Controlled transactions: new recognition criteria

Please note that since FY2019 amendments to the art.105.14 of the Russian Tax Code came into force. The amendments relate to criteria on recognition of transactions as controlled transactions and significantly reduce the list of controlled transactions between Russian taxpayers as well as introduce turnover threshold criterion to transactions carried out with foreign related parties.

Since FY2019 transactions are recognized as controlled transactions if the following conditions are met: 

Type of transactions


Turnover threshold


  • parties apply different corporate profit tax rates
  • one of the parties pays mineral extraction tax and a transactional subject is taxed with it at the percentage rate
  • one of the parties applies special taxation system (Unified tax on imputed income, Uniform Agricultural Tax)
  • one of the parties is exempt from corporate profit tax
  • one of the parties recognizes profits (costs) within such a transaction in the tax base calculation from activities of the production of hydrocarbons at a new offshore hydrocarbon field
  • one of the parties is a research center in “Skolkovo”
  • one of the parties applies investment tax deduction to corporate profit tax according to the art. 286.1 of the Russian Tax Code
  • one of the parties pays tax on additional income from hydrocarbon production and a transactional turnover (profits/costs) are recognized in this tax base calculation

RUB 1 billion


No additional criteria

RUB 60 million

Based on the above, the amount of transactions to be filed in the notification on controlled transactions is significantly reduced for many corporate groups since FY2019.


Regardless the fact that amendments to the Russian Tax Code reduce the amount of controlled transactions and time to be spent for preparation of the notification on controlled transactions, in fact the amendments take significant transactions between related Russian taxpayers out of control by the Federal Tax Service and transfer them under control of local tax authorities, which still may challenge the level of prices or profitability values within such transactions by misrepresenting the business objectives and intentions of the parties with the purpose to identify signs of coherence of their actions that is aimed at obtaining unjustified tax advantages by the parties (based on provisions of Art. 54.1 of the Russian Tax Code, provisions of the currently valid Resolution of the Supreme Arbitrage Court’s Plenum No. 53, i.e. by applying the “unjustified tax benefit” conception and by using TP methodology or an appraiser’s services). At the same time the amendments deprive taxpayers of the symmetric adjustment mechanism by results of additional tax assessment in relation to those transactions. 

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