The State Tax Service (STS) of Ukraine provides clarification regarding the obligation to submit a Country-by-Country Report and the adjustment of financial results in transactions with non-residents

The State Tax Service (STS) of Ukraine has published new individual tax rulings (ITR) addressing current issues related to transfer pricing.

In particular, ITR No. 5350/ІПК/99-00-21-02-03 dated 07 October 2025 provides clarification regarding the obligation to submit a Country-by-Country Report (CbCR) by a taxpayer that is a member of a multinational enterprise (MNE) group, where the ultimate parent entity of the MNE group is registered in Sweden and independently submits the CbCR. Given that an international agreement on information exchange is in force between Ukraine and Sweden, and the Multilateral agreement CbC MCAA (Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports) was activated on 13 November 2024, the taxpayer is exempted from submitting the CbCR in Ukraine — provided that the requirements of subparagraph 39.4.10 of the Tax Code of Ukraine (TCU) are met.

ITR No. 5386/ІПК/99-00-21-02-02 dated 08 October 2025 addresses the issue of adjusting the financial result for tax purposes in transactions with a non-resident registered in the Republic of Cyprus concerning (1) the initial placement of bonds and (2) the accrual and payment of interest income on such bonds, provided that the volume of such transactions in 2025 exceeds UAH 10 million, but the taxpayer’s annual income does not exceed UAH 150 million.

The STS notes that the adjustment under subparagraph 140.5.5¹ of the TCU does not apply to transactions involving the initial placement of bonds, as such transactions are not considered sales transactions. At the same time, with respect to transactions involving the payment of interest income on bonds that are not subject to the requirements of paragraph 140.2 of the TCU, and where the amount of expenses in such transactions are not at arm’s length, the taxpayer is required to increase the financial result for tax purposes by 30% of the amount of such transactions in accordance with subparagraph 140.5.4 of the TCU.

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