Transfer pricing: Why the right time to start is now

The idea is simple: effective TP preparation starts long before the deadline.

The level of tax scrutiny in Ukraine has been increasing, with 170+ audits conducted as of April 2026 and 80+ more underway. Additional assessments and adjustments remain significant, and the number of requests from tax authorities has been increasing, driven by automation and the Big Data TP tool.

What is in focus for tax authorities today?

Today, TP tax requests mostly focus on areas such as non-compliant or incomplete TP reports, supporting compliance with the arm's length principle, substantiating profit margins and proving the business rationale. 

At the same time, the court practice demonstrates that failing to provide documentation results in penalties, formal reports alone are not enough, and the body of evidence is needed. 

We also specifically touched upon anticipated changes in legislation, particularly those coming into effect from 2028.

In practice, TP matters are often treated as an afterthought. This enhances risks, puts extra pressure on teams and may result in preparation of reports for multiple periods at a time. Considering that 15 to 30 days are typically allowed to respond to any requests from tax authorities, this creates significant burden for businesses.

TP is not a one-off task; instead, it’s a systematic process comprising:

• analysis of transactions and business models,

• periodic updates to TP policies,

• preparation of comprehensive documentation,

• ensuring compliance with the arm’s length principle.

• being prepared to cooperate with tax authorities.

By integrating these elements into their business processes, businesses ensure consistency, transparency and readiness for TP requests and audits. 

At the same time, you should keep in mind: whilst an early start can improve the quality of your preparation, it would not make up for lacking or inadequate TP policies. 

How to strengthen TP approaches?

TP has increasingly become a strategic area of tax risk management. However, an effective strategy requires practical implementation, in other words, Operational Transfer Pricing (OTP).

OTP helps businesses align TP with their business models, ensure predictable and consistent outcomes, mitigate the risk of disputes and double taxation, and move from reactive to systematic management. 

Additionally, OTP helps address a range of typical issues such as:

• manual processes,

• data gaps,

• estimation errors,

• complexity of preparing of audits. 

What do we recommend in practice? 

A proactive approach integrated in the business strategy has proven to be the most effective and involves:

• periodically reviewing TP approaches in response to changes in the business model;

• monitoring legislative and regulatory changes;

• continuously updating policies and documentation;

• aligning positions with actual operations and financial data.

This systematic approach will help mitigate risks, ensure substantiated positions and interact with tax authorities with confidence.

Useful tools worth special attention include APA (Advance Pricing Agreements) that determines pricing approaches and MAP (Mutual Agreement Procedure) that helps avoid double taxation. 

We leverage our experience to develop and implement effective TP strategies that meet both regulatory requirements and business objectives.

We work with you so you can act with confidence, respond to changes and build sustainable TP approaches.