According to the SFS of Ukraine, 90 % of taxpayers subject to TP control apply the net profit method. At the same time, there are many controversial issues during its application, concerning which the court practice has not been formed yet.
The first step to its formation was the decision of the first instance court in the case upon the results of the appeal by the manufacturing enterprise of the international group of companies of the results of the audit conducted under Art. 39 of the Tax Code of Ukraine. KM Partners team appeared in the court for the enterprise.
According to the circumstances of the case, the fiscal authority challenged the results of analysis in the TP documentation, drafted with assistance of the audit company. The controlling authorities calculated by themselves the profitability indicator and identified the new market range of profitability in the act of TP audit, and made the conclusion that the prices in transactions were not at arm’s length.
In the process of one of the most difficult court disputes of our team, we succeeded and obtained the positive result for the client in the first instance court. The claim was completely sustained!
The judicial interpretation of many important aspects of the TP control is being formed for the first in Ukraine in this court proceeding. KM Partners team will do its best to protect the approaches that limit the possibility of abuse of TP rules by the fiscal authorities.
client: manufacturing enterprise of the international group of companies