The State Duma approved in the second reading an increase in fines for the withdrawal of profits

State Duma deputies in the second reading approved a bill that increases fines for businesses by 2.5 times for withdrawing profits through intra-group transactions, should from the Duma electronic database.

The bill was submitted to the lower house of parliament on September 29, 2023.

According to the text of the bill, after the adoption of the document, fines for businesses for non-market prices in foreign trade transactions with related parties will increase from 40% to 100% of the amount of unpaid tax. Now fines cannot be less than 30,000 rubles, after the adoption of the law – less than 500,000 rubles.

Intragroup transactions are a business management tool that involves the transfer of a product or service from one subsidiary to another – for example, from a manufacturer to a trading company. Since 2012, companies must report to the Federal Tax Service about such transactions and confirm that prices were market prices and were not underestimated. If, during an inspection, the Federal Tax Service discovered a discrepancy, it could assess additional taxes based on the price it considered to be the market price.

That the authorities want to strengthen control over transactions between related parties, Vedomosti wrote The 20th of October. Previously, State Secretary, Deputy Minister of Finance Alexey Sazanov reportedthat the adoption of the bill will reduce the number of cases “when foreign exchange earnings from foreign trade transactions are not returned to Russia due to abuses by taxpayers through the use of non-market prices in transactions.”