The delegation of the Ministry of Finance of Ukraine and the State Tax Service of Ukraine took part in meetings with representatives of the Organisation for Economic Co-operation and Development

On 18-20 September 2024, experts from the Ministry of Finance of Ukraine and the State Tax Service of Ukraine met with experts from the Secretariat of the Organisation for Economic Co-operation and Development (OECD) in Paris (France). The purpose of the visit was to discuss the progress in the implementation of the tax policy reform measures set out in the National Revenue Strategy 2030 (hereinafter referred to as the NRS), which are being implemented with the active support of the OECD.

As part of the programme of events, the Ukrainian delegation headed by Lyudmyla Palamar, Director of the International Taxation Department of the Ministry of Finance of Ukraine, had the opportunity to meet, in particular, with Ms Manal Corwin, Director of the OECD Centre for Tax Policy and Administration (CTPA), Mr Harry Tonino, Acting Head of the CTPA Global Relations and Development Division, and Ms Zayda Manatta, Head of the Secretariat of the Global Forum on Transparency and Exchange of Information for Tax Purposes.

Mr Tomas Balco, Senior Tax Advisor at the OECD CTPA, moderated the working discussions. During the meetings, the participants paid special attention to the methodological issues of drafting Ukrainian laws to improve transfer pricing rules in line with the OECD guidelines (section 4.3.3(b) of NRS) and to implement the European Union's anti-avoidance rules (ATAD rules) section 4.3.3(d) of NRS).

During the discussion of the draft law of Ukraine on improving the transfer pricing rules, attention was focused on bringing the rules in line with the provisions of the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (2022 edition). The discussion also addressed the issue of taking further tax policy and tax administration actions aimed at motivating taxpayers to voluntarily comply with the requirements of tax legislation in the field of transfer pricing.

Furthermore, as part of the discussion of the draft law of Ukraine on the implementation of the European Union's Anti-Tax Avoidance Directive (ATAD), focus was on achieving coherence with the BEPS Action Plan in those areas where Ukraine still have gaps or inconsistencies in the tax legislation.

Deputy Minister of Finance Svitlana Vorobey and experts from the International Monetary Fund (IMF) led by Jan Loeprick, Senior Economist of the Fiscal Affairs Department (FAD), joined the discussion via teleconference. Svitlana Vorobey emphasised the importance of this work in the context of fulfilling the requirements of the NRS. It was agreed that the IMF and OECD experts will jointly review the draft texts of these projects in the near future.

Moreover, the participants discussed the launch of the Tax Inspectors Without Borders (TIWB) programme in Ukraine, as well as further steps to develop the capacity of institutions and professionals involved in international taxation issues.

Also, on 19 September 2024, Liudmyla Palamar, Director of the International Taxation Department of the Ministry of Finance of Ukraine, took part in the ceremony of signing a new international instrument - the Multilateral Convention to Facilitate the Implementation of the Subject-to-Tax Rule (STTR MLI) - by the countries participating in the OECD/G20 Inclusive Framework on BEPS. This agreement is one of the tools for implementing the second component of the Two-Pillar Solution - aimed at reinforcing existing taxing rights of Ukraine. During the signing ceremony Liudmyla Palamar announced the interest in joining the STTR MLI and the intention of the Ministry of Finance of Ukraine to complete all necessary domestic procedures required for accession to this agreement (as expressly provided for in Section 4.3.3(c) of the NRS).

During the visit, the delegation of Ukraine managed to discuss a number of other important issues of further cooperation with the OECD in terms of bringing elements of Ukrainian tax legislation in line with international best practices and recommendations, namely

• a meeting was held with OECD experts responsible for the Tax Policy Review, during which possible approaches and expectations of the Ministry of Finance were identified. Assistance in this area is envisaged by the OECD Country Programme for Ukraine and the Action Plan for its implementation approved by the Government;
• a meeting was held with OECD experts who are involved in the development of OECD recommendations in the area of Tax Morale and voluntary compliance with tax laws by taxpayers. Compliance with the OECD recommendations in these areas is a cornerstone for the successful implementation of measures 4.2.1 and 4.2.2 of the NRS in the area of tax administration. 

The last day of the working visit of the Ukrainian delegation was devoted to discussions with representatives of the Anti-Corruption Division of the OECD Directorate for Financial and Enterprise Affairs (DAF/ACD) on Draft Law No. 10319 ‘On Amendments to the Tax Code of Ukraine to Take into Account the Recommendations of the Council for Economic Cooperation and Development on Tax Measures to Further Combat Bribery of Foreign Public Officials in International Business Transactions’. Representatives of the Verkhovna Rada Committee on Finance, Taxation and Customs Policy, in particular, the Chairman of the Committee Danylo Hetmantsev together with Deputy Chairman - Oleksandr Kovalchuk, also joined the discussion via teleconference. The adoption of this law will be an important step towards Ukraine's ratification of the Anti-Bribery Convention.

As a result of these meetings, agreements were reached on the further cooperation and interaction of representatives of the Ministry of Finance of Ukraine and the State Tax Service of Ukraine with OECD experts in the further implementation of OECD recommendations and initiatives in the field of international taxation in the tax legislation of Ukraine.