LLC Otis Lift, a Russian subsidiary of US parent Otis Elevator Company, paid royalties calculated on total maintenance revenue rather than only on Otis-branded goods and services as required by the licence agreement. The Russian tax authority issued an additional income assessment after finding the company had overstated deductible expenses. The Moscow Arbitration Court upheld the assessment in December 2021, ruling mostly in favour of the tax authority ... Read more

Vimpelcom-Communications argued that Russian tax authorities had missed the two-year deadline to order a transfer pricing audit of its 2017 agency-service transactions with Dutch counterparty Veon Wholesale Services B.V. The Moscow Arbitration Court dismissed the complaint in 2021, finding the limitation period had been suspended for nearly three months, validly extending the audit deadline to 31 December 2020 and confirming the tax authority's decision was lawful ... Read more

ViciunaiRus LLC, a Russian producer and wholesale distributor, faced tax authority challenges over an artificial intermediary chain that inflated product prices by over 20%. Authorities assessed additional profit tax and VAT using the resale price of the final distributor rather than prescribed transfer pricing methods. The Russian Supreme Court, finding procedural and methodological errors in applying Section V.1 pricing rules, remanded the case for reexamination in April 2020 ... Read more

PJSC Uralkali, a Russian potash producer, sold fertilizers through a related Swiss trading hub and applied TNMM to price the controlled transaction. Russian tax authorities rejected TNMM, applied the CUP method using Argus price quotations, and issued an assessment. Russia's Supreme Court Review Panel upheld the Court of Appeal's finding that TNMM was misapplied and that CUP was the more appropriate method for commodity transactions ... Read more

Garnet-SPb, exclusive Russian representative of a German manufacturer, began sourcing goods through an intermediary following EU sanctions in 2014, resulting in a 40% price markup. The tax authority assessed additional VAT and income tax, arguing the arrangement was artificial. After the first instance ruled for the taxpayer, Russia's Court of Appeal reversed the decision in 2019, finding the intermediary structure generated an unjustified tax benefit ... Read more

PJSC Uralkali sold potassium chloride through a related Swiss trading entity and justified pricing using TNMM with the trader as tested party. The Russian tax authorities rejected this approach, applying CUP based on Argus commodity price quotations instead. The Court of Appeal reversed the first instance ruling in favour of the taxpayer, finding TNMM had been misapplied to obtain unjustified tax benefits and confirming CUP as the more appropriate method ... Read more

A Russian trading house exported agricultural commodities including wheat, barley, corn and peas to a related UAE trader at artificially low prices, without disclosing the relationship or providing transfer pricing documentation. The Russian Federal Tax Service conducted an independent analysis using Platts and ICAR commodity exchange prices, applying combined pricing methods and adjustments. The Moscow City Court ruled in favour of the tax authority in 2019 ... Read more

A Russian LLC sold real estate to its founders at prices deviating 2 to 29 times below market value, claiming urgency and lack of third-party interest. The tax authority issued a market-value adjustment. The Supreme Court upheld the adjustment in 2019, finding no genuine intent to sell to third parties and noting the company continued occupying the sold buildings under lease while bearing maintenance costs ... Read more

A Russian fish and seafood processor sold all its products exclusively to related parties at below-market prices. The tax authority applied TNMM after ruling out CUP, resale price, and cost methods, concluding the pricing yielded an unjustified tax benefit. The Court of Appeal upheld the assessment in 2019, finding the TNMM approach reasonable and consistent with Russian transfer pricing legislation ... Read more

A Russian steel trading company made substantial payments to a related individual entrepreneur for management services. The tax authority found a deliberate scheme to minimise tax and recalculated expenses using cost-plus and comparable profitability methods. The Court of Appeal upheld the authority's approach, confirming that where the CUP method cannot be applied, any remaining transfer pricing method may be freely chosen ... Read more

ViciunaiRus LLC used a chain of intermediaries lacking assets or personnel to distribute products, inflating prices by over 20%. Russian tax authorities challenged the arrangement as artificial and assessed additional profit tax and VAT for 2012–2014. The Court of Appeal largely upheld the tax authority's position, though found it had exceeded its authority regarding transfer pricing adjustments on controlled transactions under Section V.1 of the Tax Code ... Read more

A Russian basalt producer sold rubble to related intermediaries who resold it at roughly double the price. Tax authorities argued the structure existed solely to reduce taxable profits and assessed income based on final resale prices. The Court of Appeal upheld the first instance ruling in favour of the taxpayer, finding the intermediaries performed genuine functions and that the tax authority had wrongly applied the resale price method instead of the priority comparable uncontrolled price method ... Read more

A Russian company leased premises to a related party at rates 10–20 times below those charged to independent tenants. The tax authority applied the cost plus method and issued an assessment citing unjustified tax benefit. The Supreme Court agreed the lease was non-arm's length but invalidated the assessment because the CUP method holds statutory priority and was not properly considered before applying cost plus ... Read more

A Russian fertiliser producer, Togliattiazot, sold ammonia at below-arm's-length prices to its Swiss trading affiliate, Nitrochem Distribution AG. The Russian tax authority challenged the pricing and applied the CUP method. The company denied affiliation and later argued for TNMM, but the court ruled in favour of the tax authority in 2018, confirming actual control and rejecting the taxpayer's TNMM as insufficiently comparable ... Read more

A Russian individual entrepreneur sold building products to related and unrelated parties at differing prices. Tax authorities challenged the pricing using a gross markup method after rejecting CUP, citing deviations of 11–52%. The Supreme Court reversed lower court rulings in 2018, holding that price differences alone cannot establish unjustified tax benefit and that the tax authority failed to demonstrate comparability between related and unrelated transactions, particularly regarding sales volumes ... Read more

A Russian sand extraction company sold product to related intermediaries at below-market prices, which then resold to end customers at significantly higher prices. The tax authority assessed additional tax using the resale price method, but the Court of Appeal found the method was incorrectly applied and ordered use of the CUP method, while confirming that an unjustified tax benefit had been obtained ... Read more

Gazprom Chemical Fiber routed sales through an intermediate trading hub, prompting tax authorities to challenge the resulting prices as non-arm's length and adjust taxable income upward. The court of first instance sided with the authorities, but Russia's Appeal Court reversed the decision in 2017, finding no multiple deviations from market prices and that the tax authority had exceeded its statutory powers. The Supreme Court upheld the appellate ruling ... Read more

Uralkaliy PAO, a Russian potassium chloride producer, sold goods to its Swiss trading affiliate Uralkali Trading SA. The Russian tax authority challenged the pricing, issuing a 980 million rouble assessment based on the CUP method. The Moscow Arbitration Court sided with the taxpayer in 2017, upholding the TNMM as the appropriate method and finding the Swiss trader's profit margin fell within the arm's length range ... Read more

A Russian forestry company sold sand and construction services to a related party at prices the tax authority deemed artificially low. Using gross margin analysis, the authority found the buyer's margins of 51.87% and 73.55% far exceeded the arm's length range. The 2017 Russian Appeal Court upheld the tax authority's income tax and VAT adjustments, confirming a tax avoidance scheme had been established ... Read more

Dulisma Oil, a Russian company, sold crude oil to an unrelated Hong Kong trading entity at prices the tax authorities found deviated from Platts benchmark quotations. No transfer pricing documentation had been prepared, and the company could not explain its pricing differential. The Russian court upheld the RUB 177 million assessment and penalties in 2017, accepting the tax authority's CUP-based adjustment using the ESPO M1 differential ... Read more

A Russian oil and gas company sold crude oil through an unrelated Hong Kong trader in 2012 at prices the tax authority found to be understated. Using the CUP method based on Platts Dubai grade crude quotes, adjusted for quality and delivery terms, the authority reassessed the arm's length price. Russia's Court of Appeal upheld the assessment in 2017, confirming the CUP method and Platts data were properly applied ... Read more

Continental Tires RUS LLC received substantial loans from its German parent, Continental AG. The Russian tax authority challenged the arrangement, arguing the loans artificially inflated accounts payable and served mainly to transfer funds abroad rather than meet genuine working capital needs. The Russian Court of Appeal ruled in favour of the tax authority in 2016, finding the loan transactions lacked legitimate economic purpose under Article 252 of the Tax Code ... Read more

A Russian subsidiary of the Suzuki/Itochu group reported losses in 2009, prompting a tax authority audit concluding that non-arm's length transfer pricing and excessive cost deductions caused the losses. The Arbitration Court ruled in favour of the tax authority in 2016, finding that the resale price method had been correctly applied and that the purchase price of vehicles had been overstated, upholding the assessment in full ... Read more

The Russian subsidiary of Hyundai Motors incurred recurring losses that the tax authority attributed to non-arm's length transfer pricing, issuing an assessment of over 857 million rubles for 2009–2010. The Arbitration Court partially upheld the assessment, and the Russian Supreme Court dismissed Hyundai's subsequent appeal in January 2016, confirming that the distributor had overstated acquisition costs for vehicles based on VIN-level analysis ... Read more

A Russian subsidiary of Mazda Motors Group had been reporting losses, which the tax authorities attributed to overstated purchase prices of Mazda vehicles. Using the Resale Price Method, authorities assessed additional income of over 1.36 billion rubles for FY 2009. The Arbitration Court and Court of Appeal both sided with the tax authority, and Russia's Supreme Court denied the taxpayer's final appeal in October 2015 ... Read more

A Russian subsidiary of the Hyundai group claimed losses in 2008 and 2009, attributing them to the financial crisis. The Russian tax authority argued the losses resulted from non-arm's length transfer pricing. The Moscow Arbitration Court rejected the taxpayer's comparable analysis and ruled that a routine distributor could not justify sustained losses through market conditions alone, deciding in favour of the tax authority ... Read more

A Russian subsidiary of Mazda Motors repeatedly reported losses that the tax authority attributed to non-arm's length intra-group transfer pricing. Using the Resale Price Method, the authority issued a pricing assessment. The Moscow Arbitration Court upheld the lower court's decision in 2015, confirming the assessment was lawful and rejecting the company's claims in full ... Read more

A Russian subsidiary of British American Tobacco was found by the Russian tax administration to have overpaid interest on loans from a Netherlands affiliate, triggering thin capitalisation rules. The Russian High Court ruled in favour of the tax authority in 2014, upholding the reassessment of excess interest deductions claimed by the subsidiary ... Read more