Russia | The Federal Tax Service published a letter related to shareholders activities


Letter of the Federal tax Service of the RF of 12.02.2021 No. ShYu-4-13/1749@ (hereinafter – the “Letter”) defines the shareholder activity, includes examples of such activity (in particular, preparation of consolidated statements, development of standards, policies, internal regulations for the group as a whole, etc.), outlines the key principles to be followed to differ the provision of intragroup services and the performance of shareholder’s functions.

In general, the definition of shareholder activity included into the Letter is based on the OECD Transfer Pricing Guidelines.

If certain intragroup services could be reclassified to shareholders activities there are certain tax risks for the Russian purchaser of such services, in particular, the tax authorities can disallow deductibility of fees for such intragroup services and require to pay underpaid profit tax, related penalties and interest (if any).

We recommend Russian legal entities, which receive intragroup services from foreign companies of the group to analyze a risk related to reclassification of such services to shareholder activities.


SCHNEIDER GROUP tax experts can assist in respect of the issue in question, in particular, to analyze whether certain expenses could be considered as shareholder activities, to assist in drafting of the “defense files”, to assist taxpayers during audits of the tax authorities in that respect.

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