authorities want to toughen penalties for understating the tax base – Kommersant

The authorities plan to strengthen control over transactions between related parties. In particular, it is planned to change the approach to calculating fines for violating transfer pricing rules. Discussions on amendments to the Tax Code are ongoing between the Ministry of Finance, the Federal Tax Service and large businesses, sources said “Vedomosti”.

According to the newspaper’s sources, the bill proposes linking the fine to the amount of adjustment to the tax base – that is, to the amount by which the company unreasonably underestimated the taxable amount as a result of using non-market prices (we are talking about amendments to Article 129.3 of the Tax Code). At the same time, the rate will be kept at the same level of 40%, but not from arrears, but from the base. The source clarified that the question of whether this approach will become universal or will apply only to transactions with non-residents is still being discussed.

As a justified price, the bill proposes to use not the maximum and minimum boundaries of the market price range, but the median value. This could increase the size of the tax base adjustment resulting from transfer pricing audits, the source said.

Another change concerns the approach of tax authorities to transactions with non-residents. Now transactions with interdependent and independent persons are subject to control if their subject is included in the list of the Ministry of Industry and Trade or is a foreign counterparty from the list of offshore companies, expanded this year to unfriendly countries (Article 105.14 of the Tax Code of the Russian Federation).

According to the amendments, if an outflow of the tax base is detected in such transactions abroad, in addition to a fine of 40% of its size, the company will pay tax at source, since the understatement will be considered hidden dividends.

Earlier, Kommersant found out that the Ministry of Finance’s bill on “adjusting” tax benefits under preferential regimes aroused objections – the Ministry of Economy, as well as in some regions in whose territory there are preferential tax zones, do not agree with it.

Read more about this in the material “The Ministry of Finance has entered the zone of disagreement”.