You're reading: The Verkhovna Rada has approved a bill on transfer pricing in principle

The Verkhovna Rada, Ukraine's parliament, has approved a bill "On amendments to the Tax Code of Ukraine on transfer pricing" (No. 2515) at first reading.

A total of 279 MPs supported the bill, with 226 votes required for approval.

"We have the support of business, and could attract UAH 20 billion within three years without creating additional tax pressure," Income and Tax Minister Oleksandr Klymenko said while presenting the bill. 

According to him, the bill matches the recommendations of the Organization for Economic Cooperation and Development (OECD) and will build an efficient transfer pricing system in Ukraine.

“I’m calling for support for the position of state patriotism: profits should stay in the country where they were earned,” Klymenko said, adding that Ukraine is still a world outsider in this regard.

However, opposition factions Batkivschyna and UDAR criticized the bill. As ex-economy minister Serhiy Teriokhin said it failed to correspond to the recommendations of the OECD, and that it introduced benefits for companies, the owners of which have close links to the present government, in branches such as chemistry, metallurgy, and the coal industry.

The opposition said the main problem with the law was is that it also imposes controls over domestic operations.

“The law allows there to be an influence on domestic pricing, which nowhere else in the world has,” UDAR member Oksana Prodan said.

Head of profile parliamentary faction and Regions Party member Vitaliy Khomutynnyk admitted that there was a problem of controls over internal operations, but said that it should be resolved when preparing the document for second reading.