Ukraine Publishes Draft Tax Law to Implement BEPS Proposals

Ukraine Publishes Draft Tax Law to Implement BEPS Proposals

Ukraine has published a draft law aimed at implementing some of key measures proposed under the OECD’s base erosion and profit shifting (BEPS) project.

The draft Law of Ukraine On Amendments to the Tax Code of Ukraine for the Purpose of Implementing the Action Plan on Base Erosion and Profit Shifting was developed by a working group led by the Finance Ministry, with the participation of the National Bank of Ukraine and international tax experts.

The draft Law is aimed at implementing the following BEPS Action Items that are considered most critical for Ukraine:

  • BEPS Action 3, on controlled foreign corporation rules;
  • BEPS Action 4, on interest deductions;
  • BEPS Action 6, on preventing abuse of tax treaties;
  • BEPS Action 7, on preventing the artificial avoidance of permanent establishment status;
  • BEPS Actions 8–10, on elaboration of controls over transfer pricing; and
  • BEPS Action 13, on transfer pricing documentation.

The BEPS project was launched by the OECD in 2013 to ensure that profits are taxed where economic activities generating the profits are performed and where value is created. Ukraine signed the BEPS Multilateral Instrument in July 2018.

Ukraine is also a member of the BEPS Inclusive Framework, which allows interested countries and jurisdictions to work with the OECD and Group of Twenty nations on monitoring the implementation of the BEPS proposals.

See draft Law of Ukraine On Amendments to the Tax Code of Ukraine for the Purpose of Implementing the Action Plan on Base Erosion and Profit Shifting