Ukraine: Update of list with low-tax countries

Published on March 15, 2018

On March 07, 2018, the changes to the list of low-tax countries became effective. Five countries, namely Estonia, Latvia, Malta, Georgia and Hungary were deleted from the list.

The list of low-tax countries serves transfer pricing purposes and application of special tax anti-avoidance restrictions. This list has been expanded at the end of 2017 by 19 new countries and territorites, including, among others, Estonia, Latvia, Malta, Georgia and Hungary.

The deletion of the above-mentioned countries from the list means that the tax anti-avoidance restrictions do not apply to transactions of Ukrainian companies with counterparties from these countries and these transactions are no longer subject to transfer pricing control in 2018, unless there are other reasons for this (e.g. the relevant transactions are intra-group transactions between Ukrainian company and foreign related company).

It is also important to note that the transactions of Ukrainian companies with counterparties from these countries in the period from 1 January 2018 until 6 March 2018 may constitute controlled transactions, if their value exceeds UAH 10 Million and taxpayer's annual income in 2018 exceeds UAH 150 Million. In such case, these transactions must be properly documented and reported in the report on controlled transactions for the year 2018.