Accounting
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Taxes
22.08.2025

Notice of participation in an international group of companies: procedure and deadlines 

Dear colleagues,

This is a reminder that the deadline for submitting Notice of Participation in an International Group of Companies (hereinafter, the “IGC”) is August 31, 2025, for groups whose financial year coincides with the calendar year.

Filing the notice is an obligation for Russian organizations and foreign companies that recognize themselves as tax residents of Russia, which are part of an IGC and meet the criteria defined in article 105/16-1 of the RF Tax Code.

Below, we detail the key requirements, deadlines, and content of this notice.

1. The notice must be submitted by all IGC participants that are taxpayers in Russia, except for foreign organizations that only receive income specified in article 309 of the RF Tax Code (e.g., dividends, interest on debt obligations, etc.).

2. Exemption from the obligation

Exemption from the obligation to file the notice is provided in the following cases:

✔ If the IGC’s parent company or the appointed participant (which are Russian entities or foreign companies that have recognized themselves as tax residents of the Russian Federation) has already filed a notice containing information about all group participants.

✔ If the notice has been filed by another IGC participant (a Russian entity or a foreign entity that has voluntarily recognized itself as a tax resident of the RF), which has been assigned this obligation by the parent company or a non-resident appointed participant.

3. Filing deadline

The notice must be submitted electronically no later than eight months from the end of the reporting period of the IGC’s parent company (article 105.16-2 of the RF Tax Code). For example, if the reporting period ends on December 31, the filing deadline is August 31 of the following year.

4. Content of the notice

The notice must include the following information as of the end of the reporting period:

✔ Name, OGRN (Primary State Registration Number), INN (Tax Identification Number), KPP (Tax Registration Reason Code) of each IGC participant.

✔ Participant status (whether the filer is the parent company or the appointed participant).

✔ Details of the parent company: name, country of tax residency, registration and tax codes, address.

✔ Details of the appointed participant (if applicable): similar to the data required for the parent company.

✔ Grounds for submitting the notice on behalf of all IGC participants.

✔ End date of the reporting period.

5. Notice format

Notices must be submitted to the tax authorities electronically in XML format, in accordance with the current form established by Order No. ММВ-7-17/124@ of the Federal Tax Service of Russia dated March 6, 2018 (as amended on July 16, 2020) “On Approval of the Format of the Notice of Participation in an International Group of Companies, the Procedure for its Completion and Submission in Electronic Form“.

6. Correcting errors in the notice

If errors or incomplete information are discovered, the taxpayer has the right to submit an amended notice. If this is done before the tax service discovers the inaccuracy, the participant is exempt from liability under article 129.9 of the RF Tax Code.

7. Liability for failure to file the notice

Failure to submit the notice by the deadline or submission of inaccurate information entails a fine of 500,000 rubles for each violation. 

 

Practical recommendations:

✔  Determine if your group qualifies as an IGC. To do this, check if the group meets the criteria of article 105.16-1 of the RF Tax Code: whether consolidated financial statements are prepared, whether the group’s consolidated revenue for the financial year preceding the reporting year exceeds the threshold established in the country of tax residency of the group’s parent company, and whether the group includes at least one tax resident and one non-resident of the RF;

✔  Monitor the deadlines closely; late filing leads to fines;

✔  Use the correct format; the notice must be submitted only electronically in the format approved by the Federal Tax Service of Russia.

Conclusion

Submitting a notice of participation in an IGC is an important responsibility of members of international groups. Compliance with the deadlines and requirements for the content of the notice will help to avoid fines and claims from tax authorities.

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    Updates in corporate law

    Dear colleagues,

    the summer of 2025 has been very busy in terms of legislative initiatives and changes. The field of corporate law is no exception.

    We would like to inform you about the updates in this area. For your convenience, we have summarized the key updates and innovations for LLCs and JSCs in the overview below.

    We have previously written about other important new developments that took effect in September 2024 and March 2025.

    Matryoshka companies

    Previously, Article 66 of the Civil Code of the Russian Federation, Article 7 of the Federal Law No. 14-FZ dd. February 8, 1998 “On Limited Liability Companies” and Article 10 of the Federal Law No. 208-FZ dd. December 26, 1995 “On Joint-Stock Companies” provided that a company cannot have another business entity consisting of one person as its sole participant/shareholder.

    This comprehended a “matryoshka” ownership structure: when one company owns 100% of the shares in the authorized capital of another, the latter owns 100% of the shares in the authorized capital of a third, and so on.

    One of the important reasons for this prohibition was to prevent risks to the state due to the nontransparency of such a structure.

    It was assumed that the “matryoshka” structure made it difficult to identify the ultimate beneficiary and could be used to evade taxes, hide assets, or avoid liability for obligations. In practice, to get out of this situation, many companies brought in a nominal participant with a minimal share (for example, 1% or less). Having such participant helped get around the legal ban, but when the company’s ownership structure changed, this participant sometimes had to be removed from the list of participants.

    On August 1, 2025, amendments to the abovementioned legal acts came into force.

    Now, individuals and legal entities can establish “matryoshka” companies and be their sole owners.

    The current wording of the law is as follows: a company may have as its sole participant/shareholder another business entity consisting of one person, unless otherwise provided by [federal law].

    The ban was lifted to make it easier for businesses to operate under sanctions. Of course, the reduced risk of violations due to the development of law (like liability for subsidiaries and controlled companies, as well as liability of controlling persons) and instruments of state control, including tax authority oversight, also played a role.

    According to the explanatory note to the amendments, this type of business structuring can be an effective tool for separating areas of activity, clearly dividing areas of responsibility among management, and creating a more transparent and logical business management system.

    It should be noted that the permission to create “matryoshka” structures was captured in the law without any restrictions.

    Certification of resolutions passed by the sole shareholder

    Also, on August 1, 2025, amendments to the legislation on joint-stock companies regarding the adoption of resolutions by the sole shareholder came into force.

    Clause 6 of Article 47 of the Federal Law No. 208-FZ dd. December 26, 1995 “On Joint-Stock Companies” now expressly states that, unless otherwise provided by the company’s articles of association, resolutions of the sole shareholder are not subject to notarization.

    Thus, it will no longer be necessary to amend the articles of association to exclude the requirement for such resolutions to be certified in a joint-stock company.

    Please note that no such updates have been made with regard to LLCs.

    Preemptive right to purchase a share

    Article 21 of the Federal Law No. 14-FZ dated February 8, 1998 “On Limited Liability Companies” has been amended with regard to the procedure for exercising the preemptive right to purchase a share in the authorized capital of such company.

    The main update is that the relevant rules provided for by law can now be changed in the company’s articles of association.

    Previously, a company participant who decided to leave was obliged to first offer his/her share for purchase to other LLC participants. If they refused to purchase the share, the participant was entitled to sell the share to third parties.

    Now, with the consent of all participants, the LLC’s articles of association may

    • exclude the preemptive right to purchase a share;
    • limit the circle of participants who can exercise this right;
    • determine the conditions under which participants may exercise their preemptive right to purchase a share or, on the contrary,
      be deprived of it.

    For example, the possibility of exercising the preemptive right by participants may be linked to the presence or absence of certain circumstances or certain deadline.

    At the same time, a prohibition or restriction on the preemptive right to purchase a share that was established by the articles of association personally in relation to the former participant does not apply to the new owner of his/her share.

    Amendments to the LLC articles of association regarding the preemptive right to purchase a share may be made by a unanimous resolution of all the participants. To exclude these amendments from the articles of association, at least 2/3 of the participants’ votes are required (unless a larger number of votes is provided for in the articles of association). These resolutions must be notarized.

    The amendments shall enter into force on September 01, 2025.

    We will be happy to provide additional comments at your request and advise you on this or any other topic.

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      Tax monitoring: procedure and conditions for switching to it

      Dear colleagues,

      In 2025, tax monitoring continues to gain popularity: approximately 740 companies from more than 20 industries already use tax monitoring, another 143 companies plan to join the project and a total of more than 13,000 companies comply with the program criteria (according to the portal https://налоговыймониторинг.рф/).

      Recently, we have noticed growing interest to this topic in the business community and in this review we have compiled answers to the most frequently asked questions about the procedure and conditions for applying the tax monitoring regime.

      Tax monitoring is a special form of tax control, a method of extended information exchange, whereby an organization provides the tax authority with real time access to its accounting and tax records.

      What are the advantages of tax monitoring?

      • this type of tax control allows you to forget about traditional audits by the Federal Tax Service.
      • no penalties or fines if you follow the reasoned opinion.
      • you can find out about existing errors and discrepancies identified by the Federal Tax Service in real time.

      Methods of information exchange:

      • providing access to the organization’s information systems;
      • by telecommunication channels through an electronic document management operator (until 01.01.2026, the Article 6 of the Federal Law No. 389-FZ of 31.07.2023);
      • providing access to an analytical datamart.

      An organization is eligible to apply tax monitoring if it complies with all of the following criteria (clause 3 of the Article 105.26 of the Tax Code):

      • the total amount of taxes for the previous year was at least RUB 80 million (VAT, excise taxes, personal income tax, income tax, mineral extraction tax, insurance contributions are added up, except for VAT and excise taxes, which are paid when goods are moved across the customs border of the EAEU);
      • income according to accounting (financial statements) for the previous year is at least RUB 800 million;
      • the book value of assets as of 31 December of the previous year is at least RUB 800 million.

      Important: compliance with one or two conditions does not entitle a business entity to apply tax monitoring. All three conditions are to be fulfilled.

      There are exceptions to every rule, so compliance with the above conditions is not required for organizations specified in the clause 3.1 of the Article 105.26 of the Tax Code of the Russian Federation:

      • residents of advanced development territories (ADTs),
      • participants in industrial clusters,
      • residents of special economic zones,
      • former members of consolidated groups of taxpayers,
      • state and municipal institutions, lottery operators.

      It is also important to note that on April 29, 2025 the Ministry of Finance published draft amendments to the Tax Code (02/04/01-25/00154001), which include measures to improve tax monitoring.

      The Ministry of Finance experts have proposed to weaken the requirements: in order to switch to tax monitoring, it will be necessary to comply with at least one of the criteria, for example, in terms of asset value, income or the amount of taxes paid.

      The switch to tax monitoring is voluntary. If your company complies with all of the above criteria, in order to participate you are to submit an application not later than September 1 of the year (clause 1 of the Article 105.27 of the Tax Code of the Russian Federation) preceding the year of introduction of monitoring, including:

      Until November 1 inspectors review the materials received and decide whether to perform tax monitoring or to refuse it, indicating the reasons for the refusal. Possible reasons for refusal are specified in the clause 5 of the Article 105.27 of the Tax Code of the Russian Federation, in particular:

      In conclusion we should note, that in tax monitoring interaction takes place in real time and remotely instead of traditional audits. The company itself provides the tax authority with access to its accounting data.

      This simplifies interaction with the Federal Tax Service, minimizes the risks of fines, penalties and additional charges. In addition, the company receives public recognition as a conscientious taxpayer and access to qualified support in complex tax issues. At the same time the company is obliged to be fully prepared to perform its activities openly and transparently and to comply with all reasonable opinions of the inspectors.

      In the following reviews we plan to focus in more detail on various aspects of tax monitoring.

      We will be glad to answer any questions you may have.

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        Legal protection of trademarks in Russia: risks and consequences of non-use

        Dear colleagues,

        Over the past year, international brands that have reduced their presence or left the Russian market have been registering trademarks in the Russian Federation, which has been widely covered in the media. Having received many questions from companies about the regulation of brand protection in the current situation, we decided to describe in more detail the mechanism of trademark protection in Russia, the existing risks, opportunities and options.

         

        National and international trademarks in Russia

        Russia protects both trademarks registered under the Madrid system (international registrations) and national marks registered with the Federal Service for Intellectual Property (Rospatent). 

        Russia recognizes conventional priority (Article 1507 of the Civil Code of the Russian Federation, Article 4 of the Madrid Agreement), which means protection of rights to a trademark registered in any Paris Convention country. 

        However 

        • the introduction of the parallel import regime has partially limited this protection for certain categories of goods;
        • legal protection of a trademark may be terminated early if the right holder does not use it for three consecutive years in respect of the goods concerned.

        This provision is set forth in Article 1486 of the Civil Code of the Russian Federation and corresponds to clause “c” of Article 5 of the Paris Convention for the Protection of Industrial Property dated 20.03.1883. 

         

        How does it happen?

        In accordance with clause 1 of Article 1486 of the Civil Code of the Russian Federation, legal protection of a trademark may be early terminated in respect of all or part of the goods for which it is registered, if the mark has not been used for three consecutive years.

        An interested person who has reasons to believe that the right holder does not use the trademark shall have the right to send him a proposal for voluntary withdrawal of legal protection.

        Such a proposal may contain a claim either to 

        • submit an application to the federal executive body in the field of intellectual property to waive the right to the trademark, or 
        • enter into an agreement on alienation of the exclusive right. 

        This proposal shall be sent not only to the right holder, but also to the address indicated in the State Register of Trademarks or the relevant international register.

        It is important to note that it is possible to send such a proposal only after three years from the date of state registration of the trademark. If within two months after receipt of the proposal the right holder does not take the abovementioned actions, the interested party is entitled within the next thirty days to apply to the court with a claim for early termination of legal protection of the trademark due to its non-use.

        At the same time, the legislation does not contain an exhaustive list of cases when a person may be recognized as an interested party. The court in each specific case assesses whether the claimant has a legitimate interest in terminating the legal protection of the unused trademark. Any person whose legitimate interests are affected by the existence of an unused registration may be acknowledged an interested party.

        Of course, the trademarks of foreign companies that left the Russian market in 2022 face particularly high risks of early termination of protection.

         

        Consequences of loss of legal protection

        If a trademark loses legal protection, there is a potential risk that third parties may register it on their names. 

        In this case, there is a risk that products marked with the trademark of the former right holder will appear on the market, as control over the brand will be lost. 

        Restoration of rights will require significant time and financial expenses.

         

        Current situation: risks

        The current situation with the possible consequences of the loss of legal protection of a trademark remains controversial. 

        Early termination of protection creates prerequisites for re-registration of a brand or registration of a similar designation. However, despite the significant number of applications duplicating or imitating foreign marks, Rospatent often refuses to register identical or confusingly similar marks held by well-known companies.

        Nevertheless, although the implementation of such brand interception is fraught with obstacles and at the moment the practice is ambiguous, and some examples of court practice already exist that are not in favor of the foreign right holder.

         

        Current situation: court practice

        A recent example of early termination of trademark protection is the ruling of the Intellectual Property Rights Court dated 30.10.2024 (case No. SIP-334/2024). The court satisfied the claim of LLC “R-Climat” against Telefonaktiebolaget LM Ericsson and terminated the legal protection of the company’s trademarks in respect of goods of the 11th class of International Classification of Goods and Services (equipment for ventilation, heating and air conditioning).

        The reason was non-use of the marks for three years, which created an opportunity for their re-registration by other persons.

        Another case in a similar situation is the case concerning registration of the trademark “Fantola” (No. 712275), owned by the Russian company “Drinks from Chernogolovka-Aqualife”. The Western right holder Coca-Cola tried to challenge Rospatent’s decision, claiming that the mark was confusingly similar to its brand. 

        Despite the authority’s initial rejection of the objections, the company appealed to the Intellectual Property Rights Court (IPRC). The court proceedings took an ambiguous turn: at first, the court recognized Rospatent’s actions as invalid, but eventually sent the case for a reconsideration which confirmed that the “Fantola” trademark could be used.

        This case demonstrates the complexity of such disputes and the lack of unambiguous judicial practice in matters of trademark similarity.

         

        What can be done?

        In order to reduce risks for companies, especially those that have left the Russian market, it is possible to consider maintaining registration or renewing the use of a trademark directly with Rospatent. 

        If registration/renewal of individual marks (e.g. a series or a family of similar trademarks) is done with a certain periodicity every 3 years, the loss of an older trademark will not entail the loss of other similar trademarks for use in the Russian Federation.

        Nevertheless, when deciding on the necessity of such a step it is important to evaluate the totality of factors and assess the degree of risk: the risk is highest if the right holder’s goods are not represented on the Russian market and are not available to Russian consumers for more than 3 years. 

        In this situation, formal registration of the trademark in the Russian Federation may not be sufficient, as the fact of use/non-use of the brand in the Russian Federation is of priority importance. Such trademarks should be actually used to show the good faith of the right holder.

        Thus, it is important to assess the whole issue in a comprehensive manner, taking into account all factors in each individual case.

        When considering all options, it is important to assess whether the following issues have been or will be resolved:

        1. Legal defense – whether there will be an opportunity to stop illegal use of the brand and counterfeit products.
        2. Right to sue – whether there will be the ability to recover compensation for infringement of exclusive rights.
        3. Preservation of market position – whether there will be protection against brand takeover and unfair competition.
        4. Flexibility to return the business – whether it will be possible to resume operations in the Russian Federation without losing trademark rights.

         

        Conclusion

        In the context of sanctions and changes in legislation, trademark rights holders need to actively monitor their use in Russia. Otherwise, there is a risk of losing rights, which may lead to serious commercial and reputational losses. Timely legal measures will allow you to retain control over your brand and avoid undesirable consequences.

        We will be happy to assist you in solving this task and answer your questions.

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          Prior period expenses for income tax purposes

          Dear colleagues,

          we would like to inform you of the planned changes in the tax accounting which are expected in the nearest time.

          As a general rule, according to the Article 54 of the Tax Code of the Russian Federation, if in the current tax period expenses relating to past periods are identified, they can be recognized in the current period.

          However, according to the position of the Ministry of Finance, reflected in the Letter dated 15.05.2025 № 03-03-06/1/47786, the expenses of previous years cannot be recognized in the calculation of income tax for the current period if in the previous period the tax rate was lower as this will lead to an artificial understatement of current tax liabilities. Where errors (misstatements) in the calculation of the tax base relating to previous tax (accounting) periods are identified in the current tax (accounting) period, the tax base and the amount of tax should be recalculated for the period in which these errors (misstatements) were made.

          The position of the Ministry of Finance is also confirmed by the latest bill 02/04/01-25/00154001, which amends the Article 54 of the Tax Code of the Russian Federation. The bill completes the Article 54 of the Tax Code with a provision prohibiting the recognition of expenses of previous periods in the current period if the tax rate of the current period is higher than the rate applicable in the period to which the errors relate.

          With great probability the bill will be adopted in the nearest time, in such case the approach described by the Ministry of Finance will be established at the level of the Tax Code of the Russian Federation.

          The planned date of coming into force of the amendments to Article 54 of the Tax Code of the Russian Federation is 1 January 2026. At the moment, when the amendments have not yet come into force, we recommend to follow the approach set out in the letter of the Ministry of Finance of Russia and include all expenses relating to periods earlier than 01.01.2025 in the adjusted declaration, rather than recognize them in the current period.

          We will be glad to answer questions arising from the specified changes.

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            A new stage of localization of work with personal data: changes since July 2025

            Dear colleagues,

            The improvement of legislation in the field of personal data protection continues.

            Since July 1, 2025 the amendments to the Article 18 of the Federal Law No. 152-FZ (introduced by the Federal Law No. 23-FZ from 28.02.2025), which impose additional restrictions for operators and processors of personal information, came into force.

            The updated provision explicitly prohibits the use of databases located abroad when collecting the data of Russian citizens: 

            “When collecting personal data, including through the information and telecommunications network Internet, recording, systematization, accumulation, storage, clarification (update, change), extraction of personal data of citizens of the Russian Federation using databases located outside the territory of the Russian Federation is not allowed, except in cases specified in the paragraphs 2, 3, 4, 8 of the Part 1 of the Article 6 of the present Federal Law.”

            Below we will analyze the key changes, consider the risks and offer recommendations for action.

             

            The scope of restrictions

            According to the direct interpretation of the article of the law (see above for the complete version), we can conclude that the new rules relate exclusively to the initial collection of personal data. 

            Subsequent cross-border data transfer is not prohibited – however, it is important to remember and take into account previously introduced requirements (see our review here and here). 

             

            Expanded range of responsible parties

            Previously the requirements applied directly only to personal data controllers, but now all data processors, such as HR providers, cloud storage services and electronic document management platforms are subject to control.

             

            High fines! 

            Non-compliance with the rules can lead to serious sanctions:

            • Primary violation – a fine of 1-6 million rubles (for legal entities), 100-200 thousand rubles (for company officials).
            • Repeated violation – 6-18 million rubles (for legal entities), 500-800 thousand rubles (for company officials).

             

             

            Recommendations

            Definitely, you should start with a process audit. It is necessary to analyze the current company IT infrastructure (including the location of databases and the physical location of servers), making sure that data collection takes place in the territory of the Russian Federation.

            It is important not to ignore all data collection channels: for example, the company’s website (often containing forms to fill out or analytical data collection services), mobile applications (if available), etc.

            It will be also necessary to check and update internal local regulations and policies, in particular, the regulation on personal data processing.

            We will be glad to answer your questions, help you with preparation of the necessary documentation and advise you on this and other issues.

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              Speech at the meeting of the Russian-German Chamber of Commerce and Industry

              Project Manager of the Controlling and Reporting Department Elena Kameneva took part in a joint meeting of the working groups on personnel, accounting and controlling of the Russian-German Chamber of Commerce.

               

              As part of the event dedicated to personnel and HR issues, Elena presented an expert report on  “Planning and controlling of personnel costs”. In the report Elena highlighted the key aspects of budget planning, shared practical cases and paid attention to typical mistakes that companies make when calculating personnel costs.

               

              Particular emphasis was placed on:

              ✔️ Methods for optimizing costs without reducing efficiency

              ✔️ Tools for controlling budget overspending

              ✔️ Planning “traps” and ways to avoid them

               

              The speech aroused keen interest among the participants and became the basis for a professional discussion.

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              Important! Increase of fines for violations in the field of personal data processing

              Dear colleagues,

              please note that starting from May 30, 2025, amendments to the Code of Administrative Offenses of the Russian Federation will enter into force, which will significantly increase fines for legal entities and individual entrepreneurs for failure to submit a notification to the Federal Service for Supervision of Communications, Information Technology and Mass Media (Roskomnadzor) concerning the processing of personal data of their employees (as well as other categories of persons whose data was received and is subject to processing). In this case, the processing of personal data means any actions with data, including collection, recording, systematization, storage, updating, distribution, deletion.

               

              These changes are relevant for all employers, since by default any organization or individual entrepreneur with employees processes the personal data of employees (full name, passport data, salary data, etc.), and therefore must be registered accordingly in the register of operators of Roskomnadzor.

              Prior to the aforementioned changes entering into force, organizations committing a violation of such rules could be subject to a warning or a fine of up to 5 000 rubles in accordance with Article 19.5 of the Code of Administrative Offenses of the Russian Federation. In practice, however, the supervisory authority would usually limit itself to requiring notification to be submitted within the specified time period.

               

              Starting from May 30, 2025, the fines for failure to submit a notification to Roskomnadzor will be as follows:

              – for company officials and individual entrepreneurs – from 30 000 to 50 000 rubles;

              – for legal entities – from 100 000 to 300 000 rubles.

              Therefore, if your company has not yet sent the relevant notification to Roskomnadzor, it must be submitted as soon as possible. You can check whether your company is included in the register of Roskomnadzor by following this link.

               

              The notification can be sent to the department on paper, through the Unified Identification and Authentication System on the internet Portal of Government Services, or in electronic form using a qualified electronic signature.

               

              We also recommend that you read the department’s comments and answers to frequently asked questions.

               

              We are ready to help prepare a personal data processing notification and support you in promptly sending it to Roskomnadzor.

               

              We will be happy to answer your questions.

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              Nadezhda Maskaeva

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              Сhanges in transfer pricing and notifications of controlled transactions

              Dear colleagues,

               

              A year earlier we have informed you of major changes in transfer pricing effective from 01.01.2024 (link). We kindly remind you the main aspects and inform of the recent innovations:

               

              1. Withholding tax on services of foreign related parties

              We kindly remind you that withholding tax of 15% shall on mandatory basis be withheld from services of foreign related parties – residents of the country with which the DTT has been suspended.

               

              On April 7, the Ministry of Finance officially updated the list of countries with relevant information of current DTTs, in particular, the information on the termination of the DTT with the UK on its initiative was added, in which regard a separate information message was also published.

              For transactions with companies from countries with continuing DTTs, it is necessary to study the terms of the international agreement.

               

              2. New format for notification of controlled transactions

              On December 28, 2024, the Federal Tax Service issued the Order No. ED-7-13/1088@ “On approval of the form, procedure for filling out and format for submitting a notification of controlled transactions in electronic form” dated December 02, 2024, and on March 13, 2025, the Tax Service issued clarifications (Letter of the Federal Tax Service of Russia dated March 13, 2025 No. ShYu-4- 13/2827@* (ШЮ-4-13/2827@) on ensuring the proper application of the Letter of the Federal Tax Service of Russia dated May 25, 2022 No. ShYu-4-13/6384@* (ШЮ-4-13/6384@).

               

              One of the key points is that for transactions proceeded after January 01, 2024, the taxpayer is to specify in the notification of controlled transactions (and in the documentation submitted at the request of the Federal Tax Service of Russia or in accordance with the paragraph 8 of the Article 105.15 of the Code) the applied transfer pricing method (as provided for in the Chapter 14.3 of the Code or a combination thereof) used to justify the market price level in the controlled transaction.

               

              The changes also imply the disclosure of more information about controlled transactions, including prices in transaction chains (applicable to previous purchase / subsequent sale) for certain categories of transactions (for instance, exchange goods).

               

              We kindly remind that for transactions proceeded in 2024, the notification in the new format is to be submitted not later than on May 20, 2025.

               

              Non-submission by a tax payer to the tax authority within the prescribed time limits a notification of controlled transactions proceeded within one calendar year, or submission by a taxpayer to the tax authority of a notification of controlled transactions including unreliable information, shall entail a fine of RUB 100,000. Non-submission by a taxpayer to submit documentation regarding a specific transaction (group of similar transactions) within the prescribed time limits shall entail a fine of RUB 500,000.

               

              3. Verification of transactions with a foreign “unrelated” counterparty

              We kindly remind that since January 1, 2024, transactions with “unrelated” companies registered in countries in the offshore zones list may be automatically classified as controlled transactions for transfer pricing purposes (since July 1, 2023, the list of offshore zones was expanded to 91 jurisdictions by the Order of the Ministry of Finance of Russia dated June 05, 2023 N 86n and includes, for example, the countries of the European Union, Great Britain, Japan, the USA).

              Regardless of the actual interdependence of the parties, the transaction will be recognized as controlled transaction if the income for the calendar year exceeds the limit of RUB 120 million.

               

              Exceptions are being made for transactions, where one of the counterparties is a resident or a tax resident of a foreign state with which the Russian Federation has a DTT, the effect of which was suspended by the Decree of the President of the Russian Federation, when:

              • transactions were concluded before March 1, 2022,

              • the procedure for determining prices and (or) pricing methods (formulas) applied in such

                transactions remain unchanged after March 1, 2022,

              • transactions are not recognized as controlled transactions in accordance with the criteria in

                effect as of March 1, 2022.

               

              4. Updated list of countries which tax authorities conduct an automatic exchange of information

              On December 20, 2024, the Federal Tax Service published an Order No. ED-7-17/915@ dated October 30, 2024 “On approval of the List of foreign states (territories) whose competent authorities automatically exchange country-by-country reporting”.
              We kindly remind that the effective order of the Federal Tax Service of Russia dated December 20, 2022 No. ED-7-17/1226@ became void with the adoption of the above-mentioned document.

               

              The current version specifies 45 countries and 10 territories with which automatic exchange is carried out, which is amended compared to the previous list in terms of the exclusion from this list of a number of “unfriendly” European countries, which have ceased to carry out automatic exchange of country-by-country reporting with the Federal Tax Service of the Russian Federation (for example, Germany, France, Luxembourg, Italy, Spain, Greece and other countries).

               

              We kindly remind that subsidiaries – residents of the Russian Federation, which parent companies are registered in jurisdictions with which automatic exchange has ceased, may have to submit a country-by-country reporting upon request from the tax authorities.

               

              Non-submission a country-by-country reporting within the within the prescribed time limits either submission of a country-by-country reporting including unreliable information entails a fine of RUB 100,000 for periods before 01.01.2024 and a fine of RUB 1,000,000 for periods starting from 2024 (the fine may be applied to one calendar year).

               

              We have been working with transfer pricing for many years and are engaged in preparing documentation for our clients.

              We will gladly support you in the process of preparing documentation and answer questions that arise in connection with the changes specified.

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              Olga Kireeva

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              Taxes
              07.04.2025

              Regular (annual) general meeting of LLC participants

              Dear Colleagues,

              please note that in accordance with Article 34 of the Federal Law dated February 08, 1998 No. 14- FZ “On Limited Liability Companies” it is necessary to hold an ordinary (annual) general meeting of LLC participants in the period from March 01 to April 30, 2025 to approve the results of the previous year (annual reports and annual accounting (financial) statements).

               

              Penalties may be imposed for failure to convene a meeting within the specified deadline. According to clause 11 of Article 15.23.1 of the Code of Administrative Offenses of the Russian Federation, unlawful refusal to convene or evasion from convening a general meeting, as well as violation of the requirements to the procedure for convening, preparing and holding general meetings of LLC participants shall entail the imposition of a fine. For officials (general directors) it ranges from 20,000 to 30,000 rubles, for legal entities – from 500,000 to 700,000 rubles.

               

              Previously we informed you about changes in the procedure for holding meetings of participants of Russian LLCs starting March 01, 2025. We would like to remind you that the legislation establishes a prohibition on holding the ordinary general meeting of participants as an absentee meeting. During the COVID-19 pandemic, absentee voting at the annual meeting was possible, but the prohibition is now back in force.

               

              In 2025, it is permitted to hold an annual general meeting of participants through combining absentee voting by ballot with a physical meeting (with some of participants present in person).

               

              We will be glad to support you in preparing and holding an ordinary meeting to approve the results of the year by the general meeting of LLC participants, as well as to prepare the relevant minutes of the meeting or a resolution of the sole participant of the company.

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              Your contacts on this topic:

              Maria Matrossowa

              Nadezhda Maskaeva

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