On 21 March 2016, the National Bank of Ukraine hosted a three-way working meeting between representatives of the NBU, the State Fiscal Service of Ukraine (hereinafter the State Fiscal Service) and the Antimonopoly Committee of Ukraine.

The main purpose of the meeting was to work out a common strategy for transfer pricing compliance and discuss ways to encourage de-offshorization of Ukrainian business.

NBU representatives at the meeting included NBU Governor, Ms Valeria Gontareva, and her Deputy Governors, Mr Yakiv Smolii, Mr Vladyslav Rashkovan, and Ms Kateryna Rozhkova. The State Fiscal Service was represented at the meeting by Head of the State Fiscal Service, Mr Roman Nasirov, and his First Deputy Head Mr Serhii Bilan. The meeting also featured First Deputy Head of the Antimonopoly Committee of Ukraine and State Commissioner, Ms Mariya Nizhnyk.

Ms Gontareva expressed the NBU's readiness to engage in fruitful cooperation with the State Fiscal Service. The NBU Governor earmarked de-offshorization of Ukrainian business as the main area of cooperation between the NBU and the State Fiscal Service.

“The NBU strongly believes that there is an urgent need to discuss a de-offshorization model, which would disrupt the status quo, and find the resolve to recognize the fact that companies take advantage of offshore tax shelters to minimize, defer, or avoid paying taxes. De-offshorization should not “choke” businesses, but business should be transparent. It is essential for Ukraine to identify beneficial owners of offshore companies,” said Ms. Gontareva. According to her, the EU countries have been following the same path, adhering to the requirements set out in the Organisation for Economic Co-operation and Development's Base Erosion and Profit Shifting (BEPS) Project.

Mr Nasirov backed the proposal to work out a common concept of de-offshorization.

“We are ready to share our experience and expertise in this area with the NBU and fully back the proposal to work out a common concept of de-offshorization,” underlined Mr Nasirov.

The common concept of de-offshorization will be based on practices used by the State Fiscal Service and the NBU. This concept will be reflected in a draft law on de-offshorization and revised FX regulation and capital controls.

The Antimonopoly Committee of Ukraine underlined its readiness to join efforts to develop these draft laws.

Additionally, the meeting participants agreed to establish information-sharing mechanisms to exchange financial sector information, discussed transfer pricing practices, and called for the need to pool efforts to clamp down on conversion centers and underground foreign exchange offices. “Through joint efforts we will be able to find the right instrument to create conditions to bring businesses out of the shadows. This will not only be the right thing to do, but will also will be beneficial for businesses and the economy.

The next meeting is scheduled to take place in a few weeks. It will be focused on the concept of de-offshorization of Ukrainian business.