According to the Russian Government executive order №2608-r as of 7 December 2016, the Multilateral Competent Authority Agreement on automatic exchange of Country-by-Country Reporting was signed by the Federal Tax Service of Russia on 26 January 2017.

The agreement was signed during the meeting of the Inclusive Body for implementation of the Plan on counteract erosion of tax base and withdrawal of profits from taxation (BEPS Plan); the Plan was approved by top public officials of "G-20 Group".

Russia's accession to the Agreement conforms to the standard, formulated under paragraph 13 of the BEPS Plan «Transfer Pricing Documentation and Country-by-Country Reporting».

Country-by-Country Reporting is the formalized document, reflecting financial, tax and other ratios of the international group of companies in States or territories where the members carry out their activities.

The subjects of the standard - are the largest transnational group of companies consolidated proceeds of which are more than 750 mln EUR per year.

According to general rule of the Agreement, the Country-by-Country Reporting is submitted by group's parent company to the tax authority of the State, in which the subject is a tax resident. The tax authority is obligated to share reports with tax authorities of the States, where other members of the group are located.

Currently more than 50 States have adopted the legislation on implementation of automatic exchange of Country-by-Country Reporting and acceded to the Multilateral Agreement.

Russia's accession to the Agreement as well as Convention on Mutual Administrative Assistance in Tax Matters (entered into force on 01.07.2015) create a world-class legal basis, which allow Russian tax authorities to share Country-by-Country Reporting with the relevant authorities of foreign States and use this information for analysis before inspections. Whereas, for Russian taxpayers it gives the opportunity to submit Country-by-Country Reporting centrally, including members of the group – the tax residents of other States, without threat of double taxation.

However, the relevant domestic law on Country-by-Country Reporting is required for complete actual use of the Agreement. The Ministry of Finance of the Russian Federation is already preparing such draft law. In case of adoption of the law until the end of 2017 the exchange of Country-by-Country Reporting (from 2016) may start in 2018.

According to the experts, the list of group companies, which are obligated to submit the Country-by-Country Reporting, may include the largest Russian commodity, industrial and financial holdings. Thus, according to the Information and Analytical system Globas-i^®, there are more than 70 companies, the consolidated proceeds of which meet the requirements of the Agreement on the exchange of Country-by-Country Reporting. Among these companies are: Public Joint Stock Company Gazprom, PAO LUKOIL, Joint stock Company Mining and Metallurgical Company NORILSK NICKEL, PAO TRANSNEFT, PAO SEVERSTAL, PAO AFK SYSTEMA, PAO AEROFLOT.

Information agency Credinform offers the ranking of the largest Russian manufacturers of thermal power. The companies with the highest volume of revenue involved in this industry (TOP-10) were selected for this ranking, according to the data from the Statistical Register for the latest available period (for 2015-2014). Then they were ranked by current assets to equity ratio (Table 1).

Current assets to equity ratio (х) characterizes company’s ability to maintain the level of own working capital and to finance current assets with own sources. The ratio is calculated as the relation of own current assets of a company to total value of equity. The recommended value is from 0,2 to 0,5.

Decrease in the ratio points to a possible slowdown in collection of receivables or tightening of conditions for granting trade credit from suppliers and contractors. The increase demonstrates the growing opportunities to pay off current liabilities.

The specialists of the Information agency Credinform, taking into account the actual situation in the economy as well in general as in industries, have developed and implemented in the Information and Analytical system Globas-i^® the calculation of practical values of financial ratios, which may be considered as normal for a specific industry. For manufacturers of thermal power the practical value of the current assets to equity ratio ranges from 0,31 to 1.

For getting of the most comprehensive and fair picture of the financial standing of an enterprise it is necessary to pay attention not only to compliance with standard values, but also to all combination of financial indicators and company’s ratios.

*) - the average value on the group of companies
**) – the average value on the industry

The average value of the current assets to equity ratio in the group of TOP-10 companies in 2015 is negative and lower than the industry average. At the same time, none from TOP-10 companies has indicators that meet the standard value. Only the ratio value of MURMANENERGOSBYT NAO is in the range of practical value.

The volume of revenue of 10 the largest enterprises is 62% of the total revenue of 100 the largest companies. It testifies to a relatively high level of monopolization in this industry, taking into account that organizations of this industry work exclusively at the regional level. The share of the enterprise, being the largest on revenue in 2015, JSC MOSCOW INTEGRATED POWER COMPANY, made 31% in the total revenue of the group of TOP-100 companies (Picture 2).

Seven from TOP-10 companies have got high solvency index Globas-i^®, that testifies to their ability to pay off their debts in time and fully.

Three from TOP-10 companies have got satisfactory solvency index Globas-i^®. Thus, regarding VOLGOGRADSKOE KOMMUNALNOE KHOZYAISTVO MUE, MURMANENERGOSBYT NAO, JSC TGC-2 there is information about their participation as defendants in arbitration court proceedings in terms of debt collection. The same companies have unclosed enforcement orders and loss in the structure of balance sheet ratios. Forecast of the ratio development of all three companies is stable.

From TOP-10 companies only OMSKIE RASPREDELITELNYE TEPLOVYE SETI NAO and TEPLOENERGO PJSC were able to increase the net profit and revenue in 2015 compared to the previous period. The rest enterprises (marked with red background shading in Table 1) have reduced the volumes of revenue or net profit, or have a loss.

In general, the indicators of thermal power manufacture in real terms in the period from 2010 to 2016 have not differed in stability, that is confirmed by the data of the Federal State Statistics Service (Table 2).

*) red background shading in Table 2 marked decline in production, green – the growth.

The greatest volume of thermal power is manufactured by boiler-house and thermal power plants. In 2016, in general, there is an increased production (Picture 3).

The enterprises on thermal power manufacture are distributed across the country’s territory relatively equal, taking into account the specifics of their activity, and are concentrated mainly in the industrially developed regions with a significant amount of the population. It is confirmed by the data of the Information and Analytical system Globas-i, according to which 100 the largest companies of the industry in terms of revenue for 2015 are registered in 46 regions of Russia (Picture 4).