The Finance Ministry has issued a new version of the draft law on 6th September 2016 regarding BEPS Action 13 implementation. The draft law proposes the following topics:
BEPS related compliance:
Documentation requirement: Master file: As per the new version of the draft law, Master file is obligatory only for Russian parented groups. A master file should include a full list and key terms of all intercompany agreements relative to the controlled transactions and a full functional analysis, whereby the OECD recommendation is to require disclosure of only service agreements and a brief functional analysis.
Local file: As per the new version of the draft law, Russian group members will be required to submit a local file which will be needed only for transactions with foreign group members qualifying as ”related parties” under Russian transfer pricing law.
CbC reporting requirement: General rule: The Russian Ministry of Finance issued a new version of the draft law on 6 September 2016 regarding the introduction of country-by-country reporting in Russia. The new reporting requirements is in line with the Organization for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting (BEPS) Action 13 Final Report. It will be applicable for the 2017 financial year to international groups whose revenue totals RUB50 billion (approx. US$777 million) or more. Voluntary reporting is possible for financial years prior to 2017.
Penalty for non-compliance: Failure to submit notifications or to submit inaccurate information may be subject to a penalty of RUB50,000. Failure to submit a CbC report, a master file or a local file or to submit inaccurate information may be subject to a penalty of RUB100,000 for each of the three types of the reporting. For violations identified in 2017 through 2019, there would be a grace period during which fines should not be imposed.
