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Russia: Russia adopts OECD BEPS 13 rules on three-tiered approach for transfer pricing documentation

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In December 2017, Russia passed into law the three-tiered approach for transfer pricing (TP) documentation in accordance with OECD BEPS Action Plan 13.

This approach applies to multinational enterprise groups (MNE groups) with a consolidated income of or exceeding RUB 50 billion ($877 million), close to the EUR 750 million ($898.4 million) threshold in BEPS Action 13.

These requirements took effect in 2017, while new local file requirements for MNE groups apply from 2018. The following is a brief overview.

Country-by-country reporting (CbCR)

Country-by-country reporting notifications must be filed within eight months from the end of the reporting fiscal year, and must state which MNE group company is responsible for filing CbC reports. One notification suffices for all Russian group members.

The main CbC report is due within 12 months from the end of the reporting fiscal year. If the CbC report has been filed in another jurisdiction and the Russian authorities can gain a copy under the automatic exchange procedure, there is no need to resubmit the reporting in Russia.

Non-Russian parent companies can report in foreign languages and may use the currency applied in their consolidated financial statements. The tax authorities will soon issue guidance on how to properly prepare CbCR reporting.

From 2020, the authorities may penalise non-submission or submission of inaccurate information, charging RUB 50,000 for CbCR notifications and RUB 100,000 for CbCRs.

Master file

Master file requirements generally match BEPS 13, though there are additional demands such as a requirement for descriptions of all pricing agreements and tax clarifications related to the allocation of income, including bilateral advance pricing agreements (APAs).

The tax authorities may request the master file after 12 months have passed from the last day of the reporting fiscal period, and the taxpayer should provide it in Russian within three months after receiving a request. From 2020, failure to submit within these deadlines will result in a fine of RUB 100,000.

Local file

Local firms that are part of MNE groups must prepare a local file in Russian for each group of controlled transactions with non-Russian counterparties that are members of the MNE group.

The local file is similar to TP documentation prepared on the calendar basis, and should refer to the Russian tax code's requirements and local benchmarking studies, if applicable.

Local files should also include information on a taxpayer's management structure, who receives management reports, the taxpayer's main competitors, argumentation supporting that prices are at arm's length, copies of material contracts, copies of APAs, and an audit report, if available.

Local files need only be submitted if requested. Requests may be received after June 1 of the year following the reporting calendar year. An extension is available for 2018 and 2019.

Failure to submit within the deadline leads to a fine of RUB 100,000 and the application of 40% penalties.

Please note that local file requirements do not cover other controlled transactions, such as domestic ones. Existing local TP documentation requirements still apply to these.

The above changes are new challenges for multinational companies doing business in Russia. To ensure compliance, we recommend taking action now.






Ilarion Lemetyuynen ( and Alexander Iyudin (

KPMG in Russia and the CIS

Tel: +7 (495) 937 44 44


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