Prime Minister Vladimir Putin chaired a meeting of the Government Presidium.Part 3
28 July 2008
В.В.Путин провел заседание Президиума Правительства Российской Федерации.
28.07.2008
Alexei Kudrin: You have given instructions to prepare amendments to the Tax Code connected with transfer pricing. Amendments that would bring under control the prices in transactions between affiliated persons, amendments that would make these transactions taxable in the same way as transactions at market prices. This is to prevent prices from being understated in such transactions between mutually affiliated persons, as a rule within one and the same company, a holding or a subsidiary company.
First of all, such deals with subsidiary companies are usually made outside the customs territory of the Russian Federation. It makes it easy to conceal the real price at which these goods are sold. The current legislation has an article that mandates control and says that the prices must not differ from market prices by more than 20%. But the control mechanisms are very vaguely described in the article and are hardly ever used in day-to-day court practice.
As part of preparing these amendments we have a chance to submit a new draft law which takes into account present-day experience, including international experience of monitoring such deals for the purpose of taxation. Let me note that this draft law does not limit such companies' freedom of price formation, but prescribes that they pay taxes on the market price.
During a meeting chaired by First Deputy Prime Minister Igor Shuvalov we agreed the principle of such a draft law. We are ready to submit it to the Government by September 15 and thereafter to the State Duma.
Vladimir Putin: I would like to make the following comment: first, there should be no rush. Work must proceed at an even pace in the framework of the activities that we have planned. Second, the Government must be absolutely neutral with regard to all the market participants and avoid any preferences. The rules of the game must be clear and transparent for everyone. The Government's role is to work out and protect these rules while securing its own interests.
Ms Nabiullina, what is happening in our market?
Elvira Nabiullina: We will submit to the Government the draft concept of creating international financial centres in Russia this week, before August 1. Considering the goals and tasks we set until 2020, we need a powerful financial centre. Creating an international financial centre is a priority that will increase the capitalisation of the economy and give our companies broader access to financial resources.
The concept is in the process of development. It envisages work in many areas. First, the development of the financial market proper. It is important that the rules be transparent, as you have said, and that the rules of the game be understandable. We need to expand the range of financial instruments to make them attractive for domestic and foreign investors. We need to develop the infrastructure of the financial market and of taxation.
Speaking about the creation of an international financial centre, in addition to the efforts to develop that market, several other factors are essential, including overall macroeconomic stability. All the financial instruments - the curbing of inflation, the stability of the banking system, the development of the transport and social infrastructure - all that is important for creating a major financial centre in the country. Educated personnel are also essential. The concept will be submitted this week. If it is approved, we are already preparing a schedule of actions to create the centre. All this will enable us to develop our own powerful financial market in Russia and to increase capitalisation.
Vladimir Putin: You surely know the opinion of the experts. If we are to have at least a regional financial market here we should develop trade in export goods for roubles. Does the concept contain that provision?
Elvira Nabiullina: Exchanges are being created, and of course we need to expand the sphere in which roubles are used to pay for our goods. This work is underway. It is part of the plan to create international financial centres. That work is important in its own right.
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Путин на заседании Правительстваby Coltsoff223 views
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