Introduction

The economic and business environment in Russia changed significantly following the fall of communism in 1991. Free market reforms (instead of transacting at predetermined regulated prices), opening foreign trade (which was monopolised by the government until then) and introduction of the modern tax system played very important roles in this transition, exposing Russia to the forces of globalisation shaping the modern economic system. Transfer pricing becomes especially important in this context.

However, it would be surprising if transfer pricing in Russia would be a developed concept given that the tax system, in the Western sense of the expression, has only a twenty-year history in modern Russia. However, transfer pricing is an important feature of the Russian tax and political landscape, especially given the commodity bias of the Russian economy.

Following this introduction, this chapter covers the following topics: (ii) economic and institutional context; (iii) historical background of transfer pricing legislation; (iv) overview of the key aspects of the Russian transfer pricing legislation; (v) administrative procedures to resolve transfer pricing disputes; (vi) trends in the domestic court practice on transfer pricing issues; (vii) bilateral and multilateral approaches to transfer pricing disputes; (viii) recent developments in the area of transfer pricing; and (ix) concluding remarks, including the author’s opinion on the likely routes for future developments in this area.