ANALYSIS OF TAX AVOIDANCE MECHANISMS: ASSESSMENT OF THE IMPACTS OF BEPS IMPLEMENTATION IN UKRAINE

Abstract

The article investigates Ukraine's implementation of the Base Erosion and Profit Shifting (BEPS) Action Plan and the adaptation of national tax legislation to international transparency requirements. A fundamental contradiction exists between strict new legislative rules and the practical ability of businesses and the state to administer them effectively. The core issue is the lack of transformation in accounting and analytical support for cross-border operations. Implementing the transfer pricing reporting model and calculating adjusted profits require profound restructuring of corporate management accounting. The primary objective is to analyze tax evasion prevention mechanisms and assess the consequences of integrating BEPS. The study evaluates anti-offshore initiatives, including Controlled Foreign Company (CFC) rules, which oblige residents to disclose foreign entities and tax adjusted profits. It highlights the three-tier transfer pricing documentation, establishing unprecedented global transparency. The research emphasizes the "business purpose" doctrine and beneficial owner test as crucial tools against tax convention abuse. Integration is solidified by the Multilateral Convention (MLI) and Common Reporting Standard (CRS), effectively dismantling traditional capital flight schemes. Despite de-offshorization progress, the research reveals substantial challenges. The corporate sector faces rapidly increasing administrative burdens and compliance costs, forcing investments in multi-level reporting and international holding restructuring. Simultaneously, the State Tax Service's capacity to process massive data arrays from CRS and CFC reports is vulnerable. Without digitalization, the fiscal apparatus might pressure transparent businesses over formal errors rather than uncovering shadow schemes. Judicial practice is also complicated by ambiguous anti-BEPS norm interpretations, making the Mutual Agreement Procedure (MAP) essential. Ukraine has successfully fulfilled the BEPS minimum standard, but the EU integration vector requires implementing the Anti-Tax Avoidance Directives (ATAD I and II). Considering post-war recovery, the state must balance strict fiscal control with investment attractiveness. Authorities must shift from punitive functions to a digitized, risk-oriented analytical infrastructure to guarantee fair taxation without stifling economic growth.