From 2024 changes in the Russian Tax Code (RTC) came into force with regard to information which should be disclosed within the notification about the controlled transactions. On December 28, 2024, the Federal Tax Service of Russia published Order No. ED-7-13/1088@ of 02.12.2024 “On the Approval of the Form, the Procedure for its Completion and the Format for Submitting Electronic Notification about Controlled Transaction” which contains new form of the Notification, instruction for its filling in and XML format in electronic form. The Order comes into force one month after its official publication (i.e. from January 28, 2025). The taxpayer who performed controlled transactions within 2024 should submit the Notification to the Russian Tax Authorities mandatory according to the provisions of the section V.1 of the RTC. It is required to submit the Notification for CY2024 in a new form before 20 May 2025 in XML format using electronic channels of communications.
The amendments are aimed at disclosing in the Notification more detailed information that the Russian Tax Authorities can receive now only from Russian taxpayers given the increasingly limited interaction with foreign tax authorities. First of all, such changes will affect taxpayers that perform cross-border transactions with goods according to the list of the Ministry of Industry and Trade (subclause 2 of clause 1 of article 105.14 of the RTC) that fall within special commodity groups (clause 5 of article 105.14 of the RTC):
- Oil and oil products
- Ferrous metals
- Nonferrous metals
- Mineral fertilizers
- Precious metals and precious stones
The Russian Tax Authorities want to receive details about movement of such goods and to get a clear understanding how value chain is built. From 2024 it is required to report not only the details about controlled transaction with special commodity groups actually performed, but also disclose the data about previous purchase/subsequent resale of such goods.
Kept provides an overview of the amendments to the form of the Notification that are reflected in the published Order, as well as comments on the clarifications on some methodological issues that the Order gives — would you please familiarise yourself via the link.
Failure to provide a Notification by the established deadline or inaccurate completion of certain details in it will result in a penalty of RUB 100,000, in accordance with the provisions of Article 129.4 of the RTC, starting from reporting year 2024. In addition, penalties may be imposed on officials — for example, CEO in accordance with article 15.6 of the Code of Administrative Offenses of the Russian Federation.
Preparation of Notifications taking into account the changes in the form will require additional labor on the part of taxpayers. To ensure proper completion and filing of a Notification we strongly recommend that you:
- perform a preliminary analysis of the perimeter of controlled transactions to have a clear understanding of the approaches and methods to be used in the preparation of TP documentation – non-compliance of data in the Notification and TP documentation may be treated as a risk indicator; if TP risks are identified – make adjustments before the end of the reporting period;
- set up accounting systems to optimize the collection of data to be disclosed in the Notification;
- determine in advance the approaches to collecting data on controlled transactions and, if necessary, set them as regulations applied at the Group level;
- determine how to prepare a Notification. If your own software is used, it should be modified in line with the current changes to the form of the Notification;
- in relation to controlled cross-border transactions involving goods on the list of the Ministry of Industry and Trade, it is recommended to establish business processes for interaction with foreign group counterparties in order to take steps in advance to obtain all the required information for completing the Notification, including the collection of data on the chain of movement of goods, since a taxpayer may not rely on the refusal of related parties to disclose information on the value chain.
Kept specialists start developing a specialized software for converting Notifications into XML format.
We will be delighted to answer any questions you may have, analyze each specific situation, and provide the following services:
- prepare and convert the Notification into XML in accordance with the updated requirements of the RTC, provided that the company/group provides all the necessary information;
- provide methodological support given the evolving practice of preparing and submitting Notifications.
