Goltsblat BLP Tax Practice advises of the outcome of the challenge to the format for notifying of controlled transactions (Avtoframos et al. vs the Federal Tax Service of Russia)
Publication of Resolution of the Presidium of the Supreme Commercial Court of the Russian Federation No. 18588/13 dated 25 February 2014 on the Avtoframos et al. vs the Federal Tax Service of Russia case (the “Resolution”) is an important step taken to protect the business community against the need to provide any information at the discretion of the Federal Tax Service of Russia at the stage when submission of transfer pricing notifications (the “Notification”) and, consequently, the need to bear the relevant costs.
In its Resolution, the Presidium stated that data included in the Notification should comply with clause 3 of article 105.16 (and that the court of the first instance failed to examine this particular issue), thereby recognising the List as exhaustive and binding on the Federal Tax Service of Russia. This also places restrictions on the tax administration should it introduce any further amendments to the format of the Notification.
These restrictions seem to be the most important litigation outcome, as this position will be applicable to any other cases when the Federal Tax Service of Russia (or the Ministry of Finance) is responsible for approving any formats on the basis of information lists stipulated by the legislation. It appears that another case of this type will follow shortly: a very similar mechanism is implanted in a draft law on amendments concerning controlled foreign companies, in which the formats of notifications about participation in (any) foreign companies and in controlled foreign companies are going to be approved.
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