On January 25, Prime Minister had telephone conversation with Prime Minister of Estonia Jüri Ratas.
The Heads of Government, having commended the high level of bilateral cooperation, had in-depth conversation regarding the practical measures to deepen cooperation in the trade, economic and financial spheres.
While touching upon issues pertaining to financial discipline and improving the existing order of financial and economic calculations between business entities of two countries, the Head of Ukrainian Government briefed his counterpart about the content of the resolution of the Cabinet of Ministers of Ukraine at the end of December 2017 No. 1045, which approved the list of countries (territories) whose residents make business transactions subject to transfer pricing control.
Volodymyr Groysman stressed the decision is aimed to prevent tax evasion and tax-base erosion, in particular, as foreseen by such profile international organizations as the OECD.
The Prime Minister noted that the action of the said list applies only to residents of Ukraine who submit a report on controlled transactions to the tax authorities of Ukraine, hence the State Fiscal Service, in accordance with the submitted reports, will determine the risky operations subject to additional control by the system of detection of risks, as it is operates all over the world.
The above List is not a list of offshore zones.
Estonia was included in the List as a country in which the retained earnings rate makes up 0%, which can be used by residents of Ukraine for tax base erosion and profit tax avoidance in Ukraine.
The Estonian side was also informed that the NBU had not made any decisions to include Estonia in the list of offshore territories. In order to avoid possible misunderstanding in conducting account management by business entities, on January 24, 2018, the NBU sent a directive letter to Ukrainian banking institutions explaining the lack of legal grounds for applying an in-depth analysis of Estonian companies.
On the results of the conversation, the Prime Ministers agreed to commission finance ministries of their countries, together with the tax authorities, to engage in cooperation and, if necessary, to hold consultations, in which to resolve possible misunderstandings.
The Heads of Government believe that such an approach would promote the intensification and deepening of interaction in the trade and economic sphere, and will positively affect a mechanism of financial and banking operations between the two states.