On 20 November 2013 for the first time Russian taxpayers should have filed with controlling authorities notifications on controlled transactions (“Notifications”) in accordance with the new transfer pricing rules. According to the Federal Tax Service taxpayers filed 5,000 Notifications with respect to operations performed in 2012. Notifications for 2013 must be filed by 20 May 2014.
According to the transition provisions the tax authorities are entitled to initiate transfer pricing audits for 2012 within a seven month period (from 1 December 2013 to 30 June 2014) and for 2013 – within an 18 month period (from 1 June 2014 to 31 December 2015).
As was repeatedly noted by tax authorities, one of the principal aims of the Notification is to provide the tax authorities with the necessary array of preliminary information which, together with other data on the activity of the company and its contractors accumulated by the tax authorities, will be used to decide whether to conduct a transfer pricing audit of the controlled transactions. In this regard the criteria used to make such a decision is rather interesting.
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