{"id":10376,"date":"2025-01-22T17:54:36","date_gmt":"2025-01-22T15:54:36","guid":{"rendered":"https:\/\/gls-law.company\/?p=10376"},"modified":"2025-01-22T17:54:44","modified_gmt":"2025-01-22T15:54:44","slug":"the-new-list-of-low-tax-jurisdictions-what-s-changed-and-how-it-affects-business","status":"publish","type":"post","link":"https:\/\/gls-law.company\/en\/the-new-list-of-low-tax-jurisdictions-what-s-changed-and-how-it-affects-business\/","title":{"rendered":"The New List of &#8220;Low-Tax&#8221; Jurisdictions: What&#8217;s Changed and How It Affects Business?"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">\ud83d\udce2 The Cabinet of Ministers of Ukraine has updated the list of jurisdictions considered &#8220;low-tax.&#8221; This is a significant event for businesses, as the new criteria simplify determining tax consequences and reduce corporate expenses. In this article, we&#8217;ll explore what has changed, its implications for businesses, and how to adapt to the new conditions.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>What\u2019s New in the List?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">In the latest revision, several countries have been removed from the &#8220;low-tax&#8221; jurisdiction list, including:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Cyprus<\/strong><\/li>\n\n\n\n<li><strong>UAE<\/strong><\/li>\n\n\n\n<li><strong>Ireland<\/strong><\/li>\n\n\n\n<li><strong>Moldova<\/strong><\/li>\n\n\n\n<li><strong>Uzbekistan<\/strong><\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">These changes result from a review of criteria in Ukraine\u2019s Tax Code (TCU). The new requirements reflect current economic realities and international standards, making the list more relevant to modern conditions.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>What Does This Mean for Businesses?<\/strong><\/h3>\n\n\n\n<h4 class=\"wp-block-heading\">1. <strong>Simplified Compliance<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Working with jurisdictions no longer considered &#8220;low-tax&#8221; now involves fewer reporting requirements and costs, including:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Less documentation for transfer pricing (TP):<\/strong> There\u2019s no longer a need to prepare TP documentation for transactions with counterparties in the removed jurisdictions.<\/li>\n\n\n\n<li><strong>No 30% adjustment:<\/strong> Expenses related to transactions with these jurisdictions are no longer subject to a 30% adjustment for corporate income tax.<\/li>\n\n\n\n<li><strong>Easier Controlled Foreign Company (CFC) compliance:<\/strong> Companies linked to these countries no longer need to prepare additional TP documentation.<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\">2. <strong>Reduced Administrative Burden<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Businesses are no longer required to justify the economic feasibility of transactions with jurisdictions removed from the list. This reduces the risk of fines for potential tax rule violations.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Updated Criteria for Related Parties<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">In addition to changes in the list of jurisdictions, the criteria for determining related parties have also been updated:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Increased minimum ownership threshold:<\/strong> The threshold has been raised from 20% to <strong>25%<\/strong> corporate rights ownership.<\/li>\n\n\n\n<li><strong>Added economic criteria:<\/strong> Not only formal legal connections but also economic interdependence are now considered.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">These updates enable a more precise assessment of related-party relationships, crucial for transfer pricing and reporting.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>How to Prepare for the Changes?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Our team of lawyers and auditors recommends the following:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Conduct a Counterparty Inventory<\/strong>\n<ul class=\"wp-block-list\">\n<li>Review whether your counterparts meet the new &#8220;low-tax&#8221; criteria.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Update TP Documentation<\/strong>\n<ul class=\"wp-block-list\">\n<li>Consider that some transactions are no longer subject to additional scrutiny.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Evaluate Business Ownership Structure<\/strong>\n<ul class=\"wp-block-list\">\n<li>If your business operates internationally, analyze whether your corporate links align with the updated related-party criteria.<\/li>\n<\/ul>\n<\/li>\n<\/ol>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>How Can We Help?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">At GLS, our lawyers and auditors are ready to assist you with:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Conducting audits of counterparties for compliance with the updated criteria.<\/li>\n\n\n\n<li>Preparing documentation for transfer pricing compliance.<\/li>\n\n\n\n<li>Advising on optimizing tax costs and mitigating risks.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Together, we\u2019ll help you succeed in international markets! \ud83c\udf0d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>\ud83d\udce2 The Cabinet of Ministers of Ukraine has updated the list of jurisdictions considered &#8220;low-tax.&#8221; This is a significant event for businesses, as the new criteria simplify determining tax consequences and reduce corporate expenses. In this article, we&#8217;ll explore what has changed, its implications for businesses, and how to adapt to the new conditions. What\u2019s [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":10362,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[222],"tags":[],"class_list":["post-10376","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cfc"],"_links":{"self":[{"href":"https:\/\/gls-law.company\/en\/wp-json\/wp\/v2\/posts\/10376","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gls-law.company\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gls-law.company\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gls-law.company\/en\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/gls-law.company\/en\/wp-json\/wp\/v2\/comments?post=10376"}],"version-history":[{"count":1,"href":"https:\/\/gls-law.company\/en\/wp-json\/wp\/v2\/posts\/10376\/revisions"}],"predecessor-version":[{"id":10377,"href":"https:\/\/gls-law.company\/en\/wp-json\/wp\/v2\/posts\/10376\/revisions\/10377"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/gls-law.company\/en\/wp-json\/wp\/v2\/media\/10362"}],"wp:attachment":[{"href":"https:\/\/gls-law.company\/en\/wp-json\/wp\/v2\/media?parent=10376"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gls-law.company\/en\/wp-json\/wp\/v2\/categories?post=10376"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gls-law.company\/en\/wp-json\/wp\/v2\/tags?post=10376"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}