International Top 30 position: 4

Transfer pricing court cases

A series of tax disputes involving Russian automotive market distributors (namely Mazda Motors Rus, Suzuki Motors Rus and Hyundai Motor CIS), and the application of article 40 RF TC, is currently before the commercial courts. The distributors posted losses for 2009–10, which, in the opinion of the Russian tax authorities, shows that the multinational automotive corporations shifted profit by applying overstated transfer prices with dependent distributors in Russia. These court cases may affect the application of ‘new’ transfer pricing rules.

On 17 July 2014, the Moscow District Federal Arbitration Court returned the Mazda Motors Rus case for retrial on the basis that the lower court had not examined the possibility of the tax authorities applying the comparable uncontrolled price for identical/homogeneous goods method (article 40.4 RF TC). The tax authority’s assertion that there were no identical/homogeneous goods on the market because Mazda Motors Rus is the exclusive dealer of Mazda vehicles in Russia was not, in the opinion of the cassation court, sufficient for application of the resale price method (MD FAC No. А40-4381/13 of 12 July 2014)…

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