News

The Ministry of Finance of Russia plans implementation of a withholding tax on intragroup services

According to the law project, it is planned that any services purchased by a Russian company from a foreign related party will be subject withholding tax.
When paying for the services of a foreign company from the same group, the withholding tax rate will be 15%
.The initiative is aimed at suppressing situations where, under the guise of services, when paying from a Russian company to one of the group companies, the company distributes profit in order to avoid paying taxes on dividends.

According to the law project, it is planned that any services purchased by a Russian company from a foreign related party will be subject to 15% withholding tax.

Besides, the Government plans to implement changes in the Transfer Pricing, such as:

  • significant increase in transfer pricing fines
  • changes in the composition of transfer pricing documentation and the procedure for its provision, including outside the scope of inspections.
Some of the changes will take effect in 2024. Today, the law project is being considered in the State Duma in the second reading.