- Updated
- October 2025
- Sections
- 15
- Questions
- 38
Key Facts
Core Framework
Tax Code of Ukraine Article 39, clause 39.1
Article 39, clause 39.1 of the Tax Code of Ukraine states that: “The taxpayer that participates in a controlled transaction must determine the amount of his taxable profit in accordance with the arm’s length principle. The amount of taxable profit received by a taxpayer that participates in one or more controlled transactions is considered to be in accordance with the arm’s length principle if the terms of those transactions do not differ from those applied between unrelated parties in comparable uncontrolled transactions. If the conditions in one or more controlled transactions do not comply with the arm’s length principle, the profit that would be accrued to the taxpayer in a controlled transaction that complies with this principle is included in the taxable income of the taxpayer. Determining whether the conditions of the controlled transaction comply with the arm’s length principle shall be performed according to the methods specified in sub-clause 39.3 of this Article, in order to verify the correctness, completeness of accrual and payment of corporate profit tax.”
The OECD Transfer Pricing Guidelines are not incorporated in Ukrainian legislation, however, the TPG are considered as internationally accepted guidance providing explanation and clarification of the (application of the) arm’s length principle.
Tax Code of Ukraine Article 39, clause 39.2, sub-clause 39.2.2; Tax Code of Ukraine Article 39, clause 39.3, sub-clause 39.3.2
The Tax Code of Ukraine contains the provisions on comparability analysis, which largely follow the guidance of the OECD TPG.
Tax Code of Ukraine Article 39, clause 39.2, sub-clause 39.2.2, sub-clause 39.2.2.2
Due to the lack or insufficiency of information on uncontrolled transactions, the financial information of legal entities engaged in activities comparable to the controlled transaction may be used for the determination of profitability indicators in case that such legal entities do not perform transactions with related parties. Preference for domestic comparables follows from the Tax Code provisions on comparability. Taxpayers need to prove that foreign comparables are more reliable than local comparables.
Tax Code of Ukraine Article 39, clause 39.5, sub-clause 39.5.3, sub-clause 39.5.3.3
According to the provisions of the Tax Code of Ukraine, the tax authority has no right to use information that is not publicly available (in particular, information with limited access or information which is available only to public authorities). The abovementioned does not apply to information obtained by tax authorities during the audit on the taxpayer’s compliance with the arm’s length principle according to the sub-clause 39.5.2.13 of the Tax Code of Ukraine.
Tax Code of Ukraine Article 39, clause 39.3, sub-clause 39.3.2, sub-clause 39.3.2.2; Tax Code of Ukraine Article 39, clause 39.3, sub-clause 39.3.2, sub-clause 39.3.2.3
The Tax Code of Ukraine mandates the use of price (profitability) range (interquartile range) to define the compliance of the controlled transactions with the arm’s length principle. The procedure of the arm’s length principle determination is settled by the Resolution of the Cabinet of Ministers of Ukraine No 381 dated 04.06.2015 «On approval of the Procedure for calculating the price (profitability) range and the median of such range for transfer pricing purposes».
Documentation
Tax Code of Ukraine Article 39, clause 39.4
According to the provisions of the Tax Code of Ukraine, taxpayers, which carried out controlled transactions in the reporting year, are required to file a Report on controlled transactions and a Notification on participation in the International group of companies (only for MNE participants) by October 1 of the year following the reporting year.
Tax Code of Ukraine Article 39, clause 39.4
According to the provisions of the Tax Code of Ukraine, taxpayers, which carried out controlled transactions in the reporting year, are required to file a Report on controlled transactions and a Notification on participation in the International group of companies (only for MNE participants) by October 1 of the year following the reporting year.
Tax Code of Ukraine Article 39, clause 39.4
According to the provisions of the Tax Code of Ukraine, taxpayers, which carried out controlled transactions in the reporting year, are required to file a Report on controlled transactions and a Notification on participation in the International group of companies (only for MNE participants) by October 1 of the year following the reporting year.
Tax Code of Ukraine Article 120, clauses 120.3-120.6
The Tax Code of Ukraine stipulates several types of transfer pricing penalties, in particular penalties in case of failure of filing, incomplete filing, inaccurate filing and late filing of TP reports and documentation.
TP Methods
- CUP
- Resale Price
- Cost Plus
- TNMM
- Profit Split
- Other
Selection: Hierarchy of methods
Dispute Resolution
Tax Code of Ukraine Article 39, clause 39.6; Resolution of the Cabinet of Ministers of Ukraine No. 1114; Tax Code of Ukraine Article 1081; Order of the Ministry of Finance of Ukraine No. 820
Advance Pricing Agreements (APA): Large taxpayers can apply for unilateral, bilateral, or multilateral APAs. Valid for 5 years and can be prolonged for 5 more. Mutual Agreement Procedures (MAP): Taxpayers can apply if actions lead to taxation inconsistent with Double Tax Treaties.
Tax Code of Ukraine Article 39, clause 39.6; Resolution of the Cabinet of Ministers of Ukraine No. 1114; Tax Code of Ukraine Article 1081; Order of the Ministry of Finance of Ukraine No. 820
Advance Pricing Agreements (APA): Large taxpayers can apply for unilateral, bilateral, or multilateral APAs. Valid for 5 years and can be prolonged for 5 more. Mutual Agreement Procedures (MAP): Taxpayers can apply if actions lead to taxation inconsistent with Double Tax Treaties.
Simplifications
Ukraine does not provide for any safe harbours or other simplification measures.
Ukraine's domestic transfer pricing framework does not allow the application of the simplified and streamlined approach for baseline marketing and distribution activities.
Special Topics
Tax Code of Ukraine Article 39, clause 39.3, sub-clause 39.3.10
The Tax Code of Ukraine provides an opportunity to use valuation methodology based on discounted cash flow for controlled transactions with intangibles, other intellectual property and business restructuring transactions in case of lack of comparable uncontrolled transactions within the application of transfer pricing methods.
Ukraine's domestic transfer pricing framework does not contain guidance specific to hard-to-value intangibles (HTVI).
Ukrainian domestic legislation does not contain specific guidance or special measures regarding intra-group services transactions and tend to rely on the OECD TPG. Sub-clause 39.4.7 of the Tax Code of Ukraine contains the requirements for Master File, including an obligation to provide a list and brief description of important service arrangements between members of the MNE group...
Ukrainian domestic legislation does not contain specific guidance or special measures regarding financial transactions and tend to rely on the OECD TPG.
Full OECD Questionnaire
Legal ReferenceTax Code of Ukraine Article 39, clause 39.1
Article 39, clause 39.1 of the Tax Code of Ukraine states that: “The taxpayer that participates in a controlled transaction must determine the amount of his taxable profit in accordance with the arm’s length principle. The amount of taxable profit received by a taxpayer that participates in one or more controlled transactions is considered to be in accordance with the arm’s length principle if the terms of those transactions do not differ from those applied between unrelated parties in comparable uncontrolled transactions. If the conditions in one or more controlled transactions do not comply with the arm’s length principle, the profit that would be accrued to the taxpayer in a controlled transaction that complies with this principle is included in the taxable income of the taxpayer. Determining whether the conditions of the controlled transaction comply with the arm’s length principle shall be performed according to the methods specified in sub-clause 39.3 of this Article, in order to verify the correctness, completeness of accrual and payment of corporate profit tax.”
The OECD Transfer Pricing Guidelines are not incorporated in Ukrainian legislation, however, the TPG are considered as internationally accepted guidance providing explanation and clarification of the (application of the) arm’s length principle.
Legal ReferenceTax Code of Ukraine Article 14, clause 14.1, sub-clause 14.1.159
Related parties are legal entities and / or individuals and / or formations without legal entity status, the relationship between which may affect the conditions or economic results of their activities or the activities of the persons they represent, taking into account the following criteria: a) for the legal entities: one legal entity directly and / or indirectly (through related parties) owns the corporate rights of another legal entity in the amount of 25% or more... the same legal entity or individual directly and / or indirectly owns corporate rights in each legal entity in the amount of 25% or more; the same legal entity or individual makes decisions on the appointment (election) of sole executive body of each legal entity; the same legal entity or individual makes a decision on the appointment (election) of 50% or more of the collegial executive body or supervisory board of each legal entity; at least 50% of the collegial executive body and / or supervisory board of each legal entity shall be the same individuals; sole executive bodies of each legal entity are appointed (elected) by the decision of the same body (owner or his authorized body); a legal entity has the authority to appoint (elect) the sole executive body of another legal entity or to appoint (elect) 50% or more of its collegial executive body or supervisory board; the ultimate beneficial owner (controller) of such legal entities is the same individual; the powers of the sole executive body of such legal entities are exercised by the same body; the amount of all loans, repayable financial assistance from one legal entity... in relation to another legal entity, exceeds the amount of equity more than 3.5 times (for financial institutions and companies engaged in leasing activities only - more than 10 times)... income of a resident legal entity from the sale of products... to a separate non-resident legal entity... during a calendar year amounts to 75 percent or more of the income of such resident legal entity... provided that such income amounts to 50 percent or more of the total income... the cost of products... purchased by a resident legal entity from another separate non-resident legal entity... during a calendar year is 75 percent or more of the cost of products... purchased by such entity from all non-residents, provided that the amount of such purchase transactions is 50 percent or more of the total cost... b) for an individual and a legal entity: an individual directly and / or indirectly owns corporate rights of a legal entity in the amount of 25% or more; an individual has the right to appoint (elect) the sole executive body... or at least 50% of its collegial executive body or supervisory board; an individual exercises the powers of a sole executive body... an individual is the ultimate beneficial owner (controller)... the amount of all loans... from an individual provided to a legal entity... exceeds the amount of equity more than 3.5 times... c) for individuals - husband (wife), parents, children, full-siblings and partial-siblings, guardian, trustee, child under guardianship or custody.
Legal ReferenceTax Code of Ukraine Article 39, clause 39.3
There is also an opportunity to use valuation methodology based on discounted cash flow for controlled transactions with intangibles, other intellectual property and business restructuring transactions in case of lack of comparable uncontrolled transactions within the application of transfer pricing methods.
- CUP (provided)
- Resale Price (provided)
- Cost Plus (provided)
- TNMM (provided)
- Profit Split (provided)
- Other (provided)
Legal ReferenceTax Code of Ukraine Article 39, clause 39.3, sub-clause 39.3.2, sub-clause 39.3.2.1
The compliance of the controlled transactions with the arm’s length principle is confirmed by applying the most appropriate transfer pricing method within the abovementioned hierarchy of methods due to the facts and circumstances of the case, unless the Tax Code of Ukraine determines the requirements for the application of specific transfer pricing method for a certain type of controlled transactions (e.g. application of the comparable uncontrolled price (CUP) method for commodity transactions).
- Hierarchy of methods (selected)
- Most appropriate method (selected)
Legal ReferenceTax Code of Ukraine Article 39, clause 39.3, sub-clause 39.3.3, sub-clauses 39.3.3.4-39.3.3.8
The Tax Code of Ukraine mandates the use of comparable uncontrolled price (CUP) method for commodity transactions. The concept of commodity transactions covers controlled transactions with commodities included to the List, which is settled by the Resolution of the Cabinet of Ministers of Ukraine. The taxpayer may use the recommended (non-exhaustive) List of sources of information for obtaining commodity quoted prices to analyse the compliance of the commodity transactions with the arm’s length principle. In case of controlled commodity transactions the taxpayer shall apply the provisions of the procedure for determining the compliance of the terms of a controlled commodity transaction with the arm's length principle, which is settled by the Order of the Ministry of Finance of Ukraine.
Legal ReferenceTax Code of Ukraine Article 39, clause 39.2, sub-clause 39.2.2; Tax Code of Ukraine Article 39, clause 39.3, sub-clause 39.3.2
The Tax Code of Ukraine contains the provisions on comparability analysis, which largely follow the guidance of the OECD TPG.
Legal ReferenceTax Code of Ukraine Article 39, clause 39.2, sub-clause 39.2.2, sub-clause 39.2.2.2
Due to the lack or insufficiency of information on uncontrolled transactions, the financial information of legal entities engaged in activities comparable to the controlled transaction may be used for the determination of profitability indicators in case that such legal entities do not perform transactions with related parties. Preference for domestic comparables follows from the Tax Code provisions on comparability. Taxpayers need to prove that foreign comparables are more reliable than local comparables.
Legal ReferenceTax Code of Ukraine Article 39, clause 39.5, sub-clause 39.5.3, sub-clause 39.5.3.3
According to the provisions of the Tax Code of Ukraine, the tax authority has no right to use information that is not publicly available (in particular, information with limited access or information which is available only to public authorities). The abovementioned does not apply to information obtained by tax authorities during the audit on the taxpayer’s compliance with the arm’s length principle according to the sub-clause 39.5.2.13 of the Tax Code of Ukraine.
Legal ReferenceTax Code of Ukraine Article 39, clause 39.3, sub-clause 39.3.2, sub-clause 39.3.2.2; Tax Code of Ukraine Article 39, clause 39.3, sub-clause 39.3.2, sub-clause 39.3.2.3
The Tax Code of Ukraine mandates the use of price (profitability) range (interquartile range) to define the compliance of the controlled transactions with the arm’s length principle. The procedure of the arm’s length principle determination is settled by the Resolution of the Cabinet of Ministers of Ukraine No 381 dated 04.06.2015 «On approval of the Procedure for calculating the price (profitability) range and the median of such range for transfer pricing purposes».
Legal ReferenceTax Code of Ukraine Article 39, clause 39.2, sub-clause 39.2.2, sub-clause 39.2.2.1
According to the provisions of the Tax Code of Ukraine, the controlled transactions are recognized as comparable to the uncontrolled transactions in case of absence of significant differences between them. Such differences may be mitigated with adjustments in order to avoid the impact of such differences on comparability.
Legal ReferenceTax Code of Ukraine Article 39, clause 39.3, sub-clause 39.3.10
The Tax Code of Ukraine provides an opportunity to use valuation methodology based on discounted cash flow for controlled transactions with intangibles, other intellectual property and business restructuring transactions in case of lack of comparable uncontrolled transactions within the application of transfer pricing methods.
Legal ReferenceTax Code of Ukraine Article 140, clause 140.5, sub-clause 140.5.6; Tax Code of Ukraine Article 140, clause 140.5, sub-clause 140.5.7
Yes, there are other rules outside the transfer pricing framework relevant for the pricing of controlled transactions involving intangibles.
Ukraine's domestic transfer pricing framework does not contain guidance specific to hard-to-value intangibles (HTVI).
Legal ReferenceTax Code of Ukraine Article 39, clause 39.6
The Tax Code of Ukraine provides an opportunity for large taxpayer* to apply for unilateral, bilateral or multilateral advance pricing agreements for controlled transactions. *According to the provisions of sub-clause 14.1.24 of the Tax Code of Ukraine, the large taxpayer is a legal entity or permanent establishment of non-resident entity in Ukraine, whose income from all activities for the last consecutive tax (reporting) quarters exceeds the equivalent of EUR 50 million... or the total amount of taxes paid to the State Budget of Ukraine for the same period exceeds the equivalent of EUR 1.5 million...
Specialists of the State Tax Service of Ukraine receive specialized trainings regarding the international taxation and transfer pricing issues.
Ukrainian domestic legislation does not contain specific guidance or special measures regarding intra-group services transactions and tend to rely on the OECD TPG. Sub-clause 39.4.7 of the Tax Code of Ukraine contains the requirements for Master File, including an obligation to provide a list and brief description of important service arrangements between members of the MNE group...
Ukrainian domestic legislation does not contain specific provisions on simplified approach for low value-adding intra-group services and tend to rely on the OECD TPG.
No other rules outside the transfer pricing framework for pricing intragroup services.
Ukrainian domestic legislation does not contain specific guidance or special measures regarding financial transactions and tend to rely on the OECD TPG.
Legal ReferenceTax Code of Ukraine Article 140, clause 140.2
The Tax Code of Ukraine contains provisions on thin capitalization rules. Under the thin capitalization rules, expenses of resident entities in the current tax period include the amount of interest paid on loans, which does not exceed 30% of profits, and expenses on repayment of interests. It should be noted that for the purposes of thin capitalization rules application the amount of taxpayer’s liabilities with a non-resident shall exceed the equity ratio by more than 3.5 times. However, if the amount of interest expenses within a controlled transaction exceeds the amount determined in accordance with the arm’s length principle, then thin capitalization rules will apply only to the amount of interest that corresponds with the arm’s length principle.
Ukrainian domestic legislation does not contain specific guidance or special measures regarding cost contribution agreements and tend to rely on the OECD TPG. Sub-clause 39.4.7 of the Tax Code of Ukraine contains the requirements for Master File, including a list of important agreements among identified associated enterprises related to intangibles, including cost contribution arrangements, principal research service agreements and license agreements.
Legal ReferenceTax Code of Ukraine Article 39, clause 39.4
According to the provisions of the Tax Code of Ukraine, taxpayers, which carried out controlled transactions in the reporting year, are required to file a Report on controlled transactions and a Notification on participation in the International group of companies (only for MNE participants) by October 1 of the year following the reporting year.
- Master file consistent with Annex I to Chapter V of the TPG (selected)
- Local file consistent with Annex II to Chapter V of the TPG (selected)
- Country-by-country report consistent with Annex III to Chapter V of the TPG (selected)
- Specific transfer pricing returns (separate or annexed to the tax return) (selected)
- Other (specify): (selected)
Legal ReferenceTax Code of Ukraine Article 39, clause 39.4
Transfer pricing documentation: At the request of the Central executive body, taxpayers shall submit TPD within 30 calendar days from the request receipt date. The request shall be sent no earlier than October 1 of the year following the calendar year of the transaction. Master file: Request can be sent if total consolidated income of the MNE group is equal to or exceeds EUR 50 million. Must be submitted within 90 calendar days from the request receipt. Country-by-Country Reporting: Filed if total consolidated income exceeds EUR 750 million and certain conditions are met. Filed within twelve months after the end of the financial year.
Legal ReferenceTax Code of Ukraine Article 120, clauses 120.3-120.6
The Tax Code of Ukraine stipulates several types of transfer pricing penalties, in particular penalties in case of failure of filing, incomplete filing, inaccurate filing and late filing of TP reports and documentation.
Legal ReferenceTax Code of Ukraine Article 39, clause 39.2, sub-clause 39.2.1; Tax Code of Ukraine Article 39, clause 39.4, sub-clauses 39.4.3-39.4.6; Tax Code of Ukraine Article 39, clause 39.4, sub-clause 39.4.7; Tax Code of Ukraine Article 39, clause 39.4, sub-clauses 39.4.10-39.4.102
TPD is prepared for controlled transactions if: the annual income of the taxpayer exceeds UAH 150 million (net of indirect taxes); and the volume of business transactions with each counterparty exceeds UAH 10 million. Transactions between a non-resident and its PE in Ukraine are controlled if volume exceeds UAH 10 million. If these conditions are not met, the taxpayer is not obliged to prepare TPD. Master file: Not required if total consolidated income of MNE group is below EUR 50 million. CbCR: Not required if total consolidated revenue of MNE group is below EUR 750 million.
Legal ReferenceTax Code of Ukraine Article 39, clause 39.6; Resolution of the Cabinet of Ministers of Ukraine No. 1114; Tax Code of Ukraine Article 1081; Order of the Ministry of Finance of Ukraine No. 820
Advance Pricing Agreements (APA): Large taxpayers can apply for unilateral, bilateral, or multilateral APAs. Valid for 5 years and can be prolonged for 5 more. Mutual Agreement Procedures (MAP): Taxpayers can apply if actions lead to taxation inconsistent with Double Tax Treaties.
- Rulings (not selected)
- Enhanced engagement or cooperative compliance programmes (not selected)
- Advance Pricing Agreements (APA) (selected)
- International Compliance Assurance Programme (ICAP) (not selected)
- Mutual Agreement Procedures (selected)
- Other (please specify): (not selected)
Ukraine's domestic transfer pricing framework does not allow the application of the simplified and streamlined approach for baseline marketing and distribution activities.
Ukraine respects the outcome of the application of the simplified and streamlined approach by a covered jurisdiction.
Ukraine does not provide for any safe harbours or other simplification measures.
Legal ReferenceTax Code of Ukraine Article 39, clause 39.5, sub-clause 39.5.5
The Tax Code of Ukraine provides an opportunity for taxpayer to apply for corresponding adjustment on the basis of the results of tax liabilities adjustment of the other party to the controlled transaction and the provisions of the relevant Double Tax Treaty of Ukraine.
Legal ReferenceTax Code of Ukraine Article 39, clause 39.5, sub-clause 39.5.4
According to the provisions of the Tax Code of Ukraine, if the taxpayer applies the conditions in the controlled transactions that do not comply with the arm’s length principle... the taxpayer has the right to adjust the price... provided that this does not lead to a reduction in the amount of tax payable to the budget... Self-adjustment is an adjustment by the taxpayer of the price of a controlled transaction, as a result of which the calculated price corresponds to the arm’s length principle, even if such price differs from the actual price...
Legal ReferenceTax Code of Ukraine Article 14, clause 14.1, sub-clause 14.1.49; Tax Code of Ukraine Article 141, clause 141.4, sub-clause 141.4.2
The concept of constructive (deemed) dividends is used for payment, income or compensation exceeding the amount calculated under the arm’s length principle.
Legal ReferenceTax Code of Ukraine Article 14, clause 14.1, sub-clause 14.1.193; Tax Code of Ukraine Article 141, clause 141.4, sub-clause 141.4.7; Double Tax Treaties of Ukraine
The majority of the Double Tax Treaties of Ukraine contains the PE provisions of the pre-2010 OECD approach. According to the provisions of the Tax Code of Ukraine, the profit of a permanent establishment shall be considered as the profit of an independent enterprise for taxation purposes. The profit of a permanent establishment shall comply with the arm’s length principle.
- Article 7 as it read before 2010. (not selected)
- Article 7 as it reads after 2010. (not selected)
- Other (please provide additional details) (selected)
No, Ukraine does not apply the authorized OECD approach (AOA) for tax treaties containing Article 7 as it read before 2010.
There is no specific guidance for the attribution of profits to permanent establishments of non-resident entities.
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