Interdependent persons. Article 20 of the Tax Code

On January 1, 2012, Federal Law No. 227 entered into force. This law introduced some amendments to a number of regulatory acts, including the Tax Code. In particular, a new section was introduced in part one. Let's consider it in more detail.

General Changes

The new section introduces other principles for determining the value of products, works and services used for tax purposes. Previously, Art. 40. At present, its effect extends only to operations whose expenses or income were recognized (according to Chapter 25) before the date of entry into force of Federal Law No. 227. A similar situation has developed with Art. 20 Tax Code of the Russian Federation. It was substantially supplemented by a new law. The adjustments made to the Tax Code entailed a change in the basis for establishing compliance with the market value of prices that are used in controlled contracts. The legislation provides descriptions of such business operations, the procedure for informing enterprises of control bodies about them.

Interdependent taxpayers

The legislation provides an extended list of them. Interconnected persons are considered such entities, the features of relations between which may affect the results, the terms of contracts concluded between them, the economic results of their activities or the work of other organizations. When classifying enterprises in this category, the degree of impact that may occur due to the participation of one entity in the capitals of others is taken into account. Recognition of individuals as interdependent is carried out on the basis of an analysis of contracts and other possibilities for the firm to influence decisions made by other enterprises. In this case, the effect is taken into account regardless of how it is. Influence can come from one entity or from its joint activities with other interdependent organizations / individuals.

Important point

According to Art. 105.1 Tax Code Citizens or organizations acting as parties to agreements may independently recognize themselves as interdependent persons. The grounds for this may be cases not provided for in paragraph 2 of this article. In addition, the provisions of paragraph 7 of the same norm allow recognition by the court of interdependence in other situations not established by paragraph 2. However, in this case, interactions between entities must have the characteristics prescribed in paragraph one.

The organization

The following entities are related parties:

1. One company is indirectly or directly involved in another. Moreover, its share is more than 25%.
2. One person participates in organizations indirectly or directly. Moreover, the share is more than 25%.
3. In companies, by the decision of one person, the following were elected or appointed:

• Executive Sole Bodies.
• At least 50% of the composition of the collegial structure, board of directors.

Organizations in which the same individuals make up more than half of the board of directors and the executive collegial body are also recognized as interdependent. They are also considered those in which the authority of the executive (sole) body is exercised by one entity.

Citizens

If one person is subordinate to another by official position, then these entities are considered interdependent. In ordinary life, there are also interactions whose participants can be attributed to the category in question. So, citizens may have the following interdependent persons:

1. Spouse.
2. Children (including adopted).
3. Guardians / Trustees.
4. Parents / adoptive parents.
5. Wards.
6. Half and full sisters and brothers.

Art. 20 of the Tax Code of the Russian Federation, establishing a circle of subjects, refers to the UK.

Taxation of related parties

As mentioned above, in order to classify subjects into the category under consideration, the nature of the agreements concluded by them is analyzed. According to Art. 105.3 (clause 1), if financial, commercial and other conditions are established in agreements between interdependent parties that are different from those characteristic of comparable agreements of other entities, then any profit that could be made, but due to the indicated difference, was not received was taken into account when calculating contributions to the budget. Accounting under paragraph one of this article is carried out in the event that this does not lead to a decrease in the amount of mandatory payment.

Exceptions

They are cases of applying symmetric adjustment. It is explained in Art. 105.18. If the control body, according to the results of the audit, will additionally charge the company the amount in accordance with the market value, then domestic companies acting as other parties to such agreements can use these prices when calculating a number of mandatory payments:

1. VAT. Interdependent persons calculate this fee if one of the parties is an individual entrepreneur who is not its payer, or an organization exempt from payment.
2. Personal income tax (calculated according to Article 277).
3. Mining tax. This fee is calculated if one of the parties to the contract acts as its payer. At the same time, the transaction of interdependent persons is concluded with respect to a mineral, which is considered an object from which mandatory contributions to the budget are made at a rate determined in percentage terms.
4. Corporate income tax.

Ways to determine income

How are they determined? Establishing the profit that interdependent persons receive in tax legal relations, control authorities apply the following methods:

1. Comparable market value.
2. Resale prices.
3. Costly method.
4. Comparable profitability.
5. Profit distribution.

Explanation

Legislation allows the use of a combination of two or more methods. According to paragraph 3 of Art. 105.7. Priority is given to the method of comparable market value. It is used in most cases when determining the correspondence of prices. An exception is situations when a product is bought within the study transaction and then resold without processing under an agreement to which non-interdependent parties are parties. In such cases, the priority is the application of the upcoming sale price method. However, this technique is used when the resale entity does not own intangible assets that have the ability to significantly affect the level of gross margin of his enterprise. The upcoming sale price method can also be used if certain operations are performed during subsequent sales. For example, it could be:

1. Preparation of products for resale and transportation. In particular, it includes: dividing goods into batches, sorting, forming shipments, repackaging.
2. Mixing products, if the properties of the final products (semi-finished products) do not have significant differences from the characteristics of the mixed products.

The use of other methods is allowed in cases where the use of a method of comparable market value is impossible or does not allow a reasonable conclusion to be made about the discrepancy or conformity of prices.

Supervised Operations

Considering the agreements concluded by interdependent persons, the Tax Code of the Russian Federation establishes signs of their controllability. In particular, this category includes operations carried out by entities whose place of residence, registration, residence of beneficiaries and all parties of which is the territory of Russia, unless otherwise provided by Article 105.14 (paragraphs 3, 4 and 6). It must be said that loans from related parties can also be recognized as controlled. In this case, one of the following conditions must be met:

1. The amount of profit on transactions for the reporting period exceeds the limit established by law (in 2013 - 3 billion rubles).
2. One of the parties to the agreement acts as the payer of the mineral extraction tax calculated at the rate determined in%, and the subject of the agreement is an object that falls under such a calculation. Such transactions will be considered controlled if their total income for the calendar year is more than 60 million rubles.
3. At least one of the participants acts as a payer in one of the following modes:

• UST;
• UTII for certain types of activity, if the transaction is concluded within one of them.

In the latter case, one of the parties should be a subject who does not use special regime.

Other conditions

Contracts concluded by interdependent parties will be considered controlled, except for compliance with the requirements of Art. 105.14 (paragraph 2) if one of the following conditions is met:

1. At least one of the participants is exempted from paying deductions from income or applies at it a rate of 0% according to the provisions of paragraph 5.1 of Art. 284. At the same time, the other party pays or does not use the zero rate. Contracts concluded by interdependent parties under these conditions will be considered controlled if the profit on them exceeds 60 million rubles. for the reporting (calendar) year.
2. At least one of the participants acts as a resident of the SEZ, the regime in which provides for special preferential conditions for deduction from the company's profit (in comparison with the usual scheme for calculating mandatory budget payments). The other side in this case should not belong to the category of these entities.

Comparable Contracts

Contracts concluded by interdependent parties may be equated with controlled ones. They must have appropriate characteristics. In particular, a set of transactions involving the sale of products, the provision of services, and the performance of work carried out through mediation or with the participation of persons who do not act as interdependent, taking into account a number of circumstances, is considered controlled. In particular, third parties:

1. Within the specified set of transactions, they do not perform any other (additional) functions, except for organizing the sale of products / performance of work or the provision of services by one participant to another, which is considered the first interdependent.
2. They do not accept any risks and do not use assets to carry out the above activities.

Supervisory Authority Notification

Payers are required to notify the tax service of their transactions, provided for in Art. 105.14. The relevant information is sent to the authority at the place of residence, location, accounting as the largest payer. The notification must be sent no later than May 20 of the year following the reporting year in which the indicated transactions were completed. If incompleteness of information, errors or inaccuracies in the design of documents is revealed, the payer may provide revised declaration. The notice shall indicate:

1. The year for which it is provided.
2. Subjects of transactions.
3. Information about the parties to the contracts.
4. The amount of profit received and the amount of expenses on controlled transactions. At the same time, costs / revenues under contracts are allocated, the prices of which fall under regulation.

Data can also be prepared for a group of homogeneous business transactions (transactions).