MOSCOW. July 14 (Interfax) - Ukrainian Deputy Finance Minister Svetlana Vorobei has signed an updated roadmap for the implementation of the action plan under the Inclusive Framework on Base Erosion and Profit Shifting (BEPS) as part of the support to Ukraine on this path by the Secretariat of the Organization for Economic Co-operation and Development (OECD) for 2023-2025.
The deputy minister led the Ukrainian delegation at the 15th plenary session of the OECD/G20 Inclusive Framework on BEPS and reached an agreement on enhanced cooperation and support from the OECD Secretariat for 2023-2025, Ukrainian media outlets said, citing the Finance Ministry on Friday.
This work is conducted since 2017, the ministry said. The roadmap identifies the priority actions for the period 2023-2025 and is intended to assist Ukraine in addressing new and specific challenges emerging from the current circumstances, the ministry said.
The roadmap's objective is also to intensify the efforts to bring the system in compliance with international tax standards. It is of strategic importance in anticipation of significant foreign direct investments related to the recovery period, the ministry said.
During the meeting, Ukraine together with 137 members of the Inclusive Framework on BEPS agreed an outcome statement on the Two‐Pillar Solution to address the tax challenges arising from the digitalization of the economy.
In addition to the text of the Multilateral Convention enabling jurisdictions to reallocate and exercise a domestic taxing right over a portion of residual profits of multinational enterprises, the statement also coordinates the framework for the simplified and streamlined application of the arm's length principle to baseline marketing and distribution activities within the country and elaborates on the Subject-to-Tax Rule together with its implementation mechanism.
It will enable developing countries to update bilateral tax agreements to "tax back" income on certain intra-group income where such income is subject to low or nominal taxation in the other jurisdiction.
Ukraine has been a member of the Inclusive Framework on BEPS since 2017 and in 2017-2022, it used its Induction Program and took part in several capacity-building activities to support the implementation of the BEPS measures, which have resulted in significant legislative improvements and consistent application of international tax standards.
According to the website of the Finance Ministry, the BEPS action plan contains reports on 15 measures determining actions, starting from new minimal standards, the revision of the existing standards, and common approaches facilitating the approximation of national practices, as well as guidelines developed on the basis of the best practices.
In order to implement the BEPS package in Ukraine, the Finance Ministry together with the National Bank drafted a roadmap for the implementation of the BEPS action plan and a relevant bill.
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