The State Tax Service released analytical guidance on 11 September 2026 clarifying how commercial discounts, year-end bonuses, and credit notes affect the revenue base for controlled transactions reported in the Annual Controlled Transactions Report (Form No. 1.1). The guidance interprets Article 39 of the Tax Code and OECD Transfer Pricing Guidelines (2022), emphasizing that the transaction price must reflect the net amount actually payable after all retrospective adjustments. This is critical for multinational groups with centralized procurement or distribution models where rebates are granted post-year-end.
Key Takeaways
- Net Revenue Principle: The controlled transaction revenue must be reported net of all bona fide discounts, bonuses, and credit notes agreed upon in the intercompany agreement, even if issued after the reporting period.
- Documentation Requirement: Taxpayers must maintain contemporaneous documentation linking each adjustment to the specific controlled transaction and demonstrating arm’s length nature.
- Audit Focus: The Tax Service will scrutinize post-year-end credit notes lacking supporting agreements during 2026-2027 transfer pricing audits, with potential profit adjustments under Article 39(7).
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement