An appellate court has ruled on a second court case of transfer pricing[1]. The conclusions of this high-profile case will affect all taxpayers who have entered into cross-border transactions with related parties. This case confirms that it is necessary to thoroughly justify why a transfer pricing method has been selected over another and clearly specify the reasons for rejecting the other methods. This case also shows that approaches traditionally used to justify the selection of a certain transfer pricing method may miss the mark. 

It will be difficult from 2018 onwards to transfer any property rights to a daughter (subsidiary) company without paying profit tax. It will also become more difficult to increase the net assets of subsidiaries

The deadline for reporting controlled transactions has expired recently, and all the companies that had to report such transactions can now breathe a sigh of relief. Meanwhile, some companies which filed no reports on controlled transactions for 2013 have already received requests from tax authorities enquiring as to why no reports have been filed.

In view of practical issues that foreign nationals have been facing recently, we would like to remind you that amendments to Federal Law N 115-FZ dated 25.07.2002 entered into force on June 30, 2015.

Thin capitalization rules as set forth in Article 269 of the Russian Tax Code were significantly amended on February 15, 2016.

The Federal Labor and Employment Service of Russia (further “Rostrud”) repeatedly stated in 2006 – 2009 that employers are not permitted to set and pay salaries in foreign currency (Letters No.1688-6-1 dated 10.10.2006, No.1729-6-0 dated 28.07.2008, No.1145-ТЗ dated 11.03.2009 and No.1810-6-1 dated 24.06.2009).

New rules for reimbursement of costs for legal services are opening up broad prospects for recovery of debt of your clients in court. The Russian Supreme Court ruling of 21.01.2016 clarifies the procedure for reimbursement of costs incurred for court proceedings, and it is now easier for the winning party to a court case to get its costs for legal services reimbursed.