Related persons and controlled transactions for tax purposes

On January 1, 2012, the section of the Tax Code of the Russian Federation “Interdependent Persons” came into force. The section regulates tax control over transactions between related parties. Its purpose is to control tax evasion through the use of transfer prices. For this purpose, the Arm's length principle, generally accepted in world practice, was used. How it works?

Interrelated companies form a holding. They set prices different from market prices. Then they begin to manipulate prices, lowering the tax base by adjusting the amount of income, expenses or losses for tax purposes. They can use structures in low-tax jurisdictions. The law makes it possible to identify such schemes, equate transactions to market values, and charge taxes.

Tax authorities now have the right to check transactions concluded between related parties to ensure that the transaction price corresponds to market prices. The procedure for determining market prices and comparing them with the transaction price is regulated by Articles 105.3 – 105.6 of the Tax Code of the Russian Federation. Transaction prices are monitored to verify the completeness of calculation and payment of taxes in connection with transactions between related parties. The audit is carried out in relation to the following taxes: corporate income tax, personal income tax paid by individual entrepreneurs, mineral extraction tax calculated at a rate expressed as a percentage, and VAT.

Related Persons

Interdependent persons are persons who can influence the conditions and (or) results of transactions (Article 105.1 of the Tax Code of the Russian Federation). Such persons are recognized as:

2.1. Organizations

The general principle is a share of more than 25%, influence of more than 50%

• If one organization directly or indirectly participates in another organization and the share of such participation is more than 25%;
• If the same person directly or indirectly participates in organizations and the share of such participation in each organization is more than 25%;
• If in organizations, by decision of the same individual (or an individual together with his interdependent persons), the following may be either already appointed or elected: sole executive bodies of organizations, or at least 50% of the composition of the collegial executive body, board of directors (supervisory board) ;
• If in organizations the same individuals (individuals together with their interdependent persons) make up more than 50% of: the composition of the collegial executive body, board of directors (supervisory board);
• If the powers of the sole executive body in organizations are exercised by the same person.

2.2. Individuals:

General principle: relatedness, subordination or dependence

• If one individual is subordinate to another individual due to official position;
• Dependent persons of an individual: his or her spouse, parents (including adoptive parents), children (including adopted children), full and half brothers and sisters, guardian (trustee), ward.

2.3 Other grounds:

• If the relationship between persons has signs of interdependence and the persons themselves have recognized themselves as interdependent;
• According to the court decision, if there are signs of interdependence from paragraph 1 of Art. 105.1 Tax Code of the Russian Federation.

Which companies are not interdependent?

Two situations are separately named when organizations cannot be considered dependent.

The first situation is the direct or indirect participation of the Russian Federation, its constituent entities and municipalities. In other words, companies in whose authorized capital there are shares owned by the state, regions or municipalities are not considered interdependent. However, they may be considered dependent on other grounds - for example, if one company participates in another and the share exceeds 25 percent.

The second situation in which organizations cannot be considered interdependent is when certain persons influence transactions due to their superior position in the market, or for other reasons determined by the characteristics of the transactions. Such influence is not a basis for recognizing interdependence.

Types of controlled transactions

3.1 Transactions between related parties who are non-residents of the Russian Federation;

3.2 On the transaction side (clause 1 of Article 105.14 of the Tax Code of the Russian Federation):

• Technical transactions, i.e. used by third parties. A set of transactions is equivalent to a transaction between interdependent persons with the participation (through mediation) of third parties, provided that such third parties do not perform any additional functions, with the exception of organizing the sale (resale) of goods (performance of work, provision of services) by one person to another person, not assume no risks and do not use any assets to organize implementation;
• Transactions in the field of foreign trade in goods of global exchange trade;
• Transactions with foreign interdependent persons, namely with one of the parties to which is a person whose place of registration (residence, tax residence) is a state or territory included in the list of the Ministry of Finance.

Limit: the amount of income from a transaction between persons (or the amount of a transaction with one person) must exceed 60 (sixty) million rubles per year.

3.3 Based on the circumstances of the transaction (clause 2 of Article 105.14 of the Tax Code of the Russian Federation):

This rule is only for Russian companies, i.e. The place of tax residence is the Russian Federation.

Transactions between related parties are considered controlled if:

1. the parties apply different corporate income tax rates;
2. one of the parties to the transaction is a taxpayer of the mineral extraction tax, calculated at a tax rate established as a percentage, and the subject of the transaction is the extracted mineral resource, which is recognized for the specified party to the transaction as an object of taxation with the mineral extraction tax, the extraction of which is taxed at the tax rate , set as a percentage;
3. one of the parties to the transaction is a taxpayer applying one of the following special tax regimes: Unified Agricultural Tax or UTII, while among other persons who are parties to the specified transaction, there is a person who does not apply these special tax regimes;
4. one of the parties to the transaction is exempt from the obligations of a taxpayer of corporate income tax;
5. the transaction simultaneously satisfies the following conditions: 5.1. one of the parties to the transaction is a taxpayer under Article 275.2 of the Tax Code of the Russian Federation (license for the use of a subsoil plot or operators of a new offshore hydrocarbon deposit) 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 Tax Code RF; 5.2. any other party to the transaction: - or is not a taxpayer Art. 275.2 Tax Code of the Russian Federation; - or is a taxpayer under Art. 275.2 of the Tax Code of the Russian Federation, but does not take 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 Tax Code of the Russian Federation;
6. one of the parties to the transaction is a corporate research center in innovation and others);
7. one of the parties to the transaction applies an investment tax deduction for corporate income tax during the tax period (Article 286.1 of the Tax Code of the Russian Federation);
8. one of the parties to the transaction is a taxpayer of the tax on additional income from the production of hydrocarbon raw materials and income (expenses) from such a transaction are taken into account when determining the tax base for the tax on additional income from the production of hydrocarbon raw materials.

Limit: the amount of income from a transaction between persons (or the amount of a transaction with one person) must exceed 1 (one) billion rubles per year.

Completeness of calculation and payment of individual taxes

In tax legislation, in matters of taxation of transactions that are carried out between companies or persons recognized for one of the circumstances as mutually dependent on each other, the completeness of the calculation of taxes and fees by these companies or persons is also taken into account.

In cases where the parties to a transaction reduce the amount of income received or try to increase the amount of loss incurred from the transaction, the tax authorities have the right to make adjustments to market indicators on their own.

There are a number of taxes that companies or persons recognized as mutually dependent on each other are required to pay in full:

• VAT;
• personal income tax;
• for mining;
• on the profit of a company or organization.

At the same time, value added tax (VAT) is subject to accounting in matters of completeness of calculation and payment only if one of the parties to the transaction is an individual entrepreneur or company that is exempt from paying such tax or is not a payer of such tax for other reasons.

The mineral extraction tax is taken into account and subject to control in matters of completeness of payment and calculation when the subject of the transaction is any mineral, and at least one of the parties to the transaction is a payer of such tax on legal grounds.

Transactions are not considered controlled if

1. the parties to transactions are participants of the same consolidated group of taxpayers (except for transactions with a mineral extraction tax payer);

2. parties to transactions are persons who simultaneously the following requirements:

• registered in one subject of the Russian Federation;
• do not have separate divisions in the territories of other constituent entities of the Russian Federation, as well as outside the Russian Federation;
• do not pay corporate income tax to the budgets of other constituent entities of the Russian Federation;
• do not have losses (including losses from previous periods carried forward to future tax periods) accepted when calculating corporate income tax;
• among the indicated parties to transactions there are no persons who are: payers of mineral extraction tax; payers of Unified Agricultural Tax or UTII; exempt from the taxpayer's income tax obligations.

3. interbank loans (deposits) with a maturity of up to 7 (seven) calendar days; 4. transactions for the provision of sureties (guarantees) if all parties to such a transaction are Russian organizations that are not banks; 5. transactions for the provision of interest-free loans between related parties, the place of registration or place of residence of all parties and beneficiaries in which is the Russian Federation;

6. and others (more details, Article 105.14 of the Tax Code of the Russian Federation).

At the request of the Federal Tax Service, the court may recognize any transaction as controlled if there are sufficient grounds to believe that the specified transaction is part of a group of similar transactions made in order to create conditions under which such a transaction would not meet the characteristics of a controlled transaction (clause 10 of Article 105.14 of the Tax Code of the Russian Federation, Letter of the Ministry of Finance of Russia dated December 28, 2016 N 03-12-11/1/78760).

How to get a deal approved?

One general director can manage any number of legal entities. These legal entities can make as many transactions as they like, but tax risks will arise only when transactions are made at non-market prices or on non-market conditions.

When the general director does not manage the organization solely, he must provide the rest of the company with information about the legal entities in which he holds a leadership position. Such a transaction must be approved by the general meeting of participants.

If the transaction price is less than 2% of the value of the company’s property, it can be approved by the board of directors, in accordance with clause 7 of Art. 45 of the Federal Law of 02/08/1998 No. 14-FZ “On Limited Liability Companies”.

Notification of controlled transactions - why, deadline, form

The tax authority in the report is interested in the market price level for the transaction. After submitting the report, tax authorities may request documentation on controlled transactions. Moreover, as part of a tax audit, a request for documentation on controlled transactions may cover a period of 3 (three) years. There will be no penalties if the taxpayer submits documentation to the tax authority justifying the market price level.

Taxpayers are required to notify the tax authorities of controlled transactions completed during the calendar year no later than May 20 of the following year (Article 105.16 of the Tax Code of the Russian Federation):

• by location;
• (or) at the place of residence;
• (or) at the place of registration as the largest taxpayers.

The notification of controlled transactions (form) must contain the following information:

1) calendar year for which information is provided;

2) subjects of transactions;

3) information about participants in transactions:

— full name of the organization, TIN;

- FULL NAME. individual entrepreneur and his TIN;

- FULL NAME. and citizenship of an individual who is not an individual entrepreneur;

4) the amount of income received and (or) the amount of expenses incurred (losses incurred) for controlled transactions, highlighting the amounts of income (expenses) for transactions whose prices are subject to regulation.

Adjustment issues

The payer party to the transaction can independently adjust the income received to the market indicator if, as a result of the transaction, the amount for taxation decreases or the amount of the loss increases. At the same time, the legislation establishes a period for corrective actions on its part - one calendar year, taking into account the tax periods of each of the understated taxes.

At the same time, the payer-party to the transaction displays his actions in the tax return, in a special part of it, indicating all explanations and circumstances. The task of the tax authority in the future will be to analyze the declaration and actions of the parties to the transaction for legality and compliance with current standards.

The law establishes that corrective actions can be carried out in the following ways:

• individuals can make adjustments when they submit a personal income tax return, and make this adjustment independently, taking into account current standards;
• organizations can make adjustments when they submit a tax report on the payment of taxes on the company's income, or if the companies were not such payers in the same period, taking into account the current legislation.

That is, if a company is not a profit tax payer, then the adjustment and report on it are submitted to the tax authority within the same time frame as the declarations of companies that are profit tax payers.

In cases where we are talking about adjustments taking into account the tax on mineral resources, the adjustment is made when submitting an updated declaration in each tax period where there was a deviation from the norm of market prices, as well as simultaneously with the income declaration, be it an individual and his income, or company.

When calculating advance payments (should be understood as payments for taxes imposed by law, and not any other payments) at the end of a tax period equal to one calendar year, the payer party to the transaction can use the amounts actually received as a result of the transaction without adjusting them and without taking into account possible adjustments, as well as deviations from the norms of market transactions.

Advance payments do not exempt the payer-organization from paying the full amount of tax in the future, after taking into account the adjustment of transaction amounts.

If the transaction was carried out according to exchange conditions, then the amounts will not need to be adjusted; according to the law, such amounts are equal in status to market amounts, provided that the transaction took place within the framework of Russian legislation or the legislation of another state. And only according to exchange conditions, and not any others. Taxation in this case will be applied directly to the amounts actually received.

Author of the article

Controlled transactions - responsibility

Failure to provide notification of controlled transactions - a fine of 5,000 (five thousand) rubles (Article 129.4 of the Tax Code of the Russian Federation).

Non-payment or incomplete payment of tax as a result of the use of “non-market” prices - a fine of 20% of the unpaid tax amount from 2014, and from 2021 40% of the unpaid tax amount, but not less than 30,000 rubles. (Article 129.3 of the Tax Code of the Russian Federation).

Results

Thus, since 2014, strict state control has been introduced over transactions carried out between related parties in order to combat tax evasion. Companies that develop operating arrangements through their affiliates will have to be mindful of their pricing policies. The sanctions that threaten for underpayment of taxes discovered during the audit, due to an understatement of the market price of the goods, amount to 40% of the amount of underpaid tax plus penalties for the period of delay. At high speeds this can result in a very impressive amount.

Firmmaker, 2014 (updated 2020) Svetlana Mityukhina (Markina), Irina Bazyleva When using the material, a link to the article is required

Introductory information

The reason for writing this material was the recent Decision of the Supreme Court of the Russian Federation dated 01.02.2016 N AKPI15-1383. Of interest is not the subject of the dispute considered by the judges of the Supreme Court (the last paragraph of the Letter of the Ministry of Finance of Russia dated October 18, 2012 N 03-01-18/8-145 was disputed), but the essence of the issue - the right of territorial tax authorities to exercise price control in transactions between interdependent persons , which do not meet the characteristics of controlled ones. Undoubtedly, this question has great practical value.

According to paragraph 1 of Art. 105.3 of the Tax Code of the Russian Federation, for the purposes of tax control, all transactions concluded by business entities are divided into transactions between related parties and transactions between persons who are not such. The procedure for recognizing persons as interdependent is established by Chapter. 14.1 Tax Code of the Russian Federation. For tax purposes, prices applied in transactions in which parties are persons who are not recognized as interdependent, as well as income (profit, revenue) received by persons who are parties to such transactions are considered market prices. If in transactions between interdependent persons commercial or financial conditions are created or established that are different from those that would take place in transactions recognized as comparable between persons who are not interdependent, then any income (profit, revenue) that could be received by one from these persons, but due to the specified difference were not received by them, are taken into account for tax purposes for this person (Clause 1 of Article 105.3 of the Tax Code of the Russian Federation). In short, if these conditions differ, then you should calculate the amount of revenue (profit) that was not received by one of the interdependent persons due to the establishment of special conditions for the transaction, and include the indicated amount in its tax base. Moreover, the budget should not suffer as a result of such a recalculation. For tax purposes, prices applied in transactions in which parties are persons who are not recognized as interdependent, as well as income (profit, revenue) received by persons who are parties to such transactions are considered market prices. Transactions between interdependent persons, based on the totality of the norms of the Tax Code, can be divided into two groups: - controlled and recognized as such subject to the provisions of Art. 105.14 Tax Code of the Russian Federation; – other transactions between related parties that do not fall under the criteria of controlled transactions. Tax control over transactions made by related parties is carried out in accordance with Chapter. 14.5 Tax Code of the Russian Federation. In particular, the verification of the completeness of calculation and payment of taxes in connection with the execution of controlled transactions between related parties is carried out by the Central Authority of the Federal Tax Service of Russia (Clause 1 of Article 105.17 of the Tax Code of the Russian Federation). Tax control to ensure that prices used in controlled transactions correspond to the market price level is carried out on the basis of notifications about controlled transactions submitted to the territorial tax authorities at the place of registration. As part of such an audit, the main department has the right to carry out tax control measures established by Art. 95-97 Tax Code of the Russian Federation. Moreover, in para. 3 p. 1 art. 105.17 of the Tax Code of the Russian Federation emphasizes: monitoring the compliance of prices applied in controlled transactions with market prices cannot be the subject of on-site and desk audits. In relation to other transactions between related parties that do not fall under the criteria of controlled transactions, submitting a notification and preparing documentation in accordance with Art. 105.14 and 105.15 of the Tax Code of the Russian Federation are not provided for. The lack of clear regulations on the issue of price control for transactions that are carried out by related parties and are not recognized as controlled for the purposes of applying Section. V.1 of the Tax Code of the Russian Federation, has led to numerous disputes about whether territorial tax authorities are authorized to check prices for compliance with their market level. The practice of applying the norms of this section is still being formed.

The procedure for tax control of prices in transactions between related parties that do not meet the criteria for being controlled was explained by the Ministry of Finance in Letter No. 03-01-18/8-145 dated October 18, 2012 (hereinafter referred to as Letter No. 03-01-18/8-145). In it, financiers expressed several theses. 1. In cases of transactions between interdependent persons that do not meet the characteristics of controlled ones, in which the tax base is calculated on the basis of the provisions of individual articles of Part 2 of the Tax Code of the Russian Federation based on prices determined in accordance with Art. 105.3 of the Tax Code of the Russian Federation (including the sale of goods (work, services) in goods exchange (barter) transactions, the sale of goods (work, services) free of charge, the transfer of ownership of the pledged item to the pledgee in the event of failure to fulfill the obligation secured by the pledge, the transfer of goods (results work performed, services provided) when paying for labor in kind), monitoring the compliance of prices applied in such transactions with market prices may be the subject of on-site and desk audits. At the same time, in order to determine the actual price of a transaction in which it is assumed that the amount of tax payable to the budget system of the Russian Federation is underestimated, they considered it possible to apply the methods established by Chapter. 14.3 Tax Code of the Russian Federation. In a word, financiers believe that checking the price of the specified transaction for compliance with the market level can be carried out as part of ordinary desk and on-site tax audits, the purpose of which is precisely to check the correctness of the calculation of the tax base. 2. In relation to transactions in which taxpayers artificially create conditions so that the transaction does not meet the criteria of a controlled one, it is necessary to establish the actual interdependence of persons, including in accordance with paragraph 5 of Art. 105.1 of the Tax Code of the Russian Federation or recognize the transaction as controlled on the basis of the provisions of clause 10 of Art. 105.14 Tax Code of the Russian Federation. For our part, we will add: territorial tax authorities must establish it, and the court must recognize it at the request of the tax authorities, if there are sufficient grounds to recognize the transaction as controlled. In other cases of establishing facts of tax evasion as a result of the taxpayer’s manipulation of prices in transactions, it is necessary to prove that the taxpayer received an unjustified tax benefit within the framework of on-site and desk audits, including using the methods established by Chapter 14.3 of the Code *(1). Federal Tax Service specialists went even further (Letter dated September 16, 2014 N ED-4-2/ [email protected] ). They directly indicated that the provisions of the Tax Code only delimit the powers in terms of tax control of prices in transactions at the levels of the system of tax authorities in the Russian Federation: - checking the conformity of prices in controlled transactions by virtue of the provisions of paragraph 1 of Art. 105.17 of the Tax Code of the Russian Federation is carried out directly by the Central Election Commission of the Federal Tax Service; – checking prices in transactions between related parties, but which are not recognized as controlled in accordance with Art. 105.14 of the Tax Code of the Russian Federation, can be carried out by territorial tax authorities during a desk or field tax audit. At the same time, they emphasized: the tax authority must prove that the taxpayer received an unjustified tax benefit due, in particular, to a reduction in the tax base through price manipulation in transactions. However, how exactly the fact of price manipulation should be proven is not explained in the letter. Tax authorities also pointed out the possibility of using the methods specified in Chapter. 14.3 of the Tax Code of the Russian Federation, since this mechanism is provided for by the Tax Code in relation to controlled transactions. Thus, they made it clear that this approach to price control applies to those cases when the tax base is calculated on the basis of the provisions of individual articles of Part 2 of the Tax Code of the Russian Federation based on prices determined in accordance with Art. 105.3 of the Tax Code of the Russian Federation, although they did not directly indicate this (as officials of the Ministry of Finance did). However, taxpayers, as a rule, do not agree with this approach of the authorities. Their position is that the competence of territorial inspectors includes monitoring the correctness of calculation and payment of taxes. And this concept does not include control in the field of taxes and fees, the completeness of calculation and payment of taxes in connection with transactions between related parties that are recognized as controlled on the basis of Art. 105.14, 105.17 Tax Code of the Russian Federation. In this regard, one taxpayer attempted to challenge it and applied to the court to invalidate the last paragraph of Letter No. 03-01-18/8-145 (third thesis or paragraph 12 of the letter). But the Supreme Court refused him (Decision dated 02/01/2016 N AKPI15-1383).

According to the taxpayer, para. 12 Letters N 03-01-18/8-145 expands the powers of territorial tax authorities and the scope of application of price control for transactions between related parties, which contradicts clauses 2 and 3 of Art. 105.3, paragraph 1 of Art. 105.17 Tax Code of the Russian Federation. Refusing the taxpayer, the Supreme Court came to the conclusion that para. 12 Letter No. 03-01-18/8-145 does not contradict the tax legislation of the Russian Federation. And that's why. 1. This letter was issued by the Ministry of Finance within the powers established by paragraph 1 of Art. 34.2 Tax Code of the Russian Federation. 2. Explanations in the contested part were given directly by the Federal Tax Service in relation to its competence in exercising tax control over prices in transactions between related parties. At the same time, para. 12 Letter No. 03-01-18/8-145 does not contain instructions addressed to territorial tax authorities, which are not mentioned in it. 3. From the interpretation of the contested clarification, it cannot be concluded that the Ministry of Finance has granted territorial tax authorities the right to verify the completeness of calculation and payment of taxes in connection with such transactions and to apply for this purpose the methods of determining income specified in Chapter. 14.3 Tax Code of the Russian Federation. 4. The use of the term “price manipulation” in the explanation when distinguishing between different cases, the definition of which is not disclosed by the Tax Code, in itself also does not mean expanding the scope of application of price control in transactions between related parties. 5. The disputed paragraph and letter as a whole are of an informational and explanatory nature and do not expand the powers of territorial tax authorities established by the legislation on taxes and fees. By the way, shortly after the adoption of the Decision of the Supreme Court of the Russian Federation N AKPI15-1383, the Ministry of Finance in Letter dated 02/25/2016 N 03-01-11/10321 did not miss the opportunity to inform about the “correctness” of its conclusions regarding the right of territorial tax authorities to exercise control over pricing in transactions between interdependent persons, which cannot be considered controlled. True, controllers will be able to exercise such a right (we remind you) only if they prove the fact of receiving an unjustified tax benefit as a result of reducing the tax base through price manipulation in transactions. Here you should also pay attention to Letter of the Ministry of Finance of Russia dated June 19, 2015 N 03-01-18/35527, in which the authors clarified their previous position (from Letter N 03-01-18/8-145): transactions that are not recognized as controlled in in accordance with paragraph 4 of Art. 105.14 of the Tax Code of the Russian Federation, as well as transactions for which the amount of income does not exceed those established by Art. 105.14 of the Tax Code of the Russian Federation, amount criteria cannot be the subject of tax control in order to check the compliance of prices with market prices, both as part of checking the completeness of calculation and payment of taxes carried out by the Federal Tax Service of Russia, and as part of on-site and desk tax audits. But there is an exception to this general rule concerning transactions in respect of which there is a direct indication that the tax base for them is calculated based on prices determined in accordance with Art. 105.3 Tax Code of the Russian Federation. It turns out that if the Ministry of Finance interpreted the Decision of the Supreme Court of the Russian Federation N AKPI15-1383 in its favor, then one can hardly count on a reduction in the number of disputes on the identified problem... But do not be upset ahead of time. A more substantively analyzed issue (not an abstract letter, but a specific situation from practice) was examined in the Ruling of the RF Armed Forces dated April 11, 2016 No. 308-KG15-16651 in case No. A63-11506/2014. It provides an assessment of the relationship between price control and unjustified tax benefits.

As follows from the reasoning part of the Determination dated 04/11/2016 N 308-KG15-16651, the inspectorate insisted that it had the authority to adjust the tax base of the inspected taxpayer in connection with the identification of the fact of concluding transactions with interdependent persons, indicating that the company had received an unjustified tax benefit. At the same time, the lower courts agreed with the arguments of the controllers that in the event of transactions between interdependent persons that do not meet the characteristics of controlled ones, in which the calculation of the tax base is carried out on the basis of the provisions of certain articles of Part 2 of the Tax Code of the Russian Federation based on prices determined in accordance with Art. . 105.3 of the Tax Code of the Russian Federation, control of the compliance of prices applied in such transactions with market transactions may be the subject of on-site and desk audits (Resolution of the AS SKO dated September 11, 2015 N F08-5363/2015). But here is what the Judicial Panel said about this. A tax benefit cannot be recognized as justified if it was received by the taxpayer outside of connection with the implementation of real business or other economic activity. It should be taken into account that the possibility of achieving the same economic result with a smaller tax benefit received by the taxpayer by performing other transactions provided for or not prohibited by law is not a basis for recognizing the tax benefit as unjustified (Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated October 12, 2006 N 53). The receipt by the taxpayer of an unjustified tax benefit is evidenced by such circumstances as (clause 5 of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation No. 53): - the impossibility of the taxpayer actually carrying out the specified operations, taking into account the time, location of the property or the volume of material resources economically necessary for the production of goods, performance of work or provision of services; – lack of necessary conditions for achieving the results of the relevant economic activity due to the lack of managerial or technical personnel, fixed assets, production assets, warehouses, vehicles; – accounting for tax purposes only those business transactions that are directly related to the emergence of a tax benefit, if this type of activity also requires the completion and accounting of other business transactions; – carrying out transactions with goods that were not produced or could not be produced in the amount indicated by the taxpayer in the accounting documents. The mere interdependence of the parties to the transactions, in the absence of these or other similar circumstances, cannot serve as evidence that the taxpayer has received an unjustified tax benefit. Interdependence can have legal significance for the purposes of tax control only if it is established that such interdependence is used by the parties to the transaction as an opportunity to carry out concerted unfair actions that are not due to reasonable economic or other reasons (that is, aimed at illegally understating tax payments). Therefore, if the inspection only limited itself to stating the fact of interdependence of the parties to the transactions and did not establish other circumstances indicating the absence of reasonable economic grounds for carrying out these business transactions aimed at artificially creating conditions for obtaining unjustified benefits, then it had no right to adjust the prices applied by the interdependent parties transactions. As the Judicial Panel emphasized, in comparison with the previously existing legal regulation of price control (Article 40 of the Tax Code of the Russian Federation), the provisions of Section. V.1 of the Tax Code of the Russian Federation has narrowed the circle of regulatory bodies empowered to control prices applied in transactions between related parties to ensure that prices correspond to market prices, granting such powers exclusively to the Federal Tax Service. In addition, by establishing special procedures for carrying out this type of control: deadlines, restrictions on the number of inspections, the possibility of concluding a pricing agreement, the right to symmetrical adjustment, the Tax Code excluded from the list of transactions between related parties subject to control in the manner prescribed by this section, transactions not meeting the controlled criteria, as well as transactions for which the amount of income does not exceed those established by Art. 105.14 of the Tax Code of the Russian Federation, amount criteria. Moreover, due to the direct prohibition established in paragraph. 3 p. 1 art. 105.17 of the Tax Code of the Russian Federation, control of the compliance of prices applied in controlled transactions cannot be the subject of on-site and desk audits. Verdict of the Judicial Board: when conducting an on-site tax audit, the inspection went beyond the powers granted to it, carrying out, on the basis of the provisions of Chapter. 14.3 of the Tax Code of the Russian Federation, price adjustments during the audited tax period for transactions of the company with related parties.

What's the result? Despite the fact that currently the rulings of the Judicial Collegium on Economic Disputes do not have binding force on lower courts, the latter nevertheless take into account the position of the Supreme Court when considering disputes in similar circumstances. Therefore, one can hope that if the basis for price adjustments by territorial tax authorities in uncontrolled transactions was only the very fact of interdependence of the parties involved in the transaction, then Determination dated 04/11/2016 N 308-KG15-16651 will help taxpayers challenge their actions.

───────────────────────────────────────── ───────── *(1) We believe that we are talking about cases that are not directly regulated by the Tax Code.

A.A. Surkov, expert of the Tax Check magazine

Magazine “Tax Audit”, N 3, May-June 2021, p. 21-29.

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Cackl e

Who are the stakeholders?

Affiliation is one of the possible criteria for recognizing a person as an interested party (in the context of the provisions of paragraph 1 of Article 19 of the Law “On Bankruptcy” dated October 26, 2002 No. 127-FZ). At the same time, the concept of “interest” in different legal contexts is disclosed in more than a dozen federal regulations. For example, in such as:

• Customs Code of the EAEU (came into force on July 1, 2017);
• Civil Code of the Russian Federation;
• Code of Administrative Offenses of the Russian Federation;
• Housing Code of the Russian Federation;
• Law 14-FZ;
• Law “On Credit Cooperation” dated July 18, 2009 No. 190-FZ;
• Law “On Self-Regulatory Organizations” dated December 1, 2007 No. 315-FZ;
• Law “On Anti-Dumping Measures” dated December 8, 2003 No. 165-FZ.

It may be noted that a transaction between related parties can be concluded by parties who also have the status of interested parties.

Let us consider, as an example, the features of the status of an interested party in an LLC.

Where can I download a sample approval with an interest in an LLC?

Unlike transactions between related parties, interested party agreements are not subject to control by the Federal Tax Service.

A transaction with an interest in a company that is registered as an LLC is a legal relationship in the establishment of which there is an interest of certain persons specified in paragraph 1 of Art. 45 of Law 14-FZ. For example, a director of an organization or a member of its board of directors.

In general, no one’s approval is required to enter into an interested party transaction. However, if it is not properly received, then members of the board of directors or participants of the LLC will have the right to challenge such a transaction in court if they prove that its completion caused damage to the company (clause 6 of Article 45 of Law 14-FZ).

Therefore, it is advisable to formalize this consent. You can download its sample on our website.

Legislative acts on the topic

Results

A transaction concluded between interdependent persons may be controlled. It can actually be concluded by interested parties, affiliates, and beneficiaries. A transaction between interdependent persons in which the tax base is underestimated may, upon inspection by the Federal Tax Service, lead to fines and additional taxes.

You can learn more about the features of legal relations involving interdependent persons in the articles:

• “Criteria for controlled transactions - table for 2019”;
• “Interdependent persons in tax legal relations - 2018-2019”.

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