Distinguishing Related Parties from Affiliates. Related persons. Related persons and tax law of the Russian Federation
The concept of "related parties" is defined in the Transfer Pricing Law, which entered into force on January 1, 2009, and accordingly, this concept began to be used in the Tax Code on January 1, 2009, so everything is logical.
We are just discussing here clause 39 of article 12 of the Tax Code-2009. So I'm just trying to prove that this definition does not at all exclude payments on loans to a related party.
| MoonflowerA says: |
| Here is also the answer from the Tax Code of the Ministry of Finance on this topic. Message number 32 |
Great link! And she just confirms my point of view.
The essence of this answer is that before January 1, 2009 there was a restriction on the deduction of remuneration paid to all non-residents, and since January 1, 2009, this restriction applies only to non-residents registered in a country with preferential taxation.
In addition, from January 1, 2009, the same restriction was introduced for:
- related parties.
- independent parties for loans provided against a deposit or a secured guarantee.
I quote:
Please note: not a prohibition on attribution to deductions, but a limitation in accordance with paragraph 2 of Article 103 of the Tax Code. That is, the amount of deductions for such remuneration is calculated according to the formula given in clause 2 of article 103.
Until January 1, 2009, the amount of deductions for remuneration was also calculated using a formula, only it was described in words in the Tax Code. If we use the designations of the current Tax Code, then it will look like this:
A + (SK / CO) * (PC) * B
Here
A - the amount of remuneration paid to residents
B - the amount of remuneration paid to non-residents
From the structure of this formula, it can be seen that remuneration to residents of A is deducted without any restrictions, and remuneration to non-residents is calculated as (SK / CO) * (PC) * B.
There are no rewards for related parties here, because this concept as such was not in the NDT. That is, there used to be interconnected parties too, but since they were not singled out or determined in any way, such rewards were included in the total amount A and were fully deducted.
Since January 1, 2009, this formula looks like this:
(A + D) + (SK / CO) * (PC) * (B + C + D)
A - the amount of remuneration specified in paragraph 1 of Article 103;
B - the amount of remuneration paid to the related party;
B - the amount of remuneration paid to persons registered in a state with preferential taxation;
D - the amount of remuneration paid to an independent party for loans provided against a deposit or a secured guarantee, surety or other form of security for related parties, in the event of a guarantee, surety or other form of security;
D - the amount of remuneration for credits (loans) issued by a credit partnership established in the Republic of Kazakhstan;
It can be seen from this formula that the sums A and D refer to deductions without any restrictions, but a restriction is imposed on the sums B, C, D. But this does not mean that the entire amount of remuneration to the related party cannot be deducted! It is possible, but only in the amount calculated as (SC / CO) * (PC) * (B + C + D). Moreover, note that the sums B, C, D are included in this formula on an equal footing, i.e. the amount of deductions is calculated for all these amounts in the same way.
Therefore, if yours, MoonflowerA, auditors claim that
| MoonflowerA says: |
| these costs are no longer deducted. |
then you should not take on deductions and remuneration C and D, if you follow the logic of your auditors.
On the other hand, it is asked why it was then to include in this formula the amount of B - the amount of remuneration paid to the related party, if it cannot be deducted at all. Then it would have written in the Tax Code: remuneration paid to a related party is not deducted. Or the formula then had to be made like this:
(A + D) + (SK / CO) * (PC) * (B + G) + 0 * B.
Lending to related borrowers carries a significant risk due to the high likelihood of their simultaneous default on their obligations to the bank. That is why the identification of groups of related borrowers is an important part of the lending process and a mandatory element of risk management in a credit institution.
Legal connection
The legal relationship of borrowers is most fully defined in Russian legislation and bylaws of the Bank of Russia. It is based on the presence between borrowers in terms of capital (participation in capital) or organizational and managerial ties (Table 1).
The concept of a legal connection was first established by Art. 64 Federal law dated 10.07.2002 No. 86-FZ "On the Central Bank Russian Federation(Bank of Russia) ", according to which the borrowers who are dependent on each other or main and subsidiaries are referred to as related.
To determine the specified categories of borrowers, the rules of Art. 105 and 106 of the Civil Code of the Russian Federation (hereinafter - the Civil Code of the Russian Federation). So, according to its article 105, a business company is recognized as a subsidiary if another (main) company or partnership, due to the prevailing participation in its authorized capital, or in accordance with an agreement concluded between them, or otherwise has the ability to determine the decisions made by such a company. ...
In this case, the prevailing participation is the ownership by one borrower of more than 50% of shares or shares in the authorized capital of another. The ability to determine the decisions made by the borrower arises by transferring the powers of the sole executive body, introducing appropriate restrictions in the charter, or exchanging management personnel (the entry of employees of one borrower into the management bodies of another).
Article 106 of the Civil Code of the Russian Federation provides for the recognition business society dependent, if another (dominant, participating) company has more than 20% of its voting shares (stakes in the authorized capital).
A much broader list of grounds for classifying borrowers as related is contained in clause 4.6 of the Bank of Russia Instruction No. 110-I dated January 16, 2004 "On mandatory bank ratios" (hereinafter referred to as Instruction No. 110-I).
Table 1
| Criteria for legal bondage of borrowers | ||
| Criterion | Regulations | Signs of connectivity |
| Borrowers are a subsidiary and parent company in relation to each other |
Art. 64 of the Federal Law of 10.07.2002 No. 86-FZ "On the Central Bank of the Russian Federation (Bank of Russia)"; Art. 105 and 106 of the Civil Code of the Russian Federation. |
The share of one borrower in the authorized capital of another is more than 50%; |
| Borrowers are dependent on each other | - the share of one borrower in the authorized capital of another is more than 20% | |
| One of the borrowers has a significant influence on the decisions made by the other borrower |
p. 4.6 of Instruction No. 110-I; |
The share of the borrower (in aggregate with the shares of individuals and legal entities associated with him) in the authorized capital of another borrower is more than 50%; |
| A third party (not a bank borrower) has a significant influence on decisions made by borrowers | - one and the same third party can have a significant influence on several borrowers on the grounds set out above | |
| Borrowers are part of a banking group or bank holding company | - another credit organization (or other person) - the borrower of the bank, according to the criteria set out above, can seriously affect the borrowing credit organization | |
| Borrowers are members of the same family or close relatives | - borrowers - individuals, including those registered as individual entrepreneurs, are spouses, parents, children, adoptive parents, adopted children, relatives or half-siblings (having a common father or mother) brothers and sisters, grandfathers, grandmothers and grandchildren in relation to each friend | |
According to this normative act borrowers - legal entities are included in the group of related, if one of them can directly or indirectly (through third parties) significantly influence the decisions made by the management bodies of the other borrower (other borrowers), or a third party has a significant direct or indirect influence on the decisions, accepted by the governing bodies of another borrower (other borrowers).
New in this definition is the emergence of indirect influence (through third parties), as well as the need to include in the group of related borrowers, whose decisions can be influenced by the same third party. This makes it possible to summarize the share of the borrower in the authorized capital of another client of the bank with the shares of individuals and legal entities associated with him.
In addition, it is necessary to take into account the presence minority shareholders(equity holders), which allows, even in the absence of a controlling stake, to determine the decisions made by the borrower.
It should also be noted that one individual has combined managerial positions in the management bodies of several clients of the bank. At the same time, within the framework of Instruction No. 110-I, the participation of bodies state power, bodies local government and state corporations in the authorized capital of legal entities is not considered as a basis for classifying them as a group of related borrowers.
The instruction also contains a rather controversial requirement from the standpoint of banking practice to refer individuals to a group of related clients, including individual entrepreneurs(hereinafter referred to as individual entrepreneurs) who are close relatives. Based on Art. 5 of the Criminal Procedure Code of the Russian Federation and Art. 14 of the Family Code of the Russian Federation, such persons can be recognized as a spouse, spouse, parents, children, adoptive parents, adopted children, grandfathers, grandmothers, grandchildren, full-blooded and incomplete (having a common father or mother) brothers and sisters.
This approach seems to be justified only for spouses who have a joint budget and are responsible for the obligations of each of them with all jointly acquired property. For other categories, its use is illogical: despite the close relationship, the majority of borrowers - individuals do not depend on each other, since they have absolutely different sources income. Therefore, the occurrence of financial difficulties in one of them will not necessarily lead to their occurrence in the other.
Meanwhile, this approach is enshrined in regulatory documents The Bank of Russia, and, despite its imperfection, commercial banks must apply it.
The responsibility for identifying the legal relationship is usually assigned to the legal service, to which all the constituent documents of the borrower and documents confirming the powers of its managers are submitted for analysis. There also go to the agreements of trust management, simple partnership concluded by the borrower and any agreements at the disposal of the bank, which, in the opinion of the credit inspector, may contain conditions limiting the activities of the client.
At the same time, the conclusion of an employee of the legal service must contain a list of individuals and legal entities that can significantly influence the decisions made by the borrower.
It is also mandatory for a security officer to participate in this process, who, at the stage of consideration of a loan application, should identify and reflect in his conclusion the facts that the borrower's managers combine their duties with work in other organizations, that the main founders and managers have shares (stakes) in other companies, their registration as an individual entrepreneur.
For this, both publicly available databases (for example, information from the official website of the Federal Tax Service, the SPARK System for Professional Analysis of Markets and Companies, etc.) and confidential information sources are used.
Economic connection
The economic approach to the connectedness of borrowers is based on their financial dependence, i.e. borrowers - legal entities and individuals are considered as related, deterioration financial situation one of which causes or makes it probable that the financial situation of the other will deteriorate, which may be the reason for non-performance ( improper performance) to them obligations to the bank.
For the first time in domestic banking practice, the concept of economic ties was applied in the Letter of the Bank of Russia dated September 10, 2004 No. 106-T “On the calculation of the maximum risk ratio per one borrower or a group of related borrowers (N6)”. It recommended to draw a conclusion about classifying borrowers as related on the basis of comparing the amount of obligations under a surety (guarantee) issued by one borrower to secure the obligations of another borrower and (or) the amount of obligations of one borrower to another with the amount of its net assets.
X 1 =
,
where DP- obligations under the guarantee agreement (issued guarantee) provided by the borrower 1 as security for the obligations of the borrower 2;
THEN- current requirements of borrower 1 to borrower 2 ( receivables);
TK- claims of borrower 1 to borrower 2 under loan agreements;
CHA- net assets of borrower 1 as of the last reporting date.
If the value of X 1 is 10% or more, it can be concluded that the borrowers are classified as related.
This approach does not seem entirely justified, since the amount of liabilities is determined at the reporting date and does not take into account the nature of the relationship between borrowers during the reporting period.
The selected value of 10% of the borrower's net assets is also insufficiently justified. Many enterprises (mainly engaged in trade) do not have significant equity capital, so most of their counterparties will fall into the category of related ones. So, for example, all agricultural enterprises in the region that purchase from a major supplier mineral fertilizers with a deferred payment, will have to be automatically assigned to the group of related ones and their crediting will be significantly hampered.
It should be noted that individual entrepreneurs and enterprises under the simplified taxation regime are not able to use the “net assets” indicator, since they are exempt from the obligation to draw up a balance sheet.
Also unsuccessful, in our opinion, is the proposal of some experts to establish dependence not on net assets, but on the share of each debtor in the total amount of the borrower's receivables.
Despite the large share, in absolute terms, the amount of accounts receivable may be insignificant for the borrower and its loss will not significantly affect his financial condition.
At the same time, according to the position of the Bank of Russia 1, a sign of the deterioration of the financial condition of the borrower is the presence of uncollectible claims in the amount equal to or exceeding 25% of its net assets.
In connection with the above, it seems appropriate to use the amount of balance sheet claims (accounts receivable, debt under loan agreements acquired securities etc.) and off-balance sheet obligations under contracts of surety, guarantee, pledge, provided as security for obligations to third parties. At the same time, in order to exclude the influence of single transactions (primarily for enterprises wholesale trade) only accounts receivable with a maturity of more than 12 months are included in the calculation.
Net assets were selected as a comparison base for enterprises that provide the tax authorities with a balance sheet, and for other persons, revenue for the last completed year.
X 2 =
*100%,
where THAT debt- claims of borrower 1 to borrower 2 for current liabilities (accounts receivable with a maturity of over 12 months);
Central Bank- purchased by the borrower 1 securities of the borrower 2;
DZ- the residual value of the property of the borrower 1, provided as security for the obligations of the borrower 2 under the pledge agreement;
NS- other obligations of the borrower 1, the fulfillment of which is associated with the insolvency of the borrower 2 (avaled bills of exchange, obligations to compensate for losses, etc.);
CHA (BP)- net assets as of the last reporting date (for enterprises compiling the balance sheet) or revenue for the last completed year (for other persons) of the Borrower 1.
The conclusion about the attribution of borrowers to the group of related ones is made when the value of the indicator X 2 is equal to or exceeds 25%. It seems that the use of this indicator will make it possible to determine the level of financial dependence of one borrower on another with a sufficiently high accuracy.
However, there are a number of more complex cases that do not fall under the above formula: for example, when lending to a mining company and a trader associated with it, but not formally affiliated. With timely calculations, borrowers do not have significant obligations to each other, however, in any case, the financial condition of a trader critically depends on the solvency of the mining company.
To regulate such cases, in 2005 the Bank of Russia developed and published on its official website a draft directive “On the mandatory standard for the maximum amount of credit risk for a group of economically related borrowers”, taking into account international practice - recommendations of the Basel Committee on Banking Supervision and international financial reporting standards.
This project referred to economically connected borrowers persons involved in a single economic (production, investment, sales, trade, research) cycle, including those involved in the joint production of the final product at different stages, organizing joint marketing, conducting general scientific research.
Although this guidance was not accepted, the approaches proposed by it can be used commercial banks when developing their own regulations defining the procedure for assigning borrowers to a group of related ones.
Three criteria should be noted as the most significant and formalized to the maximum extent: dependence on sales; on consumed raw materials, on pledged property.
It seems that borrowers can be considered sales dependent if one of them occupies more than 25% in the structure of the other's annual revenue, and the sale of products to other buyers cannot be established within the next 30 calendar days(due to the specificity of the manufactured products, territorial remoteness, strong competition in the market, etc.).
Dependence on consumed raw materials arises if the share of one supplier exceeds 25% of the total supply, and the time for organizing supplies from alternative sources is at least 30 calendar days longer than the period for spending the available stocks.
The value of 30 days in both cases was adopted in accordance with the approaches recommended by the regulator 2. If the borrower has financial difficulties and stops purchasing products (supply of raw materials), the client associated with him will not be able to pay off his obligations to the bank and after 30 days the debt service on his loans will be recognized as “average” 3.
The basis for classifying it as related is also the pledging by the borrower of property (even if its residual value is less than 25% of net assets) as security for the obligations of another borrower, if its implementation will lead to the termination of the pledger's production. This property includes the main production lines, building, land etc.
All three proposed criteria have a common drawback - dependence on subjective opinion. Meanwhile, their competent application will allow, on the basis of the professional judgment of the credit officer (or risk manager), to limit the risk of lending to enterprises that do not fall under the formal criteria of connectedness.
In a generalized form, the criteria for the economic connectedness of borrowers can be presented as follows (Table 2).
table 2
| Criteria for economic connectedness of borrowers | |
| Criterion | Signs of connectivity |
| Financial dependence | The amount of claims of borrower 1 to borrower 2 (accounts receivable over 12 months, indebtedness under loan agreements, purchased securities) in conjunction with the obligations of borrower 1 under agreements of surety (guarantee), pledge, etc., provided as security for the obligations of borrower 2 to third parties exceeds 25% of net assets (for enterprises that make up the balance sheet) or revenue for the last completed year (for other persons) of the borrower 1. |
| Sales dependency | Borrower 1 occupies more than 25% of the annual revenue of borrower 2 and the sale of products to other buyers cannot be established within the next 30 calendar days (due to the specificity of the products, territorial remoteness, strong competition in the market, etc.). |
| Raw material dependence | Borrower 1 provides more than 25% of the supply of raw materials of borrower 2 and the time for organizing supplies from alternative sources will exceed the time during which the reserves of borrower 2 will be used up by at least 30 calendar days. |
| Dependence on pledged property | Borrower 1 pledged property as security for borrower 2's obligations to third parties, without which he would not be able to continue producing his products (main production lines, buildings, land plots, etc.). |
| Dependence by source of income | Individual borrowers have a common employer who is also a bank borrower. |
Informal communication
When lending to small and medium-sized businesses, a situation often occurs when there is no formal legal or economic connection between borrowers, but in fact their activities are controlled by one person who controls various companies and / or individual entrepreneurs through dummies.
Usually, such a scheme is used by officials who are forbidden or undesirable from the point of view of their image to combine civil service with entrepreneurial activity(leaders municipal districts, employees of legislative and executive authorities, police, prosecutors, etc.). In the regions, such persons are often among the most attractive borrowers and form a significant part of the loan portfolios of local banks and regional branches.
It should be noted that this practice can also be used by fraudsters who, by conducting fictitious transactions for the sale and purchase of products between several formally unrelated persons, “inflate” the proceeds and turnover on current accounts, and then apply for a loan to each of the companies. If the connection between them is not identified, credit projects may be submitted to different credit officers for consideration, which will find it difficult to assess the real creditworthiness of each of the borrowers.
Despite the fact that identification of informal connections of borrowers and suppression of their fraudulent activities in most banks is entrusted to the security service, the loan officer (or risk manager) may well do this at his own level. In practice, the following methods have proven their effectiveness (Table 3).
Table 3
| Methods for identifying informal communication between borrowers | ||
| Method | Sourse of information | Signs of customer connectedness |
| Analysis of turnovers on the settlement accounts of the borrower | Bank current account turnover | Providing loans on a regular basis to another client (receiving from another client), financial aid, making payments to third-party organizations on account of mutual settlements. |
| Analysis of the structure of the customer's revenue and expenses in the context of buyers / suppliers | Turnovers on the current account in the bank, information provided by the client (upon request) | A significant share of one supplier / buyer, the presence of "counter" payments. |
| Analysis of accounts receivable and payable, loans | Explanations of balance sheet items | The presence of "counter" claims (one and the same client is both a debtor and a creditor). To exclude the influence of "one-off" transactions, the analysis is performed as of several key dates. |
| Analysis of sources of repayment of the principal debt on the loan and accrued interest | Turnovers on settlement, loan accounts in the bank | Repayment of the principal debt and / or accrued interest is carried out at the expense of Money received under loan agreements or dubious supply agreements. If such operations are repeated several times and are intended solely for repayment of an ordinary loan payment, it can be concluded that customers are connected. |
| Coincidence at the place of registration of borrowers | Extract from the Unified State Register of Legal Entities, professional systems(for example, SPARK), the results of a visit to the place of business | Location of borrowers at the same address, maintenance accounting several clients by the same person, signing of contracts by the same person by power of attorney. |
The presence of such signs does not yet indicate the connectedness of the borrowers, however, it requires additional verification by the bank's security service. Based on its results, the credit inspector (or risk manager) can conclude that certain borrowers are assigned to a group of informally related ones.
conclusions
As a rule, regulations for identifying groups of related borrowers are developed by commercial banks only in connection with the need to comply with the requirements of the regulator; they do not show interest in developing their own criteria for their assessment. This is due to the fact that in the short term, excessive diversification is unprofitable for the bank. Refusal to lend to several members of a group of related borrowers entails a loss of interest income and may even lead to the departure of the entire group for servicing to another bank.
Nevertheless, in the long term, credit institutions should avoid excessive concentration of the loan portfolio on several groups of clients. In a crisis, even the most reliable borrowers may experience problems with loan repayment, which will certainly affect financial result jar. That is why the bank's services, and primarily the risk management service, need to identify the relationship between borrowers at all stages of the credit process and strictly control the level of concentration of credit investments.
1
Clause 3.4.1 of the Regulation of the Bank of Russia dated March 26, 2004 No. 254-P “On the procedure for the formation by credit institutions of reserves for possible losses on loans, on loan and equivalent indebtedness”.
2 Letter of the Banking Regulation and Supervision Department of the Bank of Russia dated 02.11.2005 No. 15-1-1-9 / 2916 “On some aspects of assessing the quality of loans”.
3 Subject to the application by the bank of the Bank of Russia Ordinance No. 2156-U dated 23.12.2008 “On the Specifics of Assessing Credit Risk for Issued Loans, Loan and Equivalent Debt”.
Affiliates are interdependent entities, however, it is risky to identify these definitions, despite the obvious similarity of concepts. Let's see why.
Affiliation - essence and application
A detailed understanding of affiliation is given by Art. 4 of the Law "On Competition ..." dated 03.22.1991 No. 948-1, not only setting out the essence of this concept, but also listing the persons considered to be affiliated to legal entities and individual entrepreneurs.
Affiliation, this law calls the ability of legal entities and individuals to influence the activities (decision-making, performance) of legal entities and individual entrepreneurs. The Civil Code of the Russian Federation (Art. 53.2) links such influence with the onset of legal consequences and equates affiliation with the definition of "connectedness".
For a legal entity, the following will be affiliated:
- individuals who are members of the collegial management bodies of them or governing solely (including this applies to the collegial and sole leaders of the governing bodies of a financial and industrial group, if the legal entity is a member of such a group);
- persons (both legal and physical) owning more than 20% of its authorized capital;
- legal entity or individual who form a common group with him.
For individual entrepreneurs, affiliation arises in relation to:
- legal entities in which he owns more than 20% of the authorized capital;
- legal entities or individuals who form a common group with him.
The general group is considered (Article 9 of the Law "On Protection of Competition" dated July 26, 2006 No. 135-FZ) if there is:
- for an individual or legal entity - more than 50% share in the authorized capital of the organization;
- from the legal entity:
- the sole executive body, represented by both individuals and legal entities;
- persons (individuals or legal entities) entitled to issue instructions that are binding on them (including recommendations for the appointment of a sole or collegial executive body);
- two legal entities - management, more than half consisting of the same persons;
- for a natural person - a spouse (wife) and close relatives (including on the basis of adoption rights);
- for persons (individuals or legal entities) already included in a certain group - other persons (individuals or legal entities), relations with whom correspond to the signs of entering the group;
- one of the persons (individuals or legal entities) forming the group - more than 50% share in the authorized capital of the organization.
The concept of affiliation is used in a variety of legal areas, for example, such as legislation:
- on taxes (clause 2 of article 269 of the Tax Code of the Russian Federation);
- bankruptcy;
- issue of securities;
- JSC and LLC;
- labor (in terms of dismissal of the heads of the Federal State Unitary Enterprise);
- communication.
Interdependence is a concept that is significant for the Tax Code of the Russian Federation
In tax legislation, despite the presence of the term “affiliated persons” in the Tax Code of the Russian Federation (clause 2 of article 269), the concept of interdependence is more widely used. Deciphering its essence and a list of situations in which persons are interdependent contain Art. 20 and 105.1 of the Tax Code of the Russian Federation.
Interdependence occurs when persons (legal or natural) have the ability, independently or through their dependent persons, to influence:
- conditions of the concluded transactions;
- the results of concluded transactions or the results of the activities carried out.
Influence can be carried out through:
- participation in the authorized capital;
- an agreement concluded between persons;
- other possibilities.
- legal entity and legal entities and individuals with a share in its authorized capital exceeding 25%;
- 2 legal entities having in each of them more than 25% of the participation of the same person;
- a legal entity and legal entities or individuals who have the ability to appoint its sole executive body or at least 50% of the composition of the collegial body (including through their interdependent persons);
- 2 legal entities whose collegial management body consists of more than 50% of the same people.
- a legal entity and its sole executive body, as well as 2 legal entities that have the same sole executive body;
- legal entity and legal entities or individuals who along the chain (in each subsequent organization) have a participation share exceeding 50%;
- individuals with relationships based on subordination;
- individuals who have a spouse or close relatives (including on the basis of the rights of adoption), as well as those who are in a guardianship relationship.
In relation to an individual, the size of his share in a legal entity is assessed by the totality of participation not only of himself, but also of individuals who are interdependent for him (spouses, close relatives, as well as those with whom relations arose on the basis of adoption or guardianship).
Possible recognition of interdependent persons:
- voluntarily declaring themselves as such;
- by a court decision, including on grounds not listed in Art. 105.1 of the Tax Code of the Russian Federation.
Not recognized as addiction-based:
- transactions, the conclusion of which is due to the predominant position of its participant (participants) in the market;
- participation of the state or its subjects in Russian legal entities.
The presence of interdependence is taken into account in such matters of tax legislation as:
- transactions subject to control (Articles 40, 45, Ch. 14.2-14.5 of the Tax Code of the Russian Federation);
- taxation of personal income tax on income from material benefits (Articles 212, 217 of the Tax Code of the Russian Federation);
- determination of the amount of property tax deduction (Article 220 of the Tax Code of the Russian Federation);
- restoration of the depreciation bonus in case of early (before the expiration of 5 years from commissioning) sale of fixed assets (clause 9 of article 258, subparagraph 1 of clause 1 of article 268 of the Tax Code of the Russian Federation);
- determination of the amount of interest on debt obligations taken into account in expenses when calculating income tax (Article 269 of the Tax Code of the Russian Federation);
- application of tax incentives for movable property registered after 2012 (clause 25 of article 381 of the Tax Code of the Russian Federation);
- taxation of foreign legal entities operating in the territory of the Russian Federation (Articles 306, 308, 309.1 of the Tax Code of the Russian Federation).
Affiliates and related parties - differences
Even with a cursory glance, it becomes obvious that there are inconsistencies in the concepts under consideration, that is, it should be recognized that affiliated persons and interdependent persons are not the same thing. Since the concept of affiliation is used more widely, interdependence can be considered a particular version of it, applied only in one specific area. Or, more simply, interdependent persons are affiliated persons for the purposes of the Tax Code of the Russian Federation.
Both concepts are very similar both in meaning and in describing situations of affiliation (interdependence). Discrepancies occur on the following points:
- the minimum participation of a legal entity or individual in the authorized capital of an organization for affiliation is 20%, and for interdependence - 25%;
- the criteria for recognizing interdependence by kinship are broader than with affiliation, since they additionally contain a guardianship relationship;
- for the interdependence of individuals, there is such a criterion as a relationship of subordination, which is absent in affiliation;
- interdependence can be recognized voluntarily or by court order, which is not accepted for affiliation.
And, of course, the spheres of application of the concepts under consideration differ significantly.
What lies behind the definition of "related parties"
There is another definition that arises in connection with affiliated persons and related persons - this is the concept of “related parties” used in PBU 11/2008 (approved by order of the Ministry of Finance of Russia dated April 29, 2008 No. 48n). According to the text of this document, parties related to a legal entity are legal entities and individuals capable of influencing its activities, or those legal entities and individuals whose activities may be influenced by a legal entity.
The number of persons recognized as related parties in relation to the legal entity making accounting using RAS 11/2008 include:
- persons affiliated with him (both legal and physical);
- organizations and individual entrepreneurs conducting joint activities with him;
- non-state pension funds accumulating pension funds of employees of a legal entity or other organization that is a related party for it.
The use of PBU 11/2008 turns out to be mandatory with a significant level of influence. However, legal entities using simplified accounting methods may not be guided by this document.
Outcomes
Affiliates and interdependent persons are different concepts based on different documents and applied in different areas of legislation. With a significant similarity in their meaning, there are a number of significant discrepancies between them.
National and international standards for related party accounting
The enterprise should reflect the approaches to the classification of related parties in the order on accounting policy (clause 2.1 of Methodology No. 635).
From the point of view of national accounting standards, related parties include (clause 3 of P (C) BU 23):
- enterprises that are under control or significant influence other persons;
- businesses and individuals (including close members of their family) who directly or indirectly control the company or significantly affect its activities.
Under control is understood decisive influence on the financial, economic and commercial policy of an enterprise or entrepreneurship in order to obtain benefits from its activities (clause 4 of P (C) BU 19).
As can be seen from the definition, the decisive influence, and hence the control itself, are evaluative criteria. The criterion "significant influence" (analogue of decisive influence) is also not unambiguously disclosed in P (S) BU. The following principles, laid down in the P (S) BU and additionally explained in the Method Recommendations, will help us to determine these criteria, approved by order of the Ministry of Finance dated June 27, 2013 No. 635:
- company on one's own determines the list of related parties, taking into account the essence of the relationship, and not only the legal form (the prevalence of the essence over the form) (Art. 4 of Law No. 996, clause 2.23 of Methodology Recommendations No. 635);
- the actual influence on operations may be exercised by a person who has the appropriate power powers, which enable him to manage the most significant types of activities through the management bodies formed by him (clause 4 of NP (S) BU 2).
For example, investor appoints commercial director, which is authorized to select suppliers and an assortment of assets (goods, materials, etc.), to acquire and sell assets, that is, to manage a significant type of activity. In practice, the director concludes contracts with those suppliers that the investor indicated to him. Thus, the investor, through the director, influences the decision-making in the enterprise and can be recognized as a person connected with the enterprise.
Other examples of authority, signs of power at the investor enterprise, the signs of the most significant types of activities are given in the appendix to NP (S) BU 2.
Examples of relations between related parties are contained in clause 3.2 P (C) BU 23. In particular:
1) between legal entities these are relations:
- parent (holding) enterprise and its subsidiaries;
- the investor company and its associates (the investor has significant influence over them, but they are not its subsidiaries or joint ventures);
- joint venture and controlling participants in joint activities;
2) between legal entities and individuals is the relationship:
- enterprises and individuals who control such an enterprise directly or through close members of their family or have a significant influence on it;
- the enterprise and its head and other persons who belong to the leading management personnel of such an enterprise, as well as to close family members of these persons ( spouses, children, other relatives considered close according to current legislation).
It follows from the examples given that control over an enterprise can be formal and informal.
Formal, that is, legally secured, for example, is considered to be control between a parent and a subsidiary in a holding, when the parent company fully controls the subsidiary.
TO informal control refers to the relationship between an investor and an enterprise. In this case, the decisions of the investor can be either accepted or rejected by the enterprise. And here everything depends on the degree of materiality of the investor's influence on the enterprise.
We emphasize that there are no cost or quantitative criteria for the connectedness of persons by the criterion materiality of influence for the enterprise P (S) BU does not install. At the same time, IFRS norms in this matter are more specific. So, according to § 6 of IAS 28 formal (legalized) significant influence- This is the ownership, directly or indirectly, of 20 or more percent of the voting rights in the investment object until the opposite is clearly proven. Conversely, if an investor owns, directly or indirectly, less than 20% of the voting rights in the investee, then it is assumed that he has no significant impact, until such influence is clearly demonstrated.
Thus, according to the content of the operation, its volume, the result obtained, one can actually establish how significantly such an operation influenced the financial, investment, commercial activities enterprises. At the same time, it is necessary to analyze who specifically initiates and approves the conduct of transactions, makes decisions on the financial and operational policy of the enterprise, and determine the powers of these persons in accordance with the constituent and other documents of title. Only an analysis of the totality of all factors makes it possible to reliably establish the relationship of a particular person with an enterprise.
Tax legislation on the criteria for relatedness of persons
Tax legislation for transfer pricing purposes also requires an entity to identify related parties. Business transactions that affect the taxable object of the parties to the transaction fall under control if they are carried out between residents and related parties - non-residents directly or through intermediaries (non-resident commission agents) (clause 39.2.1.1 of the Tax Code).
The wording of tax rules regarding related persons is somewhat different from the accounting ones, but the general meaning, so to speak, the ideology of recognizing related persons, is the same. For the purposes of transfer pricing, related parties are legal entities and / or individuals, the relationship between which may affect conditions or economic resultstheir activities or the activities of the persons they represent.
The criteria for the connectedness of persons are formulated in paragraphs. 14.1.159 NK. Let's pay attention to a number of fundamentally important points.
1. The Tax Code adopted an international approach to determining significant impact to the enterprise as connectivity criterion persons: the threshold is direct or indirect (indirect, i.e., through other persons) ownership of corporate rights legal entities but in size 20 and more percent(hereinafter referred to as the “20%” rule) (clause 14.1.159 of the Tax Code).
2. The signs of connectivity for legal entities, individuals and legal entities, as well as individuals are written out separately (clauses "a" - "c" clauses 14.1.159 of the Tax Code).
3. Appeared completely new feature connectedness of persons: the excess of the amount of all loans (loans), returnable financial assistance received by a legal entity either directly from an individual or another legal entity, or under their guarantees, over the equity of such a legal entity by more than 3.5 times, and for financial institutions and companies, carrying out exclusively leasing activities - more than 10 times (paragraph eight of clause "a", paragraph five of clause "b" of clause 14.1.159 of the Tax Code). This feature is directly related to the concept Thin capitalization company when its capital consists of a small number of shares ( equity) and a large number of bonds (borrowed capital). Dividends on shares are subject to taxation, while the accrual and payment of interest on bonds is not. This can be used to withdraw capital from the country (in fact, dividends are withdrawn, and formally - interest). The new limiting factor is intended to moderate the appetites of beneficiaries in such a scheme.
4. Factor of direct or indirect participation of the state in legal entities by itself (without taking into account other factors) is not a condition for their recognition as related parties.
5. For natural person close family members who are believed to be related to him are clearly identified. This is a husband (wife), parents (including adoptive parents), children (adults and minors, including adopted children), full and half brothers and sisters, guardian, trustee, child over whom guardianship or guardianship has been established ...
6. All corporate rights owned (directly and / or indirectly) by a legal entity in another legal entity are sum of shares corporate rights that:
- directly belong to such a legal entity in the capital of another legal entity;
- belong to any party associated with such a legal entity in the capital of another legal entity.
7. Share of ownership of corporate rights is calculated as follows:
- in the case of indirect ownership in one chain - by multiplying the shares of ownership of corporate rights;
- possession through several chains - by adding the shares in each chain;
-
if the share of ownership of corporate rights of each person in the next legal entity in the chain exceeds 20%, all persons in such a chain are considered linked, regardless of the results of multiplying the shares
Challenges in calculating corporate ownership interests
The above rules for calculating shares look quite harmless, but in practice they are not always easy to apply. The point is that in real life configurations of interdependent companies are not only simple linear chains (that is, companies participating in the capital of each next member of the chain) or “scallops” (one company participates (or influences) 20 other companies, or 20 unrelated companies are participants in the 21st company).
There are schemes of the so-called cross participation, when one company is directly involved in another, and that, in turn, participates in the first. There are also schemes annular participation, that is, the company through a chain of other companies indirectly participates in equity capital.
These schemes can be built deliberately or arise spontaneously when there is a merger and division of companies, changes in the size of the shares of participants, the entry of new participants who pull their own chains of related persons, etc. The structure of the company's ownership is not something forever frozen. Rather, it resembles a living, functioning organism. At the same time, changes in the capital of one of the companies in the chain can affect any of its members.
Note that the calculation of shares in complex schemes is carried out according to the formula geometric progression, when there is a sequence of numbers - members of the progression (the sizes of the shares of the participants in the chain), in which each next number, starting from the second, is obtained from the previous one by multiplying it by a certain number (the denominator of the progression).
If there is a large group of companies in which it is necessary to determine the lines of connectivity, and at the same time in the structure of the group there are cases of cross or ring ownership of corporate rights, a set of equations converted into matrix.
It is clear that these wisdom cannot be written down in NK. However, almost half a year has passed since January 1, 2015, when the new rules for determining related parties began to operate, and the Ministry of Finance has not yet provided any clarification on how in practice to calculate shares for various configurations of interdependent companies and individuals.
Well, you have to figure it out yourself. In the next article, we will look at simple examples basic principles of calculating shares with direct and indirect ownership of corporate rights.
In the legislation, there are several concepts and terms related to the subjects, one way or another participating in the activities of other persons. The tax legislation uses the concept of "interdependent persons", accounting and the legislation of the EAEU contains the concept of "related persons (parties)". Connected persons are persons who influence or have the ability to influence the activities of other business entities.
Related persons in accounting
The Tax Code of the Russian Federation directly indicates that this list of criteria is not exhaustive and can be supplemented by the court.
Dependent entities may become subject to special control by entering into a transaction if:
- income from transactions of related parties is over 1 billion rubles;
- one party (or several parties) of the transaction is a special regime, and the other party (parties) is not;
- one party calculates income tax in accordance with ch. 25 of the Tax Code of the Russian Federation, and the other is not;
- the party to the transaction participates in the investment project, as a result of which it has income tax benefits.
Control for separate types transactions, in particular, is aimed at preventing the withdrawal of the tax base to offshores and a more equitable distribution of the tax base in the regions of our country.
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