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Three-tiered transfer pricing documentation

Companies part of international groups of companies with a consolidated turnover of over EUR 750 million for the year preceding the reporting year (this threshold may vary depending on the parent company’s location) are to provide the three-tiered transfer pricing documentation to Russian tax authorities: 

  • Notice of participation in an international group of companies
  • Three-tiered transfer pricing documentation:
    • Master file
    • Local file
    • Country-by-country report (CbCR)

Notice of participation in an international group of companies

The following should be included in the notice:

  • Information about the international group, its parent company and the group’s financial year;
  • Information about the company within the group authorized to submit country-by-country report.

Notices of participation in an international group of companies must be submitted to tax authorities within 8 months of the end of the group’s financial year

Master file

A general description of the group’s activities should be provided in the master file as follows:

  • Description of the group structure and control within it;
  • Description of the markets in which the companies of the group operate;
  • Description of the group’s activities;
  • Description of the group’s intangible assets;
  • Description of the group’s financial activity.

Russian tax authorities are entitled to request the group master file from Russian companies that are part of an international group. The master file must be submitted in Russian. 

Master files must be submitted to tax authorities within 3 months of the submission request made by tax authorities

Local file

The local file should provide, as listed below, detailed information about intragroup transactions in which a Russian company is involved: 

  • Structure of the Russian company’s management bodies;
  • Description of the Russian company’s activities and of its market strategy;
  • Description and functional analysis of intragroup transactions in which the Russian company is involved;
  • Justification of transfer price compliance with market prices.

Local files must be submitted to tax authorities within 30 days of the submission request made by tax authorities

Country-by-country report (CbCR)

The country-by-country report provides a summary of all the participants (companies) in an international group of companies and contains the following information: 

  • Global distribution of income within the group;
  • Taxes paid in various jurisdictions in which the group is represented.

Russian companies must submit country-by-country reports if they are the parent company of the group or the company within the group authorized to submit this report on behalf of the group. 

In such case, country-by-country reports must be submitted 12 months after the end of the group’s financial year

Russian companies must also submit CbCRs as and when requested by tax authorities. 

In such case, country-by-country reports must be submitted within 3 months of the submission request made by tax authorities

Deadlines for submission of three-tiered transfer pricing documentation in 2019

  • From January 01, 2019 tax authorities may request group master file for 2017;
  • August 31, 2019 (8 months from the end of the group’s financial year) – deadline for submission of notice of participation in an international group of companies;
  •  December 31, 2019 (12 from the end of the group’s financial year) – deadline for submission of CbCRs for 2018;
  • From December 31, 2019 tax authorities may request from Russian companies local file for 2018.

Our services

We have extensive experience in advising companies with foreign participation as well as with transfer pricing analysis and preparation of transfer pricing documentation according to OECD guidelines and Russian tax law. We would be pleased to:

  • Review the situation of your company and provide recommendations for compliance with legal requirements
  • Assist with reporting forms and liaise with group companies on documentation issues related to the preparation of:
    • Notice of participation in an international group of companies;
    • Master file;
    • Local file;
    • Country-by-country report.

Contact us

If you require further information or for a consultation, please contact us by phone +7 495 788 00 05 or email: info@accountor.ru. Alternatively, feel free to fill out the form below, and we will get back to you shortly.

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