We kindly remind everyone that the deadline for filing a notice of participation in a Multinational Enterprise Group (the “Group”) for 2021 is approaching. The deadline date is August 31, 2022.

What is participation in a Multinational Enterprise Group?

A Multinational Enterprise Group is a group of entities that:

• Are interrelated through control or participation in capital;
• Prepare consolidated financial statements in accordance with the requirements of Russian laws or stock exchanges;
• Have among the participants of the Group:
  • At least one organization that is a resident of the RF or an organization that pays taxes on income from activities of a permanent establishment in the RF, and
  • At least one other entity that is either a non-resident of the RF or a resident of the RF, which is subject to taxation in a foreign country through a permanent establishment.

An entity is classified as a member of a Group if the following criteria are met:

• It is part of the Group;
• The information on it is recorded in the consolidated financial statements of the Group or is not included in them only due to the data on such entity being immaterial;
• It is a permanent establishment of a company that meets the above criteria.

Who is required to submit a notification of participation in a Multinational Enterprise Group?

Generally, every member of the Group that is a Russian resident or has a permanent establishment in the RF is obliged to submit a notification.

A company can be exempted from this obligation in the following cases:

• The tax authority is already aware of the company’s participation in the Group due to being mentioned in a similar notification of a Russian resident being the parent company, an authorized member of the Group, or a member of the Group which the parent company instructed to report for all participants of the Group;
• The total amount of the Group’s revenue is less than 50 billion rubles (if the parent company is a tax resident of the RF) or is below the minimum limit established for mandatory submission of the country report by the laws of the country of the foreign parent company’s residence (usually 750 mln euro).

The notification must be submitted electronically no later than eight months after the end of the parent company's financial period (generally by August 31). If a participant of a Group does not submit the notification on time or if the notification contains inaccurate information, it will be subject to a fine in the amount of 50,000 rubles (Article 129.9 of the Russian Tax Code).

We also remind everyone that, in addition to notification of participation in the Group, its participants, depending on their status in the Group and residency of the parent company, may be required to file other forms of reporting, i.e. a country report, global and national documentation.