If you carry out transactions with non-residents, it is you whom the “principal purpose" test may apply to. The law provides for its application with effect from 23 May 2020.
1. What is the principal purpose test?
The test for the principal purpose of transactions with non-residents provides, in the context of application of international tax conventions, that the tax benefits under international treaties of Ukraine are not granted if the principal or prevailing purpose of a business transaction was to gain direct or indirect tax benefits.
2. What other criteria are taken into account?
It is a transaction as such and its economic consequences for the parties that may be analysed. Moreover, due account may be taken whether the recipient of the income is organisationally independent and whether it carries out significant economic activities (for example, whether it has a sufficient number of employees, office, etc.).