Russia vs RIF Trading House, April 2019, Moscow City Court, Case No. No. A40-241020/18

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In 2014, RIF Trading House sourced and bought agricultural products in Russia – wheat, barley, corn and peas. These products were then exported to a trader in the UAE, which turned out to be related to RIF Trading House.

However, RIF Trading House had not provide information on the relationship, nor the required transfer pricing documentation on the controlled transactions.

Following an audit, the Russian Federal Tax Service came to the conclusion that the export prices had been lowered in the supply of products to the trader in UAE.

The Russian Federal Tax Service independently conducted a transfer pricing analysis – functional analysis, analyzed the market, commodity exchange prices (Platts, ICAR) etc., and then issued a tax assessment where combinations of pricing methods and adjustments had been applied to determine the pricing of the controlled transactions and thus the income of RIF Trading House.

Disagreeing with the assessment RIF Trading House brought the case to Court.

The court ruled in favor of the tax authorities.

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