HOW TO FILL OUT A NEW REPORT ON CONTROLLED TRANSACTIONS FOR 2020

On March 19, 2021, Order of the Ministry of Finance No. 841 of December 31, 2020 “On Amendments to the Form and Procedure for Drawing Up a Report on Controlled Transactions” (hereinafter referred to as Order No. 841) came into force, which amended Order of the Ministry of Finance No. 8 of January 18, 2016 “On Approval of the Form and Procedure for Drawing Up a Report on Controlled Transactions” (hereinafter referred to as the Report and Procedure).

Order No. 841 amended the Report and Appendices to the Report:

• in the Report form, the table “General information about controlled transactions” is supplemented with a new column 4 “Digital country code”, which indicates the digital code of the country of registration of a non-resident party to the controlled transaction.
• in the new version, the table of the Appendix to the Report “Information on Controlled Transactions” is supplemented with the column “Source(s) of information used by the taxpayer to establish compliance with the conditions of a controlled transaction with the “arm’s length” principle, which consists of column 26 “Code(s) of the source type” and column 27 “Name(s) of the source(s) of information”.

Information about the relation of persons is supplemented with the relation code “523”, which indicates the relation attribute according to paragraph “c”, subclause 14.1.159 of the TCU at the time of performing the controlled transaction.

Amendments have also been made to the Procedure and Appendices to the Procedure:

“Digital country code” must be filled in according to the List of World Country Codes for Statistical Purposes, approved by Order No. 32 of the State Statistics Service of Ukraine dated January 08, 2020;

Clause 25 on filling in column 21 has been supplemented with new paragraphs:

“In column 21, the code “307” is used only if the taxpayer establishes compliance with the conditions of controlled transactions with raw materials (from the list approved by the Cabinet of Ministers of Ukraine) with the “arm’s length” principle, which is carried out by taxpayers taking into account the requirements of the relevant procedures approved by the Order of the Ministry of Finance of Ukraine according to paragraph 39.3.3.4, subclause 39.3.3, clause 39.3, Article 39, Section I of the Code.

If a combination of multiple methods is used, the codes of multiple methods can be separated by commas and spaces (“, “)”.

Amendments in Appendices to the Procedure for Drawing Up a Report on Controlled Transactions:

Appendix 2 “Relation Attribute Code of Persons” to the Procedure is set out in a new version and supplemented with new attributes:

1) for individuals:

an individual who is a related person according to paragraph “c”, subclause 14.1.159 of the TCU at the time of performing the controlled transaction – Appendix 2 is assigned the attribute code 523;

2) for entities without the status of a legal entity:

recognized as a related person according to passage nine, paragraph “c”, subclause 14.1.159 of the TCU at the time of performing the controlled transaction – attribute code 524″.

New items are added to Appendices 4 and 6 to the Procedure, in particular:

code of the transaction subject type (Appendix 4) – a new line under code 209 “Raw materials according to the List of Raw Materials”, approved by Resolution of the Cabinet of Ministers of Ukraine No. 1221 of December 09, 2020“;

code of the method for establishing compliance of the conditions of a controlled transaction with the “arm’s length” principle (Appendix B) – a new line according to code 307 “Comparative uncontrolled price method according to paragraph 39.3.3.4, subclause 39.3.3, clause 39.3, Article 39, Section I of the Tax Code of Ukraine”.

The code “307” in column 21 must be indicated if the taxpayer uses the relevant procedures approved by the Ministry of Finance of Ukraine according to paragraph 39.3.3.4, subclause 39.3.3, clause 39.3, Article 39, Section I of the Tax Code of Ukraine. If the taxpayer uses the comparative uncontrolled price method for transactions with commodities without taking into account the specified procedures, code “301” must be used.

In addition, the Procedure for Drawing Up a Report on Controlled Transactions is supplemented by Appendix 8 “Information Source Codes”, which defines the codes and types of information sources.

The Report on Controlled Transactions performed by taxpayers during the 2020 reporting year must be filled in and submitted according to the updated form and following the procedure approved by Order No. 841.