Controlled transactions are transactions between related parties. Art. 105.14 of the Tax Code with comments
Controlled transactions are those that occur between persons deemed to be interdependent. According to them, the tax authorities have the right to verify the conformity of the market value, and, in addition, they track the full amount of estimates, along with the payment of a number of taxes. Below we consider art. No. 105.14 of the Tax Code of the Russian Federation with comments.
Types of transactions between participants that are interdependent
According to the objectives of the Tax Code, such transactions are those that occur between participants that are interdependent:
- A controlled transaction is a set of operations for the resale of goods, or the execution of orders and the provision of services that are performed with the participation of persons who are not considered interdependent.Such an aggregate is equated to transactions between participants that are interdependent, although it does not take into account the presence of third parties who do not perform any additional functions in this aggregate. The only exception is the organization of the resale of goods, the provision of services, and so on. Third parties do not assume the risks and do not use the assets to organize the sale of goods.
- Large transactions in the field of foreign economy and trade.
- Transactions provided that one of the parties is a participant whose residence is the state or territory included in the list approved by the Ministry of Finance in accordance with Article 284 of the Tax Code. In the event that the activity of a Russian institution forms a permanent establishment in a country included in the list indicated in Article 284, this organization is considered as the person whose place of residence is the territory included in this list.
The circumstances under which transactions are considered controlled
Controlled transactions are transactions between participantsWhose place of registration and residence is Russia. They are such if there is at least one of the following circumstances:
- The maximum amount of transactions between participants for a calendar year exceeds one billion rubles.
- One of the parties acts as a taxpayer for the extraction of minerals. In this case, the tax is calculated at a rate that is set as a percentage, and the extracted mineral is considered to be the subject of the transaction. This fossil is recognized as a taxation for the said person.
- Interdependent parties are involved in the transaction, and at least one of the parties is a taxpayer who applies one of the special regimes. One of them is considered the system of taxation of agricultural producers. Another regime involves the system in the form of a single tax on imputed profits for certain types of activities. However, among other persons who are parties to the transaction, there are those who do not apply the above tax regimes.
- One of the parties is not obliged to pay tax for the profits of the enterprise.But at the same time, the other party is not relieved of such duties. What else do controlled transactions of the RF Tax Code imply?
- At least one of the parties acts as a resident of a special economic zone or is a participant in it, and the state regime in this territory provides for special privileges in corporate income taxes.
- A large transaction must satisfy several conditions in parallel. First, one of the parties must act as a taxpayer and take into account profits and losses on transactions. Any other party may not be considered a taxpayer. Or it may be a taxpayer, but it has the right not to take into account profits and losses on transactions when determining the tax base.
- At least one of the parties is a member of an investment project that applies the tax rate for institutions, which is to be credited to the federal budget.
- At least one party to the transaction is a research corporate institution that enjoys exemption from taxpayer duties.
Transactions that are not considered controlled
The following options of transactions are not recognized as controlled:
- The parties to the transaction are persons from the same combined group of taxpayers, which was formed according to the Tax Code. The exceptions are those operations whose subject is mined minerals, which is considered to be the object of taxation. At the same time, within the framework of production, taxation should occur at a special rate, which is set as a percentage.
- The parties to the transaction are participants who simultaneously satisfy several requirements. One of such requirements is registration in one subject of the state. In addition, interdependent persons should not have separate subdivisions on the territory of other subjects of the country, as well as beyond its borders. Another requirement is that participants do not have to pay corporate income tax to the budgets of other regions of the country. In addition, participants in the transaction should not have losses taken in the calculation of corporate income taxes. Also, another requirement is that there should be no circumstances for declaring the transactions made controlled.
- Transactions between taxpayers that occur during the implementation of any activity that is associated with the extraction of hydrocarbons in one of the offshore fields.
- Interbank loans with a total period of up to seven days inclusive.
- In the sphere of military and technical cooperation of Russia with foreign countries.
- Transactions to provide guarantees in situations where all parties are Russian institutions that are not banks.
- Transactions related to the provision of interest-free loans that occur between participants who are interdependent, whose place of registration or residence is Russia.
Goods controlled transactions
A controlled transaction is a transaction that is considered to be such if its subject is goods that are part of one or more of the following categories:
- Oil and the like. In this situation, products derived from petroleum products are meant.
- Black metals.
- Non-ferrous metals.
- Precious metals.
- Mineral fertilizers.
The codes of goods that were listed above, according to the nomenclature of economic activity,established by the authority that performs the functions of the development of public policy, and, in addition, the regulatory and legal regulation in the sphere of foreign economy.
Transactions are also considered controlled in situations where the amount of profit on them is more than sixty million rubles. At the same time, it takes into account the income from transactions that were made by one person for the full calendar year.
The amount of profit on the totality of transactions is determined by adding the income received for the full calendar year. As part of determining the amount of profit on transactions, the executive body authorized to control taxes has the right to verify compliance of the income received with the market volume.
Based on the application of the authority authorized to control the tax sphere, the court may recognize the operation as controlled if there are sufficient grounds to believe that it is part of a group of homogeneous operations.
So, the Tax Code assumes, in particular, the following criteria for transactions that are considered controlled:
- Transactions occur between participants who are interdependent, as well as serving residents of the country.
- Foreign trade transactions with a resident from an offshore zone in the amount of more than sixty million rubles.
- Foreign trade transactions between participants are interdependent. In this case, the amount of profit does not matter.
Criteria for controlled transactions must be respected. At the same time, the law lists transactions that are not recognized as controlled, regardless of whether they satisfy the above criteria or not.
Such transactions in particular include transactions between institutions that simultaneously meet the following requirements:
- Institutions are registered in one subject of the country. At the same time, they do not have separate subdivisions in the territories of other subjects and abroad, including.
- Enterprises do not pay taxes on income to the budgets of other subjects of the state.
- There are no losses that are taken into account when calculating taxes on income. In this case, losses from previous periods are taken into account, which are carried forward to future stages.
Options for determining profit
According to the Tax Code in the framework of the control of transactions that occur between participants, the following methods for determining profits are used:
- Method of comparing market prices.
- Cost of subsequent implementations.
- Costly way.
- The option of comparable profitability.
- Receptions in the distribution of profits.
It is possible to use a combination of two or more methods. It is worth noting that the method of comparing market prices is considered a priority in most situations.
Examples of controlled transactions are presented below.
Deals and penalties
According to the law, non-payment by taxpayers of sums within the framework of the use of commercial conditions in controlled transactions that are not comparable with the requirements between persons, involves the collection of the following fines:
- In the total amount from twenty percent of the unpaid tax. This penalty applies to periods from 2014 to 2016.
- In the amount of forty percent of the unpaid amount, but not less than thirty thousand rubles. This penalty relates to tax periods starting from 2017.
Independent adjustment of tax liabilities in the framework of controlled transactions
Taxpayers have the right to independently adjust their tax liabilities in connection with the use of prices in transactions between participants that do not correspond to the market level in order to avoid bringing to justice for tax offenses.
Adjustment of the bases, as well as the corresponding amounts must be made at the end of the calendar year, which includes tax periods, the amounts of which are required to be settled:
- In respect of individuals, this occurs simultaneously with the filing of the declaration no later than April 30 of the year that follows the completed tax period.
- For organizations, the adjustment should take place simultaneously with the filing of the income tax declaration not later than March 28 of the year that follows the completed period.
According to Art. 105. 14 of the Tax Code of the Russian Federation the period for value added tax is considered a quarter. And for mining taxes, such a period is one month. Tax adjustments are reflected in revised returns for each of the periods in which price deviations were recorded. These declarations are submitted simultaneously with the documents on the taxes on the profit of institutions.
The amounts of arrears revealed by the taxpayer as a result of an independent adjustment must be repaid within a period not later than the moment the institutions pay the profit tax for the relevant period. That is, this should be done no later than March 28 of that year, which follows the completed tax period. It is important to bear in mind that for the period from the moment of arising of arrears until the expiration of the established redemption period, there is no penalty on their amount.
Controlled transactions: term, duty and address of notification
Who submits a notice of controlled transactions?
Information on transactions made by the taxpayer in the current calendar year is indicated in the notification. This notice is sent to the tax authority at the place of its location no later than May 20 of the year following the period in which the controlled transaction was made. Persons who are classified as large taxpayers submit these notices to the tax authorities at the place of registration.
In the event that the taxpayer fails to provide a notice to the appropriate authority about controlled transactions that he performed in a calendar year, he will be fined five thousand rubles.In the event that a person provides inaccurate information, he will also receive a fine in the amount of five thousand rubles.
Depending on the choice of taxpayers, a notification of completed transactions can be provided, either according to the established scheme - on paper, or according to the approved format in electronic form.
The form of notification of completed controlled operations, along with the procedure for filling in and submitting it electronically, is approved by the federal executive body, which is authorized to control, and, in addition, to supervise in the field of taxes as agreed with the Ministry of Finance. The form of notification must be approved by the Federal Tax Service.
In the event that incompleteness of information is found along with inaccuracies or errors in filling in the submitted document on controlled transactions, the taxpayer has the right to send an updated version of the notification.
What information should the taxpayer indicate in the notification?
So, information about the conducted controlled transactions should contain the following information:
- Calendar year.This section indicates the year for which they provide information on controlled transactions conducted by taxpayers.
- The subject of the transactions and their brief description.
- Information about all participants in transactions. In this section, you must specify the full name of the institution, as well as the TIN in the event that the company is registered with the tax authority in Russia. In addition, if we are talking about an individual entrepreneur, it is required to provide his surname, first name and patronymic, as well as the TIN. Civilians provide exactly the same information.
- In one of the sections of the notification is required to specify the amount of profit. In addition, you will need to report the amount of losses incurred as a result of controlled transactions.
Thus, directly the essence of controlled transactions is applied in the domestic legislation regarding the control of the transfer value of transactions between participants, which are interdependent.