Pricing Agreement and its Importance for the Tax Control of Transactions between Related Parties

Author Name(s): Ajdar M. Tufetulov, Fatih Sh. Nugaye, Andrey S. Zayats
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Due to the variety of approaches to determining correspondence of book prices to market prices, the system of tax control of transactions between interdependent persons creates inconvenience for both organizations and tax authorities: it is necessary to look for comparable prices, and to prove the possibility of using a particular method of pricing. For the harmonization and simplification of relations between taxpayers and tax authorities, the Tax Code of the Russian Federation provides for the possibility of concluding a pricing agreement [1].

The pricing agreement for tax purposes is an agreement between a largest taxpayer and the Federal Tax Service of the Russian Federation on the procedure for determining prices and applying pricing methods in transactions between interdependent persons.

The main purpose of the pricing agreement is achievement of certainty in the methods and process of determining by the taxpayer the prices used in transactions between interdependent persons for both taxpayers and tax authorities, and achievement on this basis of the contractual consolidation for all the terms of the transaction process of interdependent persons between a taxpayer and the tax authorities [2].

In connection with the foregoing, the relevance of the topic of the paper is in the consideration of the mechanism of the pricing agreements that allow defining clear “rules of the game” for both taxpayers and tax authorities in the process of tax control of transactions between interdependent persons.


Currently, the procedure for concluding a pricing agreement is provided for in Ch. 14.6 of the Tax Code of the Russian Federation, which regulates the procedure for the conclusion, duration and procedure for termination of a pricing agreement for tax purposes [2].

At the conclusion of the agreement, the tax authorities are guided, in addition to the Tax Code of the Russian Federation, by the Russian Federation’s agreements on avoidance of double taxation, and by the Guidelines of the Organization for Economic Cooperation and Development on Transfer Pricing for Transnational Companies and Tax Administrations [3].

The authors of the paper have proposed the stages of the process on concluding a pricing agreement. The stages of concluding a pricing agreement are the following:

  • Preliminary stage (submission by the taxpayer of the application and documents necessary for the conclusion of the pricing agreement);
  • A stage of consideration of documents of the tax bearer (decision-making on carrying out of the pricing agreement);
  • A stage when the pricing agreement is in effect.


Thus, pricing agreements being an instrument in domestic tax practice introduced by Law No. 227-FZ dated July 18, 2011 is another step in harmonizing the Russian tax system with international rules for controlling transactions between interdependent persons. According to O. V. Chaadaeva, conclusion of a pricing agreement allows considerably to simplify the procedure of tax administration of the largest taxpayers and to reduce the costs of taxpayers in connection with the conduct of tax controls. A pricing agreement for tax purposes allows the taxpayer and the tax authority to determine the market price of transactions on the basis of which tax liabilities are calculated before the actual execution of transactions [10].

Ultimately, according to the authors of the paper, conclusion of a pricing agreement can allow taxpayers to reduce the level of costs associated with implementing measures to meet the requirements of the law on setting prices in transactions for tax purposes, and to reduce the administrative burden of tax authorities associated with the implementation procedures for controlling transactions between interdependent persons.


The work is carried out according to the Russian Government Program of Competitive Growth of Kazan Federal University.


[1] The Tax Code of the Russian Federation (Part One). Approved by the Order of the Ministry of Finance of the Russian Federation dated 13.07.1998. No. 146-FZ (as amended on 08/06/2015) // SPS “Consultant Plus”. – Legislation: Prof. Version – Access mode: (accessed date: 01/05/2017).

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[5] On Amending Certain Legislative Acts of the Russian Federation in Connection with the Improvement of the Principles for Determining Prices for Tax Purposes: Federal Law No. 227-FZ dated July 18, 2011 // RossiyskayaGazeta. -2011. №5535.

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[7] Petukhova R.A. World practice of tax regulation of transfer pricing and the direction of its development // Innovative development of the economy. – 2016. – No. 3-1 (33). – P. 105-110.

[8] Artzhanova M. M. Tax risks of the largest taxpayers and the state // Information as the engine of scientific progress: a collection of papers of the international scientific and practical conference: in 3 parts. – 2017. – P. 12-17.

[9] Kirpikov A.N. Relevant approaches to performing analysis of financial results of organization’s activity with application of factor models / A.N. Kirpikov, F.S. Nugaev // International Business Management. – Volume 10. – Issue 15. – 2016. – Pages 2987-2991.

[10] Tufetulov A.M. Transaction tax control algorithm between related persons A.M. Tufetulov, F.S. Nugaev, A.S.  Zayats // International Business Management. – Volume 9. – Issue 7. –2015. – Pages 1785-1791

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