Russian Federation – Transfer Pricing (2025)

Legal framework and scope

The primary domestic provisions governing transfer pricing in the Russian Federation are located in Articles 105.1 through 105.15 and Article 105.3 of the Russian Tax Code (RTC), supplemented by other RTC provisions and administrative guidance issued by the Federal Tax Service (FTS). The Arm’s Length Principle is expressly referenced in Point 1 article 105.3 of the RTC. Related party status is defined in Point 1 and the specific instances listed in Point 2 article 105.1: parties are considered related where the peculiarities of their relations may affect the conditions and/or results of transactions between them or the economic results of their activities or the activities of persons they represent. Influence is assessed via capital participation, contractual arrangements or any other ability to determine decisions of another party, regardless of whether such influence is exercised directly or jointly with other related parties whose status is determined under article 105.1. The ownership threshold is set at more than 25% of direct and/or indirect ownership (shares with voting rights) (sub points 1–3 of point 2 article 105.1). Contractual influence can be present where a party is the sole or dominant counterparty and where contract terms strongly indicate deviation from the arm’s length principle.

Arm’s Length Principle and role of the OECD Guidelines

The OECD Transfer Pricing Guidelines (TPG) are not a source of domestic law in Russia; however, the TPG and the UN TP Manual are admissible as supplementary guidance. While the legal rules in the RTC are binding, comparability assessment and many interpretative matters follow principles substantially aligned with Chapter III of the OECD TPG (Article 105.5 of the RTC). Thus, the OECD Guidelines are influential and used as a reference but do not override domestic law.

Definition of related parties (thresholds, control, kinship, PEs)

Related party status in Russia hinges on the ability of one party to influence another, whether by equity participation, contract, or other means of control. The explicit ownership threshold is more than 25% direct or indirect holding of voting shares (point 2 article 105.1). Influence may also be exercised jointly with other related parties. The legislation contemplates contractual dominance as a basis for relatedness where contractual terms suggest deviation from arm’s length conditions. With respect to permanent establishments (PEs), the profile reports that Russia applies an approach consistent with the Authorized OECD Approach (AOA) for profit attribution where treaties permit; however, many bilateral treaties (about 50 by textual analysis) do not explicitly permit indirect methods, potentially limiting methods available in treaty interpretation, although no practical disputes requiring resolution of this uncertainty have been reported.

Methods and application criteria

Russian law lists the five traditional transfer pricing methods: CUP, Resale Price Method (RPM), Cost Plus, Transactional Net Margin Method (TNMM) and Profit Split (Articles 105.7–105.13 and Point 9 article 105.7 of the RTC). The statutory application criterion follows a hierarchy: CUP is the primary method except for resale transactions where RPM takes precedence over CUP. The typical hierarchy is CUP > RPM or Cost Plus > TNMM > Profit Split. For resale transactions the hierarchy is RPM > CUP > Cost Plus > TNMM > Profit Split. If none of the five methods is applicable to a one-off transaction (a single transaction not typical for the taxpayer’s ordinary activities), valuation approaches may be used as an alternative (Articles 105.7–105.13 and Point 9 article 105.7).

Comparability and ranges

Comparability analysis in Russia largely follows the OECD TPG principles (Article 105.5). There is a domestic comparables preference: foreign comparables for TNMM may be used only if domestic comparables are not available (Second paragraph of sub point 2 point 2 article 105.6). The tax administration does not use secret comparables (Point 3 Article 105.6). Comparability adjustments are permitted based on the results of the comparability analysis (Article 105.5). For determination of arm’s length remuneration the law prescribes the use of the interquartile range in general (Point 4 article 105.8, points 3–6 article 105.9). For quoted and exchange prices, a min-max range should be used.

Documentation and reporting (Master, Local, CbC, thresholds, language, timing, forms)

Documentation obligations flow from article 105.14: a taxpayer must prepare transfer pricing documentation if its transactions meet the statutory requirements. Article 105.15 and Chapter 14.4‑1 of the RTC prescribe the preparation of a Local File, Master File and Country-by-Country Report (CbCR) consistent with Annexes I–III of Chapter V of the OECD TPG.

Documentation must generally be prepared in Russian. The Local File and transaction-specific documentation can be requested by tax authorities no earlier than 1 June of the year following the calendar year in which the controlled transactions were conducted; upon request, documentation must be provided within 30 days. The Master File can be requested not earlier than 12 months and not later than 36 months after the end of the relevant reporting period, and must be delivered within 3 months of such request. The CbCR must be filed no later than 12 months after the end of the reporting tax period; it may be prepared in Russian or in a foreign language when the MNE group’s parent entity is located outside the Russian Federation. Russian taxpayers that are members of MNE groups must notify tax authorities of their participation no later than 8 months from the end of the reporting period of the MNE group’s parent company (Chapter 14.4‑1 of the RTC).

On thresholds, Russian law treats cross-border transactions between related parties as controlled from the RUB 60 million threshold for documentation purposes, which implies preparation of documentation for each controlled transaction in the relevant tax period. For CbCR, the standard international consolidated revenue threshold applies; alternatively, where the parent company is a Russian tax resident an internal threshold of RUB 50 billion is used.

Penalties related to documentation are set out in Article 129.3 and Articles 129.9–129.11 of the RTC. There is no general penalty solely for the absence of transfer pricing documentation; however, if price deviations have been established and documentation was in fact provided, penalties for non-payment of additional tax may not be imposed. Specific penalties are RUB 100,000 for failure to submit the Local File, RUB 100,000 for failure to submit the Master File, RUB 100,000 for failure to submit the CbCR or for submission of inaccurate information in the CbCR, and RUB 50,000 for failure to submit the required notification of participation in an MNE group.

Safe harbours / exemptions / materiality

Article 269 of the RTC provides safe harbour rules for controlled loan rates and thin capitalization measures. Under the controlled loans safe harbour a taxpayer may recognize income or expense according to the actual interest rate if such rate lies above or below the minimum or maximum point of the safe-harbour range. The thin capitalization rule sets a debt-to-equity ratio of 3 for most taxpayers and 12.5 for banks. Cost Contribution Agreements are not recognized under domestic law. The RTC contains exemptions from transfer pricing documentation obligations for transactions where prices are set under antitrust orders or regulated by governmental authorities; transactions with unrelated parties; transactions in publicly traded securities and derivatives; and transactions covered by an agreed advance pricing agreement (Article 105.14 and Point 4 article 105.15).

APAs and MAP; procedures and timelines

Russia provides for Advance Pricing Agreements (APAs) and Mutual Agreement Procedures (MAPs). Unilateral, bilateral and multilateral APAs are available under Chapter 14.6 of the RTC and related Ministry of Finance guidance; the Order of the Ministry of Finance № 60н dated 29.03.2018 governs BAPAs and MAPAs. An APA’s term is one to three years with a possible extension of up to two additional years. Rollback is not permitted. MAP procedures are established in Chapter 20.3 of the RTC and by Order of the Ministry of Finance № 102н dated 11.06.2020. New APA legislation was enacted by Federal Law № 6‑ФЗ dated 17.02.2021.

Penalties and other considerations (secondary adjustments, recharacterization, year-end adjustments, PEs)

Russia permits year-end adjustments: for cross-border transactions taxpayers may make upward adjustments to their tax base (i.e., pay additional tax) voluntarily; downward adjustments typically require recourse to MAP or to bilateral/multilateral APAs. Secondary adjustments are recognized in cases allowed under applicable double tax treaties. The Russian regime is transactional in approach: financial results for TP adjustments are determined for each transaction or group of uniform transactions; a portfolio approach for non-uniform transactions is not allowed. Concerning profit attribution to PEs, the jurisdiction follows the AOA where treaties permit; treaty text in many bilateral conventions does not explicitly authorize indirect methods, which could limit application of indirect attribution methods in those cases, though no practical disputes have necessitated resolution of such issues so far.

Other relevant information

There is no specific domestic guidance on pricing of intangibles or on Hard-to-Value Intangibles (HTVI); general TP rules (the five methods) apply and the OECD TPG and UN Manual may be used as supplementary guidance (e.g., DEMPE analysis). For intra-group services there is no special statutory regime but the FTS has issued interpretative letters (Letters ШЮ‑4‑13/12599@ dated 06.08.2020 and ШЮ‑4‑13/1749@ dated 12.02.2021) clarifying the deductibility analysis: first determine whether the payment qualifies as a tax-deductible expense and survives general anti‑avoidance rules; if not deductible, no TP analysis is applied; if deductible, general TP provisions apply and the markup should be tested against TP methods. General deductibility and anti-avoidance rules in Articles 252 and 54.1 of the RTC and Letter БВ‑4‑7/3060@ dated 10.03.2021 are also relevant.

Conclusion

The Russian transfer pricing framework is comprehensive and prescriptive: related-party status is clearly defined (more-than-25% ownership threshold among other tests), five classical TP methods are codified with a statutory hierarchy (with CUP and RPM prioritized in specific cases), documentation obligations (Local File, Master File, CbCR) are mandated under defined thresholds and timelines, and specific safe harbours and thin capitalization rules apply to financial transactions. While the OECD TPG do not have the force of law, they serve as important supplementary guidance for interpretative and comparability matters. Compliance priorities for taxpayers include meeting documentation timing requirements (Local File within 30 days of request, Master File within 3 months of request), preparing documentation in Russian unless exceptions apply to CbCR, monitoring the RUB 60 million controlled-transaction threshold and observing prescribed penalties for non-filing or inaccuracies in mandated reports.

References

Further information and the country profile are available on the OECD country profiles page: https://www.oecd.org/en/topics/sub-issues/transfer-pricing/transfer-pricing-country-profiles.html