Russia has acceded to the Multilateral Competent Authority Agreement on automatic exchange of Country-by-Country Reporting

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.