Transfer Pricing Requests and Audits: Key Takeaways from PwC Business Meeting

Key Insights:

• Strategic Response. A well-prepared response to a tax authority request can significantly reduce or even eliminate the risk of an audit, steering the dialogue in a constructive direction and mitigating future risks.

• Responsibility for Non-Disclosure. Although legislation does not explicitly equate failure to provide additional information with failure to submit TP documentation, tax authorities impose penalties in both cases. Court practice on this matter is yet to be established.

• Clear Control Algorithm. Judicial practice confirms that tax authorities must follow a strict control procedure, initiating audits only after receiving and reviewing TP documentation and any supplementary information.

• Regulated Actions. Tax authorities may issue information requests only when specific legal grounds exist. Their actions are strictly regulated, with the Procedure for Monitoring Controlled Transactions serving as a roadmap.

• Consequences of Ignoring Requests. Ignoring a request is not merely withholding information — it triggers further actions by tax authorities, potentially leading to unscheduled audits and penalties.

• Alternative mechanisms for addressing matters with tax authorities. An Advance Pricing Agreement (APA), a Mutual Agreement Procedure (MAP), and corresponding adjustments are instruments that can help taxpayers effectively protect their interests in disputes with tax authorities.

• PwC’s Structured Approach. We provide legal assessments of requests, evaluate and minimise risks, and prepare responses.

• Client Protection. Our teams help clients build a strong defence strategy at every stage of interaction with tax authorities, leveraging current court practice and deep legislative expertise.

• Audit Simulation. Upon request, we conduct TP audit rehearsals to identify risks and provide recommendations for their mitigation.

Event Speakers:

• Olga Trifonova — Partner, Head of TP Practice

• Kateryna Kislitsyna — Director, TP Practice

• Zhanna Brazhnyk — Director, Head of Dispute Resolution Practice

• Yana Bazia — Senior Manager, Lawyer, Dispute Resolution Practice

• Valentyn Babenko — Manager, TP Practice

• Mariia Natolochna — Manager, TP Practice

We sincerely thank all participants and speakers for their active engagement and insightful discussions.

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