The Russian transfer pricing provisions have been in force since 1 January 1999. However, new transfer pricing regulations which contain significant changes will be introduced, to be effective from January 1, 2012.
Vladimir Starkov from NERA Economic consulting in Chicago explains that the proposed changes contain definitions of related parties and controlled transactions. They also list sources of information to be used by the tax authorities and taxpayers in selecting comparable transactions and comparable companies and they go so far as to provide recommended profit level indicators. The propose measures also set out the acceptable transfer pricing methods for calculating the arm's length range of prices and profits.
Importantly, the proposed rules introduce a requirement for taxpayers to notify the local tax authorities about their international related party transactions within a prescribed timeframe.Vladimir explains that the information in relation to an income year must be provided by May 20th of the following year.
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