International Tax Law
Podshivalova D.Y. —
Peculiarities of Tax Control of Transfer Pricing: Approaches to Defining Controlled Transactions in Russian and Foreign Tax Laws
// Taxes and Taxation.
– 2018. – ¹ 5.
– P. 28 - 41.
DOI: 10.7256/2454-065X.2018.5.26996 URL: https://en. nbpublish.com/library_read_article.php?id=26996
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The subject of the research is the peculiarities of defining controlled transactions for the purposes of tax control over transfer pricing. The author of the article examines consequences of amendments made to the tax law, in particular, reduction of the list of controlled transactions, and analyses approaches to defining a controlled transaction in foreign tax law. The author also carries out an analysis of explanations of the Ministry of Finances of the Russian Federation and Tax Federal Service of Russia, Russian and foreign judicial practice on the matter, Russian and foreign researches, which makes the research important for practising lawyers. The methodological basis of the research is the general research methods such as analysis, synthesis, generalisation, the author has also used special research methosd such as formal law, comparative law and historical analysis. The scientific novelty of the research is caused by the fact that the author analyzes different criteria of the scope of application of tax control over transfer pricing and gives recommendations both for legislators and taxpayers who deal with the reduced list of controlled transactions. The main conclusions of the research are as follows: 1) when defining a range of controlled transactions, legislator applies a risk-oriented approach which allows to reduce the administrative burden on taxpayers; 2) based on the judicial practice and explanations of the Federal Tax Service of Russia, the aforesaid changes may have negative consequences, thus the author recommends what amendments should be made to the Tax Code of the Russian Federation; 3) taxpayers whose transactions will not be recognized as controlled should prepare additional rationale for an actual price of a transaction in order to reduce the risk; 4) in order to improve tax control taking into account experience of the foreign states, the author suggests to use the company's turnover volume as a criterion for recognising transactions as controlled, as well as to make up a certain criterion for preparation of documentation.
Unjustified tax benefit, Controlled transactions, Arm's length principle, Transfer pricing, Tax audits, Tax control, International taxation, Court practice, Tax code amendments, Tax liability
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