FROM FISCAL AUDIT TO DIGITAL COMPLIANCE: THE TRANSFORMATION OF THE TRANSFER PRICING CONTROL SYSTEM IN UKRAINE

Abstract

This article examines the ongoing overhaul of Ukraine’s transfer pricing (TP) control framework amid martial law, accelerating digitalization, and the adoption of BEPS standards. It argues that Ukrainian tax administration is shifting from a predominantly fiscal audit posture toward a risk-oriented compliance model that leverages Big Data, predictive analytics, natural language processing, and compliance automation to prioritise interventions and reduce unnecessary burdens on low-risk taxpayers. Drawing on OECD guidance, the Tax Administration 3.0 paradigm, and selected European practices, the study assesses how automated information exchange (including CbCR) and preventive instruments, such as advance pricing agreements (APAs), can strengthen tax certainty. The paper highlights three technical pillars of the transformation: predictive analytics for forward-looking risk selection; text analytics to reconcile contractual and factual evidence in functional analyses; and “mirror” data architectures that enable seamless, machine-readable reconciliation between taxpayers’ systems and tax authorities. It identifies persistent challenges in controlling transactions involving intangible assets, intra-group services and business restructuring, and stresses that 

technological upgrades must be accompanied by transparent procedures, robust administrative justice and trust building between the state and taxpayers. A comparative review of Estonia, Latvia and Lithuania shows that digital tools deliver results only when paired with institutional reforms. The article concludes that a predictable, transparent TP regime is a strategic prerequisite for restoring investor confidence and supporting Ukraine’s sustainable post-war recovery.