Oleksandr Klymenko Official website

Restoring justice

"The point of profit" - in Ukraine

Oleksandr Klymenko was the first and only politician in the history of independent Ukraine, who systematically opposed the withdrawal of capital from the country without paying taxes. Due to his activities, there was worked out and adopted law on transfer pricing. Its implementation would make the oligarchs to pay taxes honestly to the Ukrainian budget.

Throughout the short history of Ukrainian independence, big business and its oligarchic owners used to find “loopholes” in the tax law to withdraw the profit from Ukraine without paying taxes.

Almost all the politicians were struggling (in words) or promised to fight the oligarchs. In fact, almost all political parties have lobbyists interests of big business, who were concerned about the existence “loopholes” without reference to president or people, who occupy government positions.

Ukraine and, first of all, its citizens, were losing and still lose hundreds of billions UAH due to these schemes. This money could be spent on the development of our country. In fact, it is deposited in offshore accounts of oligarchs.

Oleksandr Klymenko became the first (and the one) Ukrainian leader who has taken real and effective steps to fight this injustice (not in words but in deeds).

His team took best European practices as a basis. It created national law on transfer pricing. The oligarchs would lose the ability to hide profit via artificially low price through transactions with companies controlled by them due to the adoption of this law. Big business has to show their true profit, which will be taxed on a common basis. Caste of “celestials” would lose their privileges and billions of profits.

There was unprecedented pressure on Oleksandr Klymenko and the Ministry during that period.  Big business (through its lobbyists) has submitted more than 300 amendments in order to “blur” the essence of the proposed mechanism. Klymenko and his team were threatened. Gossips about his resignation were circulating in the press.

Nevertheless, the law was adopted on July 4, 2013. It should have come into force on May 1, 2014. According to the preliminary calculations, it should have brought more than UAH 20 billion to Ukraine during the first three years.

Big business has almost reconciled and admitted the new rules: export operations through offshore halved by the end of 2013.

It was a victory of Ukrainian state and Ukrainian people in the battle for their legitimate and fair economic interests.

In 2014, new government and the new leadership of the State Fiscal Service actually abandoned the implementation of the law under the pressure of oligarchs. Modifications, which were made, have destroyed the most effective tool of struggling with the illegal withdrawal of billions from Ukrainian budget.

561 | 12.08.2015

Additional materials

The concept of the Law on Transfer Pricing
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