Transfer Pricing Practical Conference of C5

Transfer Pricing Practical Conference, organized by C5 in concert with leading Russian and international law firms and consulting companies, took place on March 27-28, 2012 in Moscow. Andrey Gorodissky & Partners were represented at the conference by Valentin Moiseev, head of the Taxation practice. Devoted to the most topical theme of Russian tax law – enactment of the new section of the Tax Code establishing transfer pricing rules – the conference gathered over a hundred delegates, including representatives of major Russian and international holding companies doing business in the oil & gas, machine building and other key sectors of Russian economy. The delegates shared their views and practical achievements in the sphere of performance by a taxpayer of the obligations (new for the Russian reality) to record transactions with affiliates, build an internal system of documents turnover for recording controllable transactions, establish and document procedures for controlling the market level of intra-group prices. Considerable attention was also paid to the institution of transfer pricing agreements (also new for Russian tax law) which is called upon to give more stability to the practice of tax control over transfer prices. Valentin Moiseev spoke on taxation matters connected with intra-group loan financing. Although the aspects of transfer pricing with respect to loan financing had not been drastically changed by the adoption of the new rules, the speaker noted toughening of the practice of application of undercapitalization rules and broadening of the scope of transactions subject to indebtedness control, touched upon some problems connected with the correlation of Russian undercapitalization rules and international double taxation treaties to which Russia is a party. During a debate on the theme the delegates discussed possible arguments of a taxpayer’s defense in court disputes connected with application of under capitalization rules.