Expansion of Conditions for Recognising Transactions as Controlled for Transfer Pricing Purposes from 2026

On 1 January 2026, amendments to Article 105.14 of the Tax Code of the Russian Federation came into force, expanding the criteria for recognising transactions as controlled for transfer pricing (TP) purposes.

Key changes

Transactions with foreign counterparties registered in countries (territories) where the legislation provides for the profit tax rate of 15% or lower are equated to transactions between related parties, regardless of the actual interdependence of the parties.

Conditions for recognising a transaction as controlled on new grounds

• The total income (expenses) from such transactions with one counterparty exceeds RUB 120 million per calendar year.
• The counterparty applies (or is entitled to apply) the profit tax rate ≤ 15% in its jurisdiction.

Even if the counterparty is independent, the TP rules apply to the transactions, requiring the following:

• notification of controlled transactions;
• preparation of TP documentation;
• confirmation of price compliance with market levels using one of the methods established in Chapter V.1 of the RF TC.

The new criterion applies to transactions made on or after 1 January 2026.

It should be noted that in countries with differentiated rates, the rate actually applicable to a specific counterparty should be used as a guide (in the absence of official clarifications from the Federal Tax Service of Russia).

The introduction of Pillar 2 rules in a number of jurisdictions raises the effective rate to 15% for members of large international groups, but the formal rate of ‘exactly 15%’ does not exempt them from TP control, if the threshold of RUB 120 million is exceeded.

Recommendations for taxpayers

• Implement a procedure for regularly obtaining information on the applicable profit tax rate from foreign counterparties.
• Analyse current and planned transactions to determine whether they fall under the new criterion.
• Prepare a system for collecting data and documentation on TP for potentially controlled transactions from 2026 onwards.