The most important changes that were introduced to the Russian Tax Code, accounting and audit law in 2015 and will come into force on January 01, 2016. recommendations about the latest transfer pricing practices as and taxation of interests for intra-group loans.

1. MOST IMPORTANT
ACCOUNTING AND TAXATION
CHANGES FOR 2016 Ms. Olga Mazina
Deputy Director of Accounting Department, Tax Advisor,
Accountor Russia&Ukraine
TaXmas 2015

2. From 01.01.2016
• Value of depreciable assets – RUB 100,000 per asset
Fixed assets are deemed depreciable if their acquisition cost exceeds RUB
100,000. This new limit applies to fixed assets put into operation after
01.01.16 (No.150-FZ dated 08.06.2015)
• Transfer pricing: interest income and expenses for debts in RUB
Interest income and expenses for intra-group debts in rubles deemed
controlled transactions should be determined within the range of 75%-125%
of the key rate of the Central Bank of Russia (No.32-FZ dated 08.03.2015)
Since 2015
• Transfer pricing: symmetric adjustments of tax payable by Russian
companies
Symmetric tax adjustments are possible if the other party to the controlled
transaction declared the adjustment and paid additional tax on the
transaction (No.150-FZ dated 08.06.15)
CORPORATE INCOME TAX
01.12.20152

3. PERSONAL TAXATION OF EMPLOYEES –
NEW OBLIGATIONS FOR COMPANIES
01.12.20153
From 01.01.2016
• Quarterly declaration of personal income tax
Companies will be required to send to the Tax Office reports on their
employees’ personal income tax in 6-NDFL format. Reports are to be sent
within 1 month following the 1st quarter, 6 months, 9 months of the year by 1st
April annually.
Fine for late submission – RUB 1,000 and for errors in report – RUB 500. If
delayed submission exceeds 10 days – companies’ bank operations are
stopped (No.113-FZ dated 02.05.2015)
• Report on inability to withhold personal income tax
Companies will be required to send information about non-withheld personal
income to the Tax Office by 1st March of the following year in 2-NDFL format
(No.113-FZ dated 02.05.2015)
• Tax deductions for medical treatment and education
Employees will be able to benefit from tax deductions of up to 13% of the
costs incurred by employees. Deductions are granted by employers provided
they are confirmed by the Tax Office (No.85-FZ dated 06.04.2015)

4. PERSONAL INCOME TAX
01.12.20154
From 01.01.2016
• Sale of real estate by tax residents
New rules apply to property acquired after 01.01.2016.
Income from sale is exempt from taxation if the property was owned for at least 5
years before the sale.
Income from sale of property inherited or gifted by close relatives and privatized is
exempt from taxation if the property was owned for at least 3 years before the
sale.
if the actual income from sale is less than the property cadastral value determined
on the 1st of January of the year of transfer of ownership, 70% of the cadastral
value will be deemed taxable income.
Local authorities may decrease ownership term and percentage of cadastral value
(No.382-FZ dated 29.11.2014)
• New deadline for payment of property tax and land tax
Individuals are to pay property tax and land tax by the 1st of December of the
following year (No.320-FZ dated 23.11.2015)
• New limit of income for standard tax deductions – RUB 350,000
Standard tax deduction for children is provided up until accrued income reaches

5. SOCIAL CONTRIBUTIONS
01.12.20155
From 01.01.2016
Expected:
New payroll limits for accrual of social contributions:
RUB 796,000 – Pension contributions (now – RUB 711,000)
RUB 718,000 – Social contributions (now – RUB 670,000)
Since 2015 no limit for medical contributions.

6. ACCOUNTING NEWS
01.12.20156
Development of federal accounting standards:
First standards refer to state companies: drafts are ready and should be applied
from 2017 onwards
Expected:
Increase in fines for failure to submit financial statements to the State statistics
agencies – from RUB 100,000 to RUB 300,000 for companies
REMINDER: Russian GAAP includes 21 standards based on IFRS.

7. AUDIT
01.12.20157
Federal Law 403-FZ dated 01.12.2014:
• ISA in Russia
Audit conducted in accordance with International Standards of Auditing (ISA) issued by
the International Federation of Accountants (IFAC) and approved by a special decree
issued by the Russian Government. In 2015, the Russian Government issued an order of
approving ISA in Russia (Government Decree No.576 dated 11.06.2015)
• Compulsory audit of ZAO
Since 2014 - compulsory audit of all joint stock companies, including ZAO, regardless of
the company size and its financial position
• Informing the authorities about violations
Auditors are required to inform the audited company’s owners and management about
violations of the law or risks of such violations and ensure that this is duly noted by the
company. If proper measures are not taken, the auditor has to inform appropriate state
authorities.
Expected: fines for failure to provide the State statistics agencies with compulsory audit
conclusion will be increased up to RUB 300,000 – 500,000 for companies.
REMINDER: statutory audit is obligatory if in the year prior to reporting
Asset value > RUB 60 million
Net turnover > RUB 400 million

8. CONVENTION ON MUTUAL ASSISTANCE IN
TAX MATTERS
01.12.20158
• Developed by OECD and the Council of Europe in 1988
• Involves countries of G20, BRICS, OECD
• Gives instruments for all forms of tax cooperation to tackle tax evasion and
avoidance
• Ratified by Russia in 2014 (No.325-FZ dated 04.11.2014), effective since
01.07.2015
• Starting from tax periods of 2016, administrative assistance includes:
+ Exchange of information, including automatic exchange
+ Simultaneous tax checks and participation in tax checks abroad
+ Assistance with tax collection
+ Measures for ensuring and sending documents
In Russia, the Convention applies to:
Personal income tax, corporate income tax, VAT, excises, severance tax, private
and corporate property tax, transport/water/land tax, special tax regimes, etc.

9. TRANSFER PRICING: NEAREST ACTIONS
01.12.20159
• Companies are entitled to make voluntary adjustments to taxes in case
transfer pricing results in tax understatement
• Adjustments for 2015 can be included in annual income tax declaration till
28.03.16
• Since 2015: voluntary symmetric tax adjustments can be done by the group
companies operating in the Russian Federation
• All companies that concluded transactions with related non-residents in 2015
must submit reports to the Tax Office by 20.5.2016
• Fine for tax understatement in 2015– 20% of unpaid tax (from 2017 onwards
– 40%)
• Expected: limit on transactions with non-residents (not offshore) – RUB 60
million

10. • Transfer pricing documentation substantiating transfer pricing market level
releases company from fines. The Russian Ministry of Finance
recommends developing such documentation before concluding
transactions
Expected changes:
• From 2018 onwards, standardization of TP-documentation in order to
facilitate automatic exchange of information with foreign countries
New parts of documentation:
Master File (description of the group and functions of group companies)
Local File (information about transactions with a particular company)
These files will be exchanged automatically with tax authorities in all
countries where the group companies are located. Applicable to groups
with an annual turnover of over EUR 750 million (70 groups in the Russian
Federation)
• TP-documentation is not required for transactions whose value is less than
5% of the total turnover for all transactions with a particular related entity
but does not exceed RUB 10 million
• The criteria for determining the market interval will be more specific to
TRANSFER PRICING DOCUMENTATION
01.12.201510

11. Since 2015 (No.32-FZ dated 08.03.15):
For intra-group debts deemed controlled transactions, interest incomes and costs
are determined based on the following intervals:
Loans in RUB
between Russian
entities
2015:
0%-180% of key
rate of CB
From 2016
onwards:
75%-125% of key
rate of CB
Other loans in
RUR
2015:
75% of refinancing
rate of CB – 180%
of key rate of CB
From 2016
onwards:
75%-125% of key
rate of CB
Loans in EUR:
EURIBOR +4%-
EURIBOR +7%
INTERESTS FOR INTRA-GROUP LOANS
01.12.201511

12. Key rate changed on Key rate of Central Bank of Russia,
%
03.08.15 11
16.06.15 11.5
05.05.15 12.5
16.03.15 14
02.02.15 15
16.12.14 17
12.12.14 10.5
05.11.14 9.5
28.07.14 8
28.04.14 7.5
03.03.14 7
KEY RATE OF CENTRAL BANK OF RUSSIA
01.12.201512

13. 01.12.201513
Key rate of CB, EURIBOR, LIBOR used for limitation
For loans with fixed interest rate – upon loan receipt (signing the agreement)
For loans with variable interest rate – upon recognition of interest (i.e. monthly)
EURIBOR, LIBOR used for time periods which more closely correspond to the
loan term
Old loans
When loan was received before adoption of a key rate of CB (13.09.2013), the
refinancing rate of the Central Bank of Russia will apply for limitation of interest
(e.g. Letter of the Russian Ministry of Finance No.03-03РЗ/33795 dated
11.06.2015)
Transfer pricing documentation
Interest income and expenses can be accounted for in actual amounts if interest
rates are substantiated as per transfer pricing rules
Expected: thin capitalization rules will be replaced with direct limitation of
interests
INTERESTS FOR INTRA-GROUP LOANS

14. Thank you
Accountor Russia
Phone: +7 812 325 82 94 (281)/cell: +7 921 189 88 34
Olga.Mazina@accountor.ru
www.accountor.ru

15. PASSION FOR
RESULTS