Legislative Tracking in Focus

Autumn tax amendments: tightening transfer pricing rules

A major tax package introducing amendments to the Russian Tax Code has recently passed the third reading in the State Duma.

Increasingly under the spotlight, the proposed measures providing for a major clampdown on the transfer pricing rules are:

  • to classify TP adjustments for controlled transactions with non-residents as dividends subject to withholding tax;
  • to expand the related party criteria;
  • to calculate arm’s length prices as the median of the arm’s length range;
  • to expand the scope of reportable information on controlled transactions;
  • to increase the fines for transfer pricing breaches;
  • to change the safe harbor interest income/expense rates.

Read on for a more detailed review.