Russia

Details

  • Service: Tax & Legal, Transfer Pricing Services
  • Industry: Oil & Gas
  • Type: Press release
  • Date: 3/27/2013

New Transfer Pricing Rules: one year later 

KPMG in Russia and the CIS has conducted a survey of the impact of the new transfer pricing rules adopted a year ago on the largest Russian and international companies in the oil and gas sector operating in Russia.

As just over a year has passed since the entry into force of the new transfer pricing rules, we now have an opportunity to analyze the impact of the new rules on the largest Russian and international companies in the oil & gas sector operating in Russia. Natalia Valkovskaya, Partner and Head of the Transfer Pricing Group, says that the new rules have had a significant impact on business: “Most companies admitted that the new transfer pricing legislation had necessitated corresponding changes.” Over half the respondents confirmed that at present they are reviewing the current business model or structure of contractual relations in the group, while three of the 12 companies are planning or implementing reorganization.

 

In addition, the respondents believe that the following are the key difficulties encountered during the adaptation process:

  • the significant volume of information required on the controlled transactions (10 out of 12 companies),
  • the need to modify the accounting system (8 out of 12 companies),
  • the lack of automation of processes (7 out of 12 companies),
  • the instability of tax legislation (7 out of 12 companies). 

Owing to the adoption of the new transfer pricing rules, companies have had to tackle additional tasks, which include not only the identification of controlled transactions, functional analysis, determination of the transfer pricing method, statistical research and management of the identified tax risks, but also the preparation of notices and documentation on the controlled transactions. Sergei Schelkalin, Partner, Tax & Legal, KPMG in Russia and the CIS, comments: “We can see that 90% of the respondents are acutely aware that they lack the necessary staff due to the increasing volume of the tasks, and that the overwhelming majority of the respondents prefer to outsource the most time-consuming segment of the work – the statistical research (10 out of 12 companies).”

 

Even though automation of the process for preparing notices on controlled transactions is considered a key issue, less than half the respondents plan to automate this process.  Sergei Schelkalin notes: “It goes without saying that the processes in this area require substantial elaboration and optimization and that companies are only at the start of this complex path today. At present, however, it is already possible to point out that companies plan to automate the identification of controlled transactions for instance.”

New Transfer Pricing Rules: one year later

Feature image

KPMG has conducted a survey of the impact of the new transfer pricing rules adopted a year ago on the largest Russian and international companies in the oil and gas sector operating in Russia.

About KPMG in Russia and CIS

KPMG is a global network of professional firms providing Audit, Tax and Advisory services. We operate in 155 countries with more than 155,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

 

KPMG has been operating in Russia more than twenty years. For the last years KPMG in Russia and the CIS has been one of the fastest growing practices in KPMG worldwide.

 

In the CIS, KPMG now has offices in Moscow, St. Petersburg, Yekaterinburg, Kazan, Nizhny Novgorod, Novosibirsk, Rostov-on-Don, Krasnoyarsk, Perm, Almaty, Astana, Atyrau, Bishkek, Kiev, Lviv, Yerevan, Tbilisi and Baku, employing together over 4,000 people.

Media contacts

For any media enquiries or interview requests contact our media team at PR@kpmg.ru or Sabina Kasparova, Manager, PR & Communications, KPMG in Russia and the CIS, at +7 (495) 937 4477 (ext 14264), +7 (968) 6911037 or sabinakasparova@kpmg.ru.
 
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