The obligation to carry out a 30% adjustment of the financial performance before taxation is part of Ukraine’s Tax Laws.
This regulation applies to corporate income tax payers whose foreign economic transactions are not recognized as controlled in accordance with Art. 39 of the TCU and are carried out with:
Financial performance is adjusted by increasing the financial performance before taxation in the amount of 30% of the cost of goods, works or services based on the results of the specified foreign economic transactions.
However, it is worth noting that there is an opportunity to avoid the 30% adjustment if the income taxpayer can justify that the terms of the transactions correspond to the arm’s length principle in accordance with the procedure established by Art. 39 of the TCU.
Preparation of TP documentation or substantiation of compliance of prices with the arm’s length principle in accordance with the procedures established by Art. of the TCU is an effective tool for avoiding a 30% adjustment of the financial performance before taxation.
