Trends of the Tax Control of Transactions between Related Parties in the Russian Federation

Author Name(s): Ajdar M. Tufetulov, Fatih Sh. Nugayev, *Andrey S. Zayats
Author Email: zayatsas@yandex.ru

Abstract

The Russian economy is a part of the world economy, and many business entities carry out activities both in Russia and abroad with the use of various international structures: holdings and transnational corporations. Development of such structures within the context of competition between tax systems of different countries, can lead to significant losses for the state budget, which are caused by the withdrawal of profit centers to countries with a more favorable (preferential) tax regime. As a result, the Russian legal system inevitably develops within the mainstream of world trends and adapts to more and more complicated ways and methods of conducting economic activity. One of the characteristic trends in the development of Russian legislation is the development and implementation of legal institutions that, through international tax planning methods, make it possible to prevent tax evasion. Such institutions are already operating in the legal systems of developed countries. At the present stage of economic development of countries, one of the most relevant is the institution of tax control of transactions between interdependent persons.

The relevance of the topic of the paper is the definition by the authors of the paper of the term “tax control of transactions between interdependent persons, as well as identification of changes reflecting the evolution of tax control of transactions between interdependent persons in the Russian Federation.

Introduction

Tax control is one of the main elements of state control of a market economy. In a broad sense, tax control means a set of measures for state regulation of the economy aimed at the effective implementation of the economic policy of the Russian Federation and ensuring fiscal interests of the state [1]. In the narrow sense, the tax control means a special type of activity of authorized state bodies aimed at obtaining information on compliance with the norms of tax legislation and checking the completeness and timeliness of tax obligations fulfillment. An integral part of the state tax control is the tax control of transactions between interdependent persons [2].

Conclusions

In scientific practice, the term “tax control of transfer pricing” prevails, and the term “tax control of transactions between interdependent persons” is used only as the title of section V. 1 of the Tax Code of the Russian Federation. In this connection, the authors of the paper proposed the author’s definition of the term “tax control of transactions between interdependent persons”: this is one of the key areas of the state tax policy, which consists in obtaining adequate amounts of taxes by the state, avoiding tax evasion and capital withdrawal abroad (low-tax jurisdiction) by clarifying the list of interdependent persons, controlled transactions, tax control of transactions between interdependent persons, methods for determining market prices, and of the conclusion of pricing agreements. Also, the authors of the paper made a comparative analysis of changes in the legislative norms regarding the tax control of transactions between interdependent persons until 2013 and after 2013; the most significant changes were revealed.

Acknowledgements

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

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