hereinafter the Three-Level Model) should be aimed at preparing reports that contain reliable information with the maximum exclusion of duplication.