Transfer pricing requirements
Russian companies concluding transactions with related foreign entities (so-called controlled transactions) must submit documents to tax authorities for verification of the prices applied in such transactions. If such prices are not in line with market level, this could indicate an understatement of payable taxes.
Risk of price verification in group:
- International trade of commodities;
- Offshore transactions;
- Companies with high turnover under controlled transactions.
Transfer pricing deadlines
March 30, 2018 - deadline for submission of profit tax return for 2017. Tax adjustments rectifying any discrepancy between transfer prices and market level should be specified in such tax return;
May 20, 2018 - deadline for submission of reports on controlled transactions for 2017;
June 1, 2018 - the beginning of tax audits of controlled transactions concluded in 2017. Transfer pricing documentation justifying the prices applied in controlled transactions in 2017 should be prepared and ready by that time. Companies must submit to tax authorities transfer pricing documentation within 30 days of receipt of request from tax authorities.
Penalties for understated tax
If it is found during a tax audit that the tax base was understated because transfer prices were not in line with market prices, tax authorities will then be entitled to collect unpaid taxes, as well as impose a penalty of 40% on the unpaid tax amount.
Elimination of transfer pricing risks
Companies are not subject to fines if they submit transfer pricing documentation.
We offer full support for preparation of transfer pricing documentation and for tax audit preparation:
- Identification of related entities and controlled transactions;
- Business overview and selection of appropriate transfer pricing method;
- Comparative analysis of transfer prices, including market analysis and calculation of corporate indicators;
- Preparation of transfer pricing documentation;
- Updating of transfer pricing documentation;
- Preparation of report on controlled transactions.
If you would like to find out more about our services, please feel free to contact us by phone/WhatsApp: +7 495 788 00 05, by email: firstname.lastname@example.org or by filling out the form below. We will get back to you as soon as possible.