On 18 July 2011, President Medvedev signed the final version of a federal law that amends Russian tax legislation relating specifically to transfer pricing (the "Law"). The Law regulates the following:
- establishing a clear and concise list of related parties and regulated transactions;
- introducing a list of methods used by the regulating bodies when determining the prices of deals between related parties;
- specifying a procedure for presenting documents to the regulating bodies and for reporting on regulated transactions; and
- levying penalties for not adhering to the rules of transfer pricing.
The Law comes into force on 1 January 2012, and the first tax inspections to check for adherence to the Law will not start earlier than 2013. However, we recommend beginning to analyse the status of intra-group counter parties. In addition, when possible, start gathering documents on pricing within a group of companies.
Please look for a more detailed analysis in our July 2011 Russia Tax Outlook.
[Federal Law No. 227-FZ "On Amending the First and Second Parts of the Tax Code of the Russian Federation, and Declaring Void Separate Provisions of the Federal Law 'On Amending and Adding to the First Part of the Tax Code of the Russian Federation in Respect of Improving the Means to Determine Prices for Tax Purposes'", dated 18 July 2011]