- January 31, 2019
Who Is Required to Submit the Additional Reporting
From 2018, Russian organizations that are part of international groups of companies must annually submit additional documentation to the tax authorities ― the so-called “three-level reporting” on transfer pricing. This includes:
- notice of participation in an international group of companies;
- country data on such international group of companies, which consist of a country report, and global and national documentation.
An international group of companies is recognized as a set of organizations and (or) foreign structures without formation of a legal entity, interconnected through participation in capital and (or) control, for which all of the following conditions are simultaneously met:
- in respect of them, consolidated financial statements are prepared in accordance with the requirements of legislation on accounting or the requirements of stock exchanges, including foreign stock exchanges;
- the group simultaneously includes:
- at least one organization (foreign structure without formation of a legal entity) recognized as a tax resident of Russia or operating in Russia through a permanent representative office;
- at least one organization (foreign structure without formation of a legal entity) not recognized as a tax resident of Russia or recognized as a tax resident of Russia and carrying out activities in a foreign country through a permanent representative office.
The obligation to provide the above documents is established for international groups for which the total amount of income (revenue) for the previous reporting period according to the consolidated financial statements is:
- if the parent company of the group is recognized as a Russian tax resident, more than RUB 50 billion;
- if the parent company of the group is a tax resident of another state, more than the amount established by the legislation of such foreign state to submit a country report to the competent authority of the foreign state.
Foreign organizations that receive only the income specified in Art. 309 of the Tax Code of the Russian Federation are not recognized as taxpayers/members of an international group of companies that have a duty to provide documentation.
What Exactly Must Be Provided to the Tax Authorities
For fiscal years starting in 2017, taxpayers are required to submit:
Notice of Participation in an international group of companies (hereinafter― the “Notice”).
The Notice must be submitted no later than 8 months from the date of the end of the reporting period of the parent company of the group. If the Notice was filed by the parent company or its authorized representative in respect of all members of the group, then the other participants are exempted from this obligation.
The Notice must be submitted in the established format and may be filed only in electronic form.
Country information for an international group of companies:
(а) Global documentation for an international group of companies (Master file).
Global documentation is submitted in free form and should reflect information on the ownership structure, description of activities and key products, functional analysis of the IGC members, strategy, etc.
(b) Country report on the states (territories) whose tax residents are members of the international group of companies (country-by-country report).
Country reports are submitted by the parent company of the group or its authorized participant (Russian organization or tax resident of the Russian Federation) in Russian, indicating the values of the cost indicators in Russian rubles.
(c) National documentation of a member of an international group of companies (Local file)(submitted starting from the fiscal year 2018).
National documentation is submitted in free form by a participant of the international group of companies (resident of Russia), in relation to controlled transactions with the participation of foreign entities.
In 2018, Awara lawyers successfully filed Notices of Participation in an international group of companies for their clients. If your company falls under the criteria for submitting the new reporting, we will help you to submit the Notice in electronic form.
 Federal Law No. 340-FZ dated November 27, 2017 “On amendments to Part One of the Tax Code of the Russian Federation in connection with the implementation of international automatic exchange of information and documentation on international groups of companies”
 According to para. 1 Art. 105.15 TC RF