What do businesses think about tax amendments – Kommersant

The RSPP says that “the business community is grateful for the balanced approach: partial rather than complete suspension of the double taxation agreement, as well as for the Ministry of Finance’s readiness to mitigate the negative consequences for the economy.” The RUIE, of course, also agrees with the need to continue the dialogue with the department to maintain benefits for freight and international transport.

Another initiative, about changing approaches to transfer pricing (TP) for businesses, as noted by the RSPP, “raises great concern.” Its approval will lead to the fact that additional tax charges and fines may be several times higher than the deviation of the actual price from the boundary of the transaction price range. “This level of penalties is unprecedented for Russian taxation and is more consistent with foreign exchange regulation, while transfer pricing is not an exact science and assumes a large share of the Federal Tax Service’s discretion when deciding on price adjustments,” the association says. They fear that any exporter may face huge additional charges even if there is no intention to transfer the tax base abroad. Also, levying a withholding tax on the amount of additional transfer pricing charges will lead to double taxation of the same price adjustment (income tax and dividend tax) and to the possibility of additional tax on dividends in situations where dividends could not be paid even hypothetically: in transactions with subsidiaries or sister organizations, as well as independent counterparties.

The RSPP also asks the authorities to extend the moratorium on fines for failure to submit documents in relation to controlled foreign companies (CFCs) in the context of European service providers refusing to provide services to Russian citizens. The union notes that “the sanction pressure not only continues, but is also intensifying” – as a result, many foreign assets are actually frozen, which does not allow the preparation of CFC reporting.

Diana Galieva, Evgenia Kryuchkova