“Transfer pricing in cross-border transactions : problems of appropriate adjustment”

1. Евразийский научно-исследовательский центр сравнительного и международного финансового праваhttp://eurasiatax.com Eurasian Research Centre forComparative and International Tax Law http://eurasiatax.com “Transfer pricing in cross-border transactions: problems of appropriate adjustment” IllyaRuckov МАФП

2. Евразийский научно-исследовательский центр сравнительного и международного финансового праваhttp://eurasiatax.com Eurasian Research Centre forComparative and International Tax Law http://eurasiatax.com KEY DISSCUSSING ISSUES http://eurasiatax.com Problems of legal regulation relationship of taxpayers application an appropriate adjustment in cross-border transaction Problems of admission taxpayers right to appropriate adjustment; Problems of improvement of appropriate adjustment rules and non-discrimination while granting the right of usage domestic appropriate adjustment rules by multinationals.

3. Евразийский научно-исследовательский центр сравнительного и международного финансового праваhttp://eurasiatax.com Eurasian Research Centre forComparative and International Tax Law http://eurasiatax.com I.1. Problems of legal regulation relationship of taxpayers application an appropriate adjustment (“AA”) in cross-border transaction http://eurasiatax.com Double tax treaties on income and on capital (par. 2 art. 9 OECD MTC ) Domestic Legal regime “AA” in Russia (art. 105.18 Russian Tax code) Legal regime “AA” of foreign states Domestic and supranational levels of legal regulation

4. Евразийский научно-исследовательский центр сравнительного и международного финансового праваhttp://eurasiatax.com Eurasian Research Centre forComparative and International Tax Law http://eurasiatax.com I.2. Problems of legal regulation relationship of taxpayers application an appropriate adjustment in cross-border transaction http://eurasiatax.com art. 105.3 section V.1. of Russian Tax code / par 1 art 9 OECD MTC Primary Adjustment (changes in price conditions or levels of profitability) - one of the grounds for AA right. Appropriate adjustment art. 105.18 section V.1. of Russian Tax code / par 2 art 9 OECD MTC

5. Евразийский научно-исследовательский центр сравнительного и международного финансового праваhttp://eurasiatax.com Eurasian Research Centre forComparative and International Tax Law http://eurasiatax.com I.3.Problems of legal regulation relationship of taxpayers application an appropriate adjustment Primary Adjustment http://eurasiatax.com conducted by tax administrations (art. 105.3 RTC. Art. 105.17 RTC) conducted by taxpayers(par. 6 art. 105.3 RTC)

6. Евразийский научно-исследовательский центр сравнительного и международного финансового праваhttp://eurasiatax.com Eurasian Research Centre forComparative and International Tax Law http://eurasiatax.com II.1. Problems of admission taxpayers right to appropriate adjustment А Transaction В http://eurasiatax.com Yes Right to AA Primary Adjustment 1) Cases of price revising (levels of profitability) by tax administration (par. 5 art.105.3 RTC) 2) Cases of revising prices by taxpayers (levels of profitability) for the purpose of correcting tax base (par. 6 art. 105.3 of The Russian tax code -RTC) C Transaction D ? Right to AA Primary Adjustment

7. Евразийский научно-исследовательский центр сравнительного и международного финансового праваhttp://eurasiatax.com Eurasian Research Centre forComparative and International Tax Law http://eurasiatax.com II.2. Проблематика признания права налогоплательщиков на «симметричную корректировку» А В Transaction Yes Right to AA http://eurasiatax.com Adjustment Cases when taxpayer "B" - Russian company wishing to perform AA (par. 1 art 105.18 RTC) 2) Cases when taxpayer "D" - permanent establishment of foreign company wishing to perform AA (par. 1 art. 105 RTC) C Transaction D ? Right to AA Primary Adjustment

8. Евразийский научно-исследовательский центр сравнительного и международного финансового праваhttp://eurasiatax.com Eurasian Research Centre forComparative and International Tax Law http://eurasiatax.com Problems of improvement of appropriate adjustment rules and non-discrimination while granting the right of usage domestic appropriate adjustment rules by multinationals. http://eurasiatax.com The Draft of Federal law on Amendments to Tax Code of the Russian Federation Part I, July 18, 2011 No 227-FZ / The Draft ID : 00/03-8400/10-13/21-14-4. http://regulation.gov.ru/project/8400.html#.html

9. Евразийский научно-исследовательский центр сравнительного и международного финансового праваhttp://eurasiatax.com Eurasian Research Centre forComparative and International Tax Law http://eurasiatax.com III.2.Problems of improvement of appropriate adjustment rules and non-discrimination while granting the right of usage domestic appropriate adjustment rules by multinationals. http://eurasiatax.com The Draft of Amendments to art.105.18 RTC Yes ? C Transaction D II.1. Problems of admission taxpayers right to appropriate adjustment according to the Draft of the Federal law # 00/03-8400/10-13/21-14-4 Right to AA Primary Adjustment

10. Евразийский научно-исследовательский центр сравнительного и международного финансового праваhttp://eurasiatax.com Eurasian Research Centre forComparative and International Tax Law http://eurasiatax.com III.3.Problems of improvement of appropriate adjustment rules of usage domestic appropriate adjustment rules by multinationals» http://eurasiatax.com The Draft of the art. 105.18 RTC YES ? C Transaction D II.2. Problems of admission taxpayers right to appropriate adjustment according to the Draft of the Federal law # 00/03-8400/10-13/21-14-4 Right to AA Primary Adjustment In case when company"C" performs AA (par. 6 art. 105.3 RTC)

11. Евразийский научно-исследовательский центр сравнительного и международного финансового праваhttp://eurasiatax.com Eurasian Research Centre forComparative and International Tax Law http://eurasiatax.com III.4.Problems of improvement of appropriate adjustment rules of usage domestic appropriate adjustment rules by multinationals» http://eurasiatax.com The Draft of the art. 105.18 RTC NO! ? Transaction D II.2. Problems of admission taxpayers right to appropriate adjustment according to the Draft of the Federal law # 00/03-8400/10-13/21-14-4 Right to AA Primary Adjustment In case when tax administration performs AA for Company C (per.5 art. 105.3 RTC), and company D– is permanent establishment of forging company • Contradiction to the art. 24 OECD MTC!

12. Евразийский научно-исследовательский центр сравнительного и международного финансового праваhttp://eurasiatax.com Eurasian Research Centre forComparative and International Tax Law http://eurasiatax.com Thank you for your attention! IllyaRuckov, mailto: ytax@ymail.com МАФП