Transfer pricing services
In the current economic climate, Transfer Pricing is the most important tax issue facing not only multinational businesses but also any cross border business. As in many countries, the Transfer Pricing regulation in Russia became more prescriptive.
Our tax team has a wide technical experience in this area and fully supports our clients for the compliance with the requirements on Transfer pricing documentation and for the implementation of new Transfer Pricing solutions.
- What are the requirements of the Transfer Pricing regulation in Russia?
- What are the opportunities provided by Transfer Pricing solutions?
- What are the stages for the elaboration of the Transfer Pricing Documentation?
- Why Mazars?
What are the requirements of the Transfer Pricing regulation in Russia?
In 2012, new rules on Transfer Pricing took force in Russia. In accordance with these rules a company should:
1. File with the tax authorities a Notification on controlled transactions before May 20th of the following year.
The Notification should contain apart from general information on each transaction (information on parties of transaction, object of transaction, information on agreement, transaction fees, etc.) information on:
- Transfer pricing method,
- Sources of information used by the company.
2. During 30 days starting from the tax authorities’ request submit to the tax authorities a Transfer Pricing Documentation.
If the taxpayer fails to submit within the established deadlines the required Documentation to the tax authorities, additional tax adjustment and a 40% tax penalty may be applied (during transition period amount of tax penalty will be less: no penalty in 2012-2013, for 2014-2016 - 20%).
Preparation of the Documentation shifts the burden of proof onto tax authorities.
- As of the moment of preparation of the Notification a company should be ready to present rather detailed information on pricing mechanism per each controlled transaction included into the Notification.
- 30 days are certainly not enough to prepare the Documentation, therefore, it is recommended to take care about the Documentation beforehand. Moreover, it is reasonable to prepare the Documentation simultaneously with the Notification.
What are opportunities provided by Transfer Pricing solutions?
Besides elimination of compliance risks, proper transfer pricing solutions can provide various benefits, such as:
- a lower effective tax rate;
- improved cash flow;
- mitigation or even elimination of tax risks related to intercompany flows.
What are stages of process of elaboration of the Transfer Pricing Documentation?
Our work on preparation of the Transfer Pricing Documentation and filling in the Notification consists of the following stages:
We have an expertise in the field of transfer pricing, since we are an international company
Russian Transfer Pricing rules are elaborated on basis of the OECD Guidelines. Through several years Mazars, being guided by the OECD principles, actively advises its clients on transfer pricing issues. During these years Mazars has developed a wide database of documentations. Our Russian team regularly attends trainings held by highly qualified transfer pricing specialists.
We use different informational databases needed for obtainment of comparable data
The Tax Code allows using different informational databases for comparable data search. As of today Mazars uses the following databases:
- SPARK and RUSLANA – databases on Russian companies,
- AMADEUS – database on companies on West and East Europe,
- ORBIS – database on companies throughout the world,
- ORIANA – database on companies of Asian-Pacific region,
- BLOOMBERG – database on information on financial market transactions,
- Royaltystat, ktMINE – database on transactions with intellectual property,
- СBONDS – database on loans.
We provide qualitative service that fits your budget
We take time to understand your business and develop a tailor-made solution that suits your needs and budget.