Country-by-country reporting

Country-by-country reporting (CbCR) became a key topic of discussion among Ukrainian taxpayers preparing for the transfer pricing reporting campaign in 2025. In this article, we provide a detailed overview of how to determine the obligation to submit CbCR, the differences between the MCAA and QCAA, and offer some practical examples.

Paragraph 6 of Article 39.4.10 of the Tax Code of Ukraine (TCU) specifically provides that if there is an international agreement in force between Ukraine and the jurisdiction of the parent company’s tax residence (providing for the exchange of tax information) but the relevant QCAA has not entered into force by the end of the financial year, then the Ukrainian entity must submit CbCR for the international group.

CbCR is one of the key elements of the international Base Erosion and Profit Shifting (BEPS) plan developed by the OECD. Under these rules, multinational groups of companies (MNEs) with consolidated group revenue of at least EUR750 million in the preceding financial year are required to file an annual report containing information on the global allocation of profits, taxes accrued and paid, and other relevant data.

The obligation to submit CbCR is not just limited to companies required to file traditional transfer pricing (TP) reports in Ukraine (such as the Report on Controlled Transactions and the Notification on Participation in an international group of companies (IGC or CbC notification)). According to the TCU, even companies that have never previously been required to submit TP documentation in Ukraine may still be subject to CbCR filing requirements if other specific criteria are met.

The exchange of CbCRs is governed by international agreements such as the MCAA and QCAA, detailed below:

MCAA is a multilateral agreement between the competent authorities of participating countries that establishes the legal basis for the automatic exchange of CbCRs between jurisdictions.

QCAA is a bilateral or multilateral technical agreement that details the procedures and format for CbCR exchange. The agreement is considered “active” if both countries have completed the necessary technical steps, including data security and confidentiality checks.

Please note that the key document for determining CbCR filing obligations in Ukraine is the status of the QCAA (i.e. active/inactive).

For reference, here is a link to the OECD’s list of QCAAs (Activated exchange relationships for Country-by-Country reporting): Automatic Exchange of Information - Exchange relationships

Ukraine has joined the MCAA, but the exchange of CbCRs has only been activated with a limited number of jurisdictions; specifically, those with whom a QCAA has been concluded. For example, if the parent company is located in a jurisdiction with whom Ukraine has an active QCAA, the CbCR is filed exclusively in the country of the parent company and the Ukrainian subsidiary or representative office is exempt from filing the report locally.

• 🟢 – Yes / Active / Above threshold
• 🔴 – No / Absent / Below threshold

We are also closely monitoring the State Tax Service’s comments on these particular issues.

We would like to draw your attention to the deadlines for submitting the CbCR in Ukraine, especially for taxpayers whose financial year, as determined by the parent company, differs from the calendar year.

According to Order of the Ministry of Finance of Ukraine No. 764 dated 14 December 2020, the CbCR must be submitted no later than twelve months after the last day of the financial year for which the consolidated financial statements are prepared. For example, if the financial year of Group ends on 29 March 2025, CbCR in Ukraine must be submitted by 29 March 2026.

In practice, we have encountered various financial year-end dates within multinational groups. We therefore strongly recommend that you carefully verify the financial year dates of your Group to ensure timely and accurate submission of CbCR in Ukraine.

Please also keep in mind that CbCR filing obligations stay the same under the following criteria:

• The taxpayer is the parent company of an MNE group.
• The parent company of an MNE group authorises a Ukrainian resident taxpayer to file CbCR with the tax authorities on behalf of the MNE group.
• submission of the CbCR is not required under the legislation of the parent company’s jurisdiction.

Taxpayers that are part of an MNE group should therefore carefully analyse their role in the group structure and the requirements of both Ukrainian and international legislation regarding CbCR.

In case of non-compliance with the requirements of the TCU, the following penalties may be imposed on taxpayers:

• checking whether Ukraine has an active QCAA with the jurisdiction of the parent company
• taking into account the relevant submission deadlines
• considering the technical requirements for preparing CbCR
• consulting with transfer pricing specialists.