What amounts of transactions in 2017 are controlled by these transactions?

What are the criteria for recognizing transactions as controlled for tax purposes. An individual entrepreneur is the sole founder of an LLC given, as an individual, applies the USNO, read in the article.

Question: LLC (general mode) sells IP goods. The individual entrepreneur is the sole founder of this LLC (as an individual), applies the USNO.

Answer: Transactions with an entrepreneur are not recognized as controlled if the annual amount of income from transactions does not exceed 1 billion rubles. The annual amount of income is determined by adding the income from all transactions with one person for a calendar year.

Criteria for recognizing transactions as controlled (for tax purposes)

Criteria for recognizing transactions as controlled (for tax purposes)

No later than May 20, notify the IFTS of controlled transactions of the previous year. What transactions are considered controlled, see the table.

Letter of the Russian Ministry of Finance No. 03-01-18/31603 dated 01.06.2015 “On recognizing transactions as controlled”

“The Department of Tax and Customs Tariff Policy considered the letter of the Federal Tax Service dated December 25, 2014 No. 13-3-03/0029 and on the issue of application
subparagraph 4 of paragraph 2 of Article 105.14 of the Tax Code of the Russian Federation (hereinafter referred to as the Code) informs the following.
According to
Article 105.14 of the Code, transactions between related parties are recognized as controlled transactions (taking into account the specifics stipulated by the said
article).

Interdependent companies have an excellent opportunity to manipulate prices, thereby lowering the tax base by adjusting the amount of income, expenses or losses for tax purposes. When redistributing income and expenses, structures in low-tax jurisdictions are successfully used.

Controlled transactions and annual turnover limits

Tax control over transfer pricing is carried out at the international level and at the level of national legislation. Since 2010, the Organization for Economic Co-operation and Development (OECD) Guidelines on transfer pricing for multinational corporations and tax authorities (OECD Transfer Pricing guidelines, 2010) have been in force. profit shifting).

The Declaration is the OECD's plan of action to combat base erosion and profit shifting. As part of the BEPS plan, it is planned to develop transfer pricing (TP) rules that will increase the transparency of transactions between companies by collecting additional information, as well as reduce costs for businesses.

In the Russian Federation, on January 1, 2012, Federal Law No. 227-FZ of July 18, 2011 (Law 227-FZ) came into force. Law 227-FZ, which supplemented the Tax Code of the Russian Federation with Section V.1 “Interdependent Persons. General provisions on prices and taxation. Tax control in connection with transactions between related parties. Pricing Agreement.

Its provisions are aimed, among other things, at preventing the withdrawal of tax profits outside the Russian Federation, excluding the possibility of price manipulation in transactions between interdependent taxpayers, taxpayers applying various taxation regimes within the country. The rules have replaced Art. 40 "Principles for determining the price of goods, works or services for tax purposes" and art. 20 "Interdependent persons" of the Tax Code of the Russian Federation.

Law 227-FZ consolidated the main "global" principle of transfer pricing regulation - the "arm's length principle".

The arm's length principle in transfer pricing

According to the arm's length principle, for tax purposes, the value of prices (payments) for transactions between interdependent and equivalent persons is recalculated in relation to market values, as if the companies were independent. Prices are not checked for all transactions in a row, but only for controlled ones.

What are controlled transactions?

For tax purposes, controlled transactions are:

1. Transactions between related parties (taking into account the specifics that are enshrined in Article 105.14 of the Tax Code of the Russian Federation).
2. Transactions (set of transactions) acquiring the status of controlled transactions as a result of equating them to transactions of related parties (Clause 1, Article 105.14 of the Tax Code of the Russian Federation).
3. Transactions recognized as legally controlled (clause 10, article 105.14 of the Tax Code of the Russian Federation)

We have combined the 2017 controlled transactions criteria for tax purposes in a table:

An example of calculating the sum criterion

Company "A" (RF) provides marketing services to Company "B" (RF) for a total of 300 million rubles. Company "B" manufactures and sells the products of Company "A" in the amount of 750 million rubles. Company "A" participates in the capital of Company "B", the share of this participation is more than 25%.

Question:
Is the transaction for Company A controlled?

Answer:
Yes it is. To determine the sum criterion for a controlled transaction between related parties, we must add 300 million rubles. (marketing) and 750 rubles. (products). Total = 1,050 million rubles. (more than 1 billion rubles).

Taxpayers should be aware that not all transactions are considered controlled transactions.

Regardless of whether the transactions satisfy the conditions provided for in paragraphs 1 - 3 of Art. 105.14 of the Tax Code of the Russian Federation, transactions are not considered controlled:

• the parties to which are members of the same consolidated group of taxpayers (with the exception of transactions the subject of which is a mined mineral recognized as an object of MET taxation, the extraction of which is taxed at a rate set as a percentage);
• parties to which are persons who simultaneously meet the following requirements:
  • registered in one constituent entity of the Russian Federation, do not have separate subdivisions in the territories of other constituent entities of the Russian Federation, as well as outside the Russian Federation, do not pay income tax to the budgets of other constituent entities of the Russian Federation;
  • do not have losses (including losses of past periods carried forward to future periods) taken into account when calculating income tax;
  • there are no circumstances for the recognition of their transactions as controlled in accordance with paragraphs. 2 - 7 p. 2 art. 105.14 of the Tax Code of the Russian Federation;
• and some others.

What taxes are subject to transfer pricing?

Very often, listeners ask the question: “Can all taxes be controlled by the tax authorities for transfer pricing”? The Tax Code contains a limited list of taxes, the completeness of which is controlled, namely:

1. Corporate income tax.
2. Personal income tax, which is paid in relation to income from entrepreneurial activity and private practice (Article 227 of the Tax Code of the Russian Federation).
3. MET - if one of the parties to the transaction is an MET payer, the subject of the transaction are minerals, the extraction of which is taxed at a tax rate set as a percentage.
4. VAT - if one of the parties to the transaction (organization or individual entrepreneur) is not a VAT payer or is exempt from fulfilling the obligations of a VAT taxpayer.

Methods for determining the market price

The most important and difficult question is how to apply the arm's length principle and determine in practice the market price of a transaction for tax purposes. There are several methods developed within the framework of the OECD for such an assessment, which create a conceptual basis for determining the price (Transfer pricing methods (methodologies)).

None of them can be considered universal (suitable for any situation), and as a general rule, one should choose the method that provides the most accurate estimate. The Tax Code of the Russian Federation recommends using 5 methods (Article 105.7 of the Tax Code of the Russian Federation):

1. The method of comparable market prices (is a priority in relation to other methods and can be applied if there is at least one comparable transaction in the relevant market), as well as if the necessary amount of information about such a transaction is available.
2. The resale price method (is a priority when purchasing goods from a related party and then reselling it without processing to an independent party).
3. Cost method (is a priority in transactions for the provision of services).
4. Comparable profitability method (may be used in the absence or insufficiency of information, on the basis of which it is possible to reasonably conclude that there is a necessary degree of comparability of the commercial and (or) financial conditions of the compared transactions and use the subsequent sale method and the cost method).
5. Profit distribution method (applied if it is impossible to use other transfer pricing methods or if the parties to the transaction under analysis own (use) rights to intangible assets).

The starting point in choosing a method is an understanding of the controlled transaction based on functional analysis. The components of such an analysis are the study of the functions of the parties to the transaction, the assets they use and the risks they take on.

Comparability of commercial and (or) financial terms of transactions and functional analysis are carried out taking into account the provisions of Art. 105.5 of the Tax Code of the Russian Federation, which define the characteristics of transactions necessary for analysis, taking into account the conditions, factors and other parameters, and using the information provided for in Art. 105.6 of the Tax Code of the Russian Federation.

The next stage of our study is to compare the terms of transactions between related parties with the terms of transactions between persons who are not related. The Tax Code of the Russian Federation allows the use of exclusively publicly available sources of information, as well as information about the taxpayer.

The Tax Code of the Russian Federation does not contain a specific list, which gives taxpayers some advantage in preparing documentation. The taxpayer himself chooses the sources of information! And then, if a dispute arises, the tax authorities must prove the legitimacy of the choice.

You can get services from us:

• - registration of notification on controlled transactions for the Federal Tax Service of the Russian Federation;
• - preparation of a package of transfer pricing documentation to justify the market price level and avoid penalties;
• - identify controlled transactions.

Who controls prices?

It would seem that everything is clear here. Price control is carried out by the federal executive body authorized to control and supervise taxes and fees. The Tax Code of the Russian Federation establishes a ban on monitoring the compliance of prices used in controlled transactions with market prices during on-site and desk audits (clause 1, article 105.17 of the Tax Code of the Russian Federation).

Nevertheless, arbitration practice has already accumulated on this issue, closely intertwined with the topic of unjustified tax benefits. We will present a selection of arbitral tribunals and findings on this topic in the next tax lawyers article.

Transfer pricing liability

We conclude the review with a reminder of the responsibility of the taxpayer. For non-compliance with the requirements of the Tax Code of the Russian Federation for controlled transactions, fines are provided:

• in case of non-payment or incomplete payment of tax amounts as a result of the application of "non-market" prices, a fine of 20% of the unpaid tax amount from 2014 is charged, and from 2017 - in the amount of 40% of the unpaid tax amount, but not less than 30,000 rubles . (Article 129.3 of the Tax Code of the Russian Federation);
• the penalty for failure to provide a notice of controlled transactions to the tax office will be 5,000 rubles. (Article 129.4 of the Tax Code of the Russian Federation) for each transaction.

Report on controlled transactions:

Notification of controlled transactions must be submitted by May 20 of the year following the reporting year. Those. the deadline for submitting notifications of controlled transactions for 2016 is until May 20, 2017, and for 2017 - until May 20, 2018.

If the revised notification is submitted before the moment when the tax authority revealed the error, the taxpayer is exempted from the penalty for false information in the notification. It's never too late to check yourself.

Documentation on controlled transactions may be requested by the tax authorities not earlier than June 1 of the year following the calendar year in which controlled transactions were made. At the same time, as part of a tax audit, a request for documentation on controlled transactions can take up to 3 years.

Exemption from penalties is possible if the taxpayer submits to the tax authority documentation substantiating the market price level.

Taxpayers have 30 days to provide requested transaction documentation.

In this article, we have only briefly outlined the main aspects of applying transfer pricing for controlled transactions. In our further reviews, we will talk in detail about the advantages of each price research method, symmetrical adjustments, arbitrage practice and many other features of transfer pricing in Russia.

Contact us and we will help you identify controlled transactions and, if necessary, prepare the necessary documentation.

Controlled transactions 2019 - criteria - the table with them given in our article has been developed taking into account the latest changes in the Tax Code of the Russian Federation. Read more about which transactions can be classified as controlled transactions, as well as what has changed in relation to controlled transactions in 2019, in this article.

Controlled transactions (criteria 2019): concept

Controlled transactions are understood to be civil law transactions made by citizens or legal entities, which, due to their compliance with the conditions established by law, are subject to inspection by tax authorities.

Controlled transactions include:

• transactions between related parties;
• other transactions equated to transactions of related parties;
• transactions that have acquired the status of controlled transactions through the issuance of a court decision of the Russian Federation as a result of their contestation by the Federal Tax Service of the Russian Federation.

The main document that should be followed when determining the criteria for recognizing a transaction as controlled, the procedure for reporting such a transaction, liability for its failure to comply, as well as methods and methods for exercising tax control, is the Tax Code of the Russian Federation (hereinafter referred to as the Tax Code of the Russian Federation).

Clarifications on certain issues related to the execution of controlled transactions and notification of their completion are also contained in the documents of the Federal Tax Service (Order No. ММВ-7-13/ dated 07.09.2018 [email protected], letter dated 13.04.2017 No. ED-4-13/ [email protected]), as well as acts of the Ministry of Finance of the Russian Federation (for example, letter dated 06/15/2017 No. 03-12-11/1/37167, etc.).

Controlled transactions equated to transactions between related parties

The law refers to interdependent persons citizens and (or) organizations whose economic ties have a direct impact on the conditions or financial results of their activities or the activities of the persons they represent. Details about the signs of interdependence are described in Art. 105.1 of the Tax Code of the Russian Federation).

The following are recognized as other transactions equated to transactions between related parties:

1. Several transactions for the sale (resale) of goods (carrying out work, providing services) concluded with the participation or through the mediation of persons who are not related to each other. At the same time, the transaction allows the presence of third parties that are not interdependent, which:

• do not carry out any auxiliary functions under these transactions, except for the sale (resale) of goods (work, provision of services) by one person to another person interdependent with him;
• do not take risks and do not spend their assets for the sale (resale) of goods (works, services) by one person to another person interdependent with him.

The above transactions are recognized as controlled only if the amount of annual income from transactions exceeds 60 million rubles. Moreover, for foreign trade contracts for goods of international exchange trade and contracts with residents of offshore zones, the amount is 60 million rubles. calculated for transactions with one (each separately) counterparty (clause 7 of article 105.14 of the Tax Code of the Russian Federation).

Criteria for recognizing transactions of related parties as controlled for tax purposes

Under the characteristics of controlled persons fall transactions of related parties that contain special conditions from Art. 105.14 of the Tax Code of the Russian Federation.

First of all, all participants and beneficiaries in a transaction between related parties must be registered or have tax residency in the Russian Federation. Further, the law establishes 2 types of requirements according to which a transaction can be classified as controlled:

1. Compliance with the amount of profit specified in the law for the calendar year (hereinafter referred to as the amount of profit). For related parties, this amount is over 1 billion rubles.
2. Participation in the transaction of a person who is obliged to pay or is exempt from paying a certain type of tax, depending on the specifics of his activity.

What transactions of related parties are recognized as controlled

Thus, a transaction in which all participants and beneficiaries are registered in the territory of the Russian Federation or are its tax residents is considered to be controlled if:

• the subject of the transaction is a mineral extracted by a participant in the transaction, which pays a tax on the extraction of minerals (MET) at a rate calculated as a percentage;
• one of its participants produces hydrocarbons at a new offshore field and includes the profit (loss) on such a transaction in the tax base when calculating income tax in accordance with Art. 275.2 of the Tax Code of the Russian Federation, and the other party to the transaction is not the payer specified in paragraph 1 of Art. 275.2 of the Tax Code of the Russian Federation either does not take into account its income / expenses on this transaction under Art. 275.2 of the Tax Code of the Russian Federation.
• any of its participants uses the unified agricultural tax (UAT) or pays the unified tax on imputed income for certain activities (UTII), provided that the controlled transaction is related to this activity, and other participants in the transaction (one or more) do not use these tax regimes.
• at least one of the participants in the transaction (unlike others) has the legal right not to pay corporate income tax (For more information on the procedure for paying corporate income tax, see the article Income tax under OSNO).

In 2018 - 2019, the list of transactions that are recognized as controlled transactions with an income of 1 billion rubles also includes new conditions, namely: one of the parties to the agreement must be a research corporate center in accordance with the law "On the Skolkovo Innovation Center" dated September 28. 2010 No. 244-FZ and has the right not to pay value added tax (VAT) in accordance with Art. 145.1 of the Tax Code of the Russian Federation. From 01/01/2019, the list has been replenished with transactions in which at least 1 of the participants pays tax on additional income from the sale of hydrocarbons and income/expenses from the transaction are taken into account when calculating this tax.

Criteria for controlled transactions - 2019: table

For convenience, the criteria for controlled transactions are summarized in the table below.

2017 is the fifth year in which entrepreneurs prove that prices were market prices in transactions made with their subsidiaries.

Controlled transactions are transactions that are made between persons dependent on each other, for example, participants in the same holding company in the presence of any criterion set forth in Article 105.14 of the Tax Code of the Russian Federation. The law provides for keeping records and control of such transactions and submitting information to the tax authority at the place of registration. Failure to comply with the requirements of the law entails the imposition of penalties. These transactions are controlled in order to prevent underestimation of prices, the taxable base, and, accordingly, taxes.

Criteria for controlled transactions

The types of transactions and the amounts of income from transactions made with one person (related persons) for the corresponding calendar year, above which the said transactions are recognized as controlled, are listed in Article 105.14 of the Tax Code of the Russian Federation. The amount of income from transactions for a calendar year is determined by adding the amounts of income received from such transactions with one person (related persons) for a calendar year.

So, transactions between Russian related parties are recognized as controlled if at least one of the following circumstances exists:

1. The amount of transactions between persons for a calendar year is more than 1 billion rubles;
2. One of the parties to the transaction is a MET payer and the subject of the transaction is the extracted mineral;
3. At least one of the parties to the transaction applies the ESHN or UTII, while the other does not;
4. At least one of the parties to the transaction applies the 0% income tax rate, and the other is not exempt from paying this tax in accordance with paragraph 5.1 of Article 284 of the Tax Code of the Russian Federation;
5. At least one of the parties to the transaction is a participant in preferential taxation for income tax, and the other is not
6. If one of the parties to the transaction is a taxpayer specified in paragraph 1 of Article 275.2 of the Code, and takes into account income (expenses) from such a transaction when determining the tax base for corporate income tax in accordance with Article 275.2 of the Code, and the other party is not such a taxpayer
   or is, but does not take into account income (expenses) on such a transaction in accordance with the specified article.
7. at least one of the parties to the transaction is a participant in a regional investment project that applies a reduced income tax rate to the budget of the subject, or a 0% rate to the federal budget.

The most attractive for the tax authorities are transactions that have many intermediaries, as well as transactions with non-residents of the Russian Federation. Both Russian and foreign companies can fall under the close attention of the tax service.

The following transactions are equated to transactions between related parties:

1. A set of transactions for the sale of goods (works, services) between a significant number of intermediaries that are not interdependent, but do not perform any additional functions, do not bear risks in their activities, do not use any assets, in a word, formal intermediaries.
2. Transactions in the field of foreign trade in goods of world exchange trade;
3. Transactions, one of the parties of which is a person who is a resident of the state, included in the list of states and territories approved by the Ministry of Finance of the Russian Federation in accordance with clause 1, clause 3, article 284 of the Tax Code of the Russian Federation.

Transactions between related parties and equivalent transactions not recognized as controlled

All exceptions to uncontrolled transactions between related parties are specified in paragraph 4 of article 105.14 of the Tax Code of the Russian Federation.

These are the cases:

1. If a transaction is carried out between members of the same consolidated group of taxpayers, with the exception of MET transactions;
2. The parties to which are persons who simultaneously meet the following requirements:
   - these persons are registered in one subject of the Russian Federation;
   - these persons do not have a EP in the territory of other subjects of the Russian Federation, and outside of Russia;
   - these persons do not pay income tax to the budgets of other subjects of the Russian Federation;
   – these persons do not have any losses accepted in the calculation of income tax;
   - there are no circumstances for the recognition of transactions made by these persons as controlled in accordance with paragraphs. 2-7, clause 2 of article 105.14 of the Tax Code of the Russian Federation;
3. Transactions between the taxpayers specified in paragraph 1 of Article 275.2 of the Code, made by them in the course of activities related to the production of hydrocarbons at a new offshore hydrocarbon field, in relation to the same field;
4. Interbank loans (deposits) with a term of up to seven calendar days (inclusive);
5. In the field of military-technical cooperation of the Russian Federation with foreign states, carried out in accordance with the Federal Law of July 19, 1998 N 114-FZ “On military-technical cooperation of the Russian Federation with foreign states”.

Domestic transactions with related parties

These transactions between related parties are described in clause 2 of article 105.14 of the Tax Code of the Russian Federation. They are provided with threshold values ​​for the amounts of income from transactions with one person (related persons), if they are exceeded for the corresponding calendar year, transactions between these persons are recognized as controlled.

More than 1 billion rubles
The amount of income from transactions with one person (related persons) for a calendar year.

More than 100 million rubles
The amount of income from transactions, one of the parties to which is a person applying one of the special tax regimes in the form of UAT or UTII.

More than 60 million rubles
The amount of income from transactions between related parties listed in paragraphs 2,4,5, paragraph 2 of Art. 105.14 of the Tax Code of the Russian Federation (with MET payers; with organizations exempt from income tax or applying a zero rate for this tax; with residents of special economic zones

Foreign economic transactions

Foreign economic transactions between related parties are recognized as controlled, regardless of the amount of income from such transactions for the corresponding calendar year. Foreign economic transactions are transactions where one of the parties is a foreign organization.

Foreign economic transactions specified in paragraphs 2 and 3 of paragraph 1 of article 105.14 of the Tax Code of the Russian Federation also fall under tax control. These are transactions with a specific range of goods: with oil and products of its processing, ferrous and non-ferrous metals, mineral fertilizers, precious metals and precious stones. As well as transactions with offshore companies.

Notice of controlled transactions

If the taxpayer falls under the criteria for conducting controlled transactions, then he needs to report this to the tax authority. To do this, a Notification of controlled transactions made, for example, in 2016, by May 20, 2017, is submitted. The notification can be submitted either on paper or electronically to the tax authority at the place of registration. The notification form was approved by order of the Federal Tax Service of Russia dated July 27, 2012 No. ММВ-7-13/ [email protected]

If the tax authority establishes the fact of inaccurate information in the Notice, then it is inevitable to bring to administrative responsibility.
For failure to submit the Notice or for false information in it, the taxpayer is subject to tax liability in accordance with Article 129.4 of the Tax Code of the Russian Federation in the amount of 5,000 rubles.

The notice consists of a title page and 4 sections:

1. section 1A;
2. section 1B;
3. section 2;
4. section 3.

If the notification is submitted in relation to transactions with legal entities, then section 2 is filled out in relation to transactions with individuals, individual entrepreneurs, notaries, etc. – section 3.
Order of the Federal Tax Service of the Russian Federation dated July 27, 2012 No. ММВ-7-13/ [email protected] approved the procedure for completing the Notification of Controlled Transactions form. For high-quality filling of the Notification, you can use the services of specialists in this field.

Changes in controlled transactions in 2017

From January 1, 2017, the list of transactions that are not recognized as controlled transactions has been increased. This change was introduced by the Federal Law of November 30, 2016 No. 401-FZ.

Now the following transactions will not be recognized as controlled:

1. To provide guarantees (guarantees) if all parties to such a transaction are Russian organizations that are not banks;
2. To provide interest-free loans between related parties, the place of registration or place of residence of all parties and beneficiaries for which is the Russian Federation.

This means that participants in these transactions from January 1, 2017 do not have to notify the tax authorities of their completion and the Federal Tax Service of Russia will not be able to control the prices used in these transactions for tax purposes.

Codes of controlled transactions

Section 1A of the Notification contains information on each controlled transaction in the reporting period or on a set of transactions of the same type, in addition, information on the financial conditions of these transactions is indicated. You need to fill in as many sheets of section 1A as the number of transactions (or sets of similar transactions) were concluded. When filling out the Notice, various codes are used, which are given in the order of the Federal Tax Service of July 27, 2012 No. ММВ-7-13/524 @.

Thus, in paragraphs 121-124 and in paragraphs 131-135, each field of the Notification shall indicate the corresponding figure according to the code of the basis for classifying the transaction as controlled in accordance with Article 10514 of the Tax Code of the Russian Federation in accordance with Appendix No. 1

Code of the basis for classifying the transaction as controlled

How and when a tax audit of controlled transactions is carried out

In accordance with Art. 105.17 of the Tax Code of the Russian Federation, the correctness of the application of prices for tax purposes is controlled by employees of the Federal Tax Service during the so-called special checks.

Special checks may be carried out on the basis of:

1. notifications of controlled transactions sent by organizations and individual entrepreneurs to tax inspectorates;
2. notifications of tax inspectorates conducting on-site and desk audits, tax monitoring;
3. when controlled transactions are identified during repeated field tax audits conducted by the Federal Tax Service of the Russian Federation.

If an organization makes controlled transactions, then it may be subject to a special check by representatives of the Federal Tax Service of the Russian Federation.

If, as a result of the audit, facts of deviation of the price applied in the transaction from the market price were revealed, which led to an underestimation of the amount of tax, within two months from the date of drawing up a certificate of the audit, the officials who conducted the audit must draw up an Audit Report, sign it by the taxpayer and hand over. Further, the procedure for the implementation of audit materials is the same as when conducting field tax audits. Objection of the taxpayer, consideration of materials, adoption of a decision based on the results of the audit.

Controlled transactions are transactions in which the tax authorities can verify that the price is within the range of market prices. Transactions in this case mean the actions of citizens and legal entities aimed at establishing, changing or terminating civil rights and obligations (letter of the Ministry of Finance of Russia dated 06.06.2012 No. 03-01-18 / 4-70).

The group of transactions between related parties includes transactions where all parties and beneficiaries are registered in Russia and transactions where all parties and beneficiaries are tax residents of the Russian Federation. These transactions are considered controlled if at least one of the following conditions is met.

It should be noted that the court may recognize a transaction as controlled even if it does not have the above characteristics. This is possible if there are sufficient grounds to believe that this transaction is included in a group of similar transactions made in order to conceal a controlled transaction.

Organizations and individuals that are parties to a transaction are entitled to independently recognize themselves as related parties for tax purposes, if the relationship between them may affect the terms and (or) results of transactions.

Expand description

Deadline for submission of notification of controlled transactions

Notification of controlled transactions is submitted no later than May 20 of the year following the reporting year(Clause 2, Article 105.16 of the Tax Code of the Russian Federation). In the event that this day is a weekend, the due date is postponed to the next business day.

June 1 of the year following the calendar year in which controlled transactions were made- the date from which the tax authorities have the right to request documentation regarding a specific transaction or a group of similar transactions (clause 3 of article 105.15 of the Tax Code of the Russian Federation).

New form of notification of controlled transactions - when will it be?

At present, the Federal Tax Service of Russia has developed a draft order to amend the form and procedure for filling out a notice of controlled transactions (project ID 02/08/04-17/00063938). The new form of notification of controlled transactions will be applied to transactions made starting from January 1, 2018 (Letter of the Federal Tax Service of Russia dated March 22, 2018 N ED-4-13 / [email protected]).

Thus, in order to report on controlled transactions for 2017, it is necessary to use the previously valid form (KND 1110025), approved by Order of the Federal Tax Service of Russia dated July 27, 2012 No. ММВ-7-13/ [email protected] . The order also approves the format of the report in electronic form and the procedure for filling out the form.

How do I complete the Controlled Transaction Notice?

The Controlled Transaction Notice Form contains 4 sections that are not required for all companies. The table below provides a brief description of the sections and their purpose.

Download Controlled Transaction Notification Form PDF

Download Sample Controlled Transaction Notice Form PDF

Generate a notification of controlled transactions in 1C, upload it to the program and send it to the tax office!

If you yourself discovered inaccuracies and errors in your report after sending it, try to send an updated notification to the tax authority as soon as possible, this will allow you to avoid a fine for inaccurate information.

The Supreme Court of the Russian Federation (clause 10 of the Review, approved by the Presidium of the Supreme Court of the Russian Federation on February 16, 2017) determines that a fine for false information can only be imposed if the organization incorrectly indicated in the report:

• the year for which information is provided,
• subject of transactions
• information about participants in transactions and the amount of income (expenses) on controlled transactions.

Errors in other data in the notification of controlled transactions allow the tax authorities to conduct an initial analysis of the report and decide on the need for in-depth control.