According to commitments made to the OECD, the Russian state institutions are currently working on the development of a transfer pricing system with three stages. The new regulations are expected to enter into force on January 1, 2018. The bill foresees the introduction of additional forms of tax reporting:
- Trans-national report on statistical data of companies and their business results, for companies with a total turnover of at least 50 billion rubles per fiscal year.
- Global transfer pricing documentation (“Masterfile”) to be submitted to the tax authorities on request, just like the national documentation.
- Notification of company’s participation in an international group of companies.
It is still necessary to prepare a national documentation; the scope of the information to be provided there is widened.
The bill also provides for a significant increase in penalties:
- up to 50,000 rubles for failure to notify of participation in a group of companies or misstatements
- up to 100,000 rubles for non-submission of transnational report or wrong statements there
- up to 100,000 rubles for non-submission of global documentation
- up to 100,000 rubles for non-submission of national documentation
Given the fact that insufficient tax payments since 2017 are subject to an increased penalty of up to 40% of the underpayment, we consider it important to pay close attention to the documentation of intragroup prices within the Russian Federation.
We will be happy to assist your clients in preparing the documentation for transfer pricing in Russia.