AUDIT OF CONTROLLED TRANSACTIONS

PREPARATION OF DOCUMENTS
ON TRANSFER
PRICING

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WHO IT IS RELEVANT FOR

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COMPANY'S TURNOVER
The company's turnover exceeds ₴50 million (₴150 million since 2017).
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FOREIGN ECONOMIC ACTIVITY
A company runs foreign economic activities (including export/import, financial services, transactions with intangible assets).
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COUNTERPARTIES TO FOREIGN ECONOMIC ACTIVITY
The following category of persons is present:
  • affiliated non-resident persons;
  • non-resident commission agents, through which the Company sells/purchases goods/works (services);
  • counterparties from low tax jurisdictions.
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VOLUME OF TRANSACTIONS
The aggregate volume of controlled transactions (CT) with each counterparty on both sides is over ₴5 million (₴10 million since 2017) in total.
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Produce a report on controlled transactions and submit it to SFS before 01.10.2017.
Prepare documentation on transfer pricing (limitation period – up to 7 years).

OUR SOLUTIONS

We offer you a professional services package for reducing tax risks in transfer pricing (TP)

Detection of controlled transactions and diagnostics of transfer prices

Analysis of pricing and conditions for the controlled transactions (CT) detected

Comparison of financial and commercial conditions of CTs with other transactions

Selection of an optimal TP method
Determination of the market price range (rate of return). Calculation of a mid-point

Production
of statements for oversight authorities

Production of statements on controlled transactions

Preparation of documentation on TP with confirmation that the TP conditions comply with the arm's length principle

Adjustment of tax liability sums under CT

Development
of a TP policy


Adjustments to the current policy

Development of regulations for international groups

Support
in a tax audit
on TP

Support in an audit

Administrative/judicial appeal

Forensic investigations on TP matters

Preliminary alignment of prices at the level of the State Fiscal Service of Ukraine (SFS)

Production of a contract with SFS on CT

Support through the price negotiation in a controlled transaction

WHY CHOOSE US

Not a single return of supporting documentation from fiscal authorities

150+
PROJECTS DELIVERED

EXPERIENCE

We have experience in transfer pricing in such industries as extractive, agricultural, engineering, metallurgical, logistics, construction, food and chemical industry, transport and communications, IT, financial and others.

DOUBLE CONTROL

Adherence to the double control principle: our company comprises competent consulting experts and experts with extensive experience of working at tax authorities, who know how to turn in reports and documents on the first try.

AUDIT AND CONSULTING PRACTICE BY KRESTON GCG

7000+

PROJECTS COMPLETED

200+

REGULAR CUSTOMERS

TOP12

OF THE WORLD RANKING

150+

FULL-TIME STAFF

ORDER A CONSULTATION ON TRANSFER PRICING

OUR CASES

Examples of impacts of our transfer pricing projects

Стратегия

Client: One of the largest Ukrainian banks.

Objective: Substantiation of controlled transactions on short-term and long-term loans from the parent company.

What was done: The economic analysis showed that the intercompany transactions were inconsistent with the arm's length principle, but since the indicators of these taxpayer's transactions were below the rate of return range (indicator), an

adjustment of financial result in the transaction under adjustment was not performed as this would have resulted in reduction of the taxable base. The documentation was produced by the comparable uncontrolled price method.

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Стратегия

Client: Wholesale and retail distributor of alcohol products.

Objective: Substantiation of the royalty payments for exclusive rights to sell this type of goods.

What was done:he indicator was proved to comply with conditions of the transactions performed by independent companies, i.e. with the arm's length principle. There was documentation produced, where the substantiation of royalty rates was based

on the comparable uncontrolled price method.

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Стратегия

Client: One of the largest manufacturers of steel products on the CIS market.

Objective: Substantiation of pricing in transactions of the raw materials imported from countries on the list of low tax jurisdictions to produce taxpayer's final products.

What was done:The return rate of CT was justified by the transactional net margin method and potential internal analogs were recorded as

reference information (because the products from unaffiliated persons were not procured eventually, but the tenders had taken place).

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Стратегия

Client: One of the largest agricultural Ukrainian companies that owns distributing companies in CIS countries.

Objective: Substantiation of controlled transactions (CT) for extending loans to an affiliated person.

What was done:Since the actions of affiliated person were entirely controlled by Ukrainian taxpayers and the Borrower's credit rating was lower than the group's one, the analogs of a

controlled transaction were searched through the group's credit rating. The documentation was produced by the comparable uncontrolled price method

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Стратегия

Client: An agrarian company that performs transactions with a non-resident from a low tax jurisdiction.

Objective: Substantiation of a controlled transaction for the sale of goods.

What was done: As the company conducted uncontrolled transactions on an identical product, which was recorded in the controlled transaction, we searched for an opportunity to make

adjustments for the uncontrolled transaction to give it a substantiation. But, since the transportation costs were distributed in proportion to the outputs of supplied products in physical terms, the further substantiation was conducted by means of stock exchange quotation. The documentation was produced by the comparable uncontrolled price method.

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Стратегия

Client: One of the largest financial and industrial groups in Ukraine with offices and subsidiaries worldwide, whose one of the main business activities is construction of large industrial objects.

Objective: Substantiation of a controlled transaction for leasing construction equipment to a branch office in Central Asia.

What was done:On one hand, the construction equipment was unique and designed solely for the

client's needs, which made the priority comparable uncontrolled price method inapplicable in this case. On the other hand, the client leased construction equipment to unrelated counterparties in other jurisdictions as well. The lack of a strict comparability criteria along with an opportunity to make all necessary adjustments allowed us to apply the method "Costs+". This led to a certainty that the rate of return in the controlled transaction was same as in the uncontrolled transaction. Documentation was prepared using the method "Costs+".

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Andrii Popov

Andrii Popov

Partner

Development of new market segments
Corporate communications and business strategy expert
Experience in banking and insurance

Andrii Popov
Vladyslav Papakin

Vladyslav Papakin

Director of the Transfer Pricing Department

Production of documentation on transfer pricing for foreign markets
Implementation of the transfer pricing policy in a large holding
Work in an international audit company

USEFUL CONTENT

OUR REFERENCES

Throughout our cooperation with Kreston GСG, their employees demonstrated a high level of qualification and knowledge in transfer pricing. All objectives were successfully accomplished. The competence of their experts enables their company to render professional services in a limited schedule delivering top quality.

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Plastic Card Enterprise Ltd

CEO

К.Yu. Kuklev

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We can commend Kreston GСG as a responsible partner. We would like to note that they rendered professional consulting services quickly and competently, in compliance with the provisions of the national and international legislation that covers transfer pricing.

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Zaporozhsky Abrasivny Combinat PJSC

Chief Financial Officer

Yu.N. Hunaza

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We are satisfied with the results delivered by Kreston GCG and recommend this company as a reliable and high-profile partner. The team has performed top-quality procedures and data analysis with an emphasis on the fundamental rule of transfer pricing – the arm`s length principle. All information was provided in a timely manner and in compliance with the Contract schedule.

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Confectionery Corporation ROSHEN

H.A. Boieva

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As we cooperated with Kreston GSG, it became evident to us that their staff is highly qualified. Their experts quickly responded to all our questions arising in the process of work. They have an extensive experience not only in the field of transfer pricing but also in the taxation of agricultural companies in Ukraine.

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Maisadour Semences Ukraine LLC

Chief Accountant

O. Kochet

maysadur-otziv-2

We confirm the positive experience of cooperation with Kreston GСG, which rendered us the transfer pricing services. Their experts proved themselves to be responsible advisors, fulfilling their obligations on time and with the professionalism level we need.

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Greif Flexibles Ukraine LLC

CEO

I.V. Zlobov

greif-otziv-2

We are grateful and thankful to Kreston GСG for delivering high quality services. The tasks we assigned for development of the Report, Documentation and Transfer Pricing Policy were accomplished at a high level and complied with the current changes in the Tax Code of Ukraine.

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EGLO LLC

Chief Accountant

L.Yu. Shevchenko

eglo-otziv-2

We would like to express our gratitude to Kreston GСG - a competent and reliable business partner. Thanks to their highly professional staff, all the agreed-upon procedures in transfer pricing were implemented and a report on controlled transactions was made.

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DSV Logistics LLC

Director

A.V. Potseluenko

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