Transfer pricing requirements in Russia
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. Below we described all the requirements, deadlines and our transfer pricing services.
Risk of price verification in group:
- International trade of commodities;
- Offshore transactions;
- Companies with high turnover under controlled transactions.
Transfer pricing deadlines in 2019
- March 28, 2019 - deadline for submission of profit tax return for 2018. Tax adjustments rectifying any discrepancy between transfer prices and market level should be specified in such tax return;
- May 20, 2019 - deadline for submission of reports on controlled transactions for 2018;
- June 1, 2019 - the beginning of tax audits of controlled transactions concluded in 2018. 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
Penalty is 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.
Our transfer pricing services:
- 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.
Accountor Group is the largest financial and HR service company in Northern Europe. We are a leading consulting company in Russia and one of the first to have entered the Russian market as early as 1992.
Leading positions in Russia
Accountor is a leading consulting company in Russia. In the latest rating of the Expert Rating Agency Accountor Russia was ranked:
- TOP-10 accounting outsourcing companies in Russia
- TOP-10 payroll outsourcing companies in Russia
- TOP-10 financial consulting companies in Russia
- TOP-10 legal consulting companies in Russia
Our experts in transfer pricing
All our specialists have extensive experience in tax consultation, transfer pricing analysis and preparation of documentation according to international standards developed by the OECD and according to Russian tax law.