Russia submits draft law on automatic international exchange of tax information including documentation requirements

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The Russian Government on 20 July 2017, submitted the draft bill (Bill No. 231414-7) on the automatic international exchange of tax information to the Russian State Duma.

The draft bill proposes amendments to the Tax Code, which are necessary for ensuring the collection and exchange of information with competent bodies of foreign countries with a view to implementing the Convention on Mutual Administrative Assistance in Tax Matters. Thus, taxpayers forming part of an international group of companies are obligated to report to the tax authority their participation in the international group of companies and country-specific information, including a country-specific tax return, global documents on the international group of companies and national documents of the participant in the international group.

The new draft law proposes the following changes:

  • The new draft law proposes that the law will enter into force on 1 January 2018 and apply to financial periods of a multinational group commencing from that date. Thus, the Country-by-Country report and Master/Local file requirements will be effective for fiscal years beginning on or after 1 January 2018, although voluntary (parent surrogate) filing of CbC reports in Russia will still be available for prior years.
  • Under the new law, the period for the tax authority to request the global documentation has changed. The period permitted is not earlier than 12 months and no later than 36 months after the end of a financial year.
  • The draft law also proposes new penalties for failing to submit the Master file and the Local file in the amount of RUB 100,000, and the initial penalty exemption period is extended to 2020, including for CbC reporting and notification penalties.

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