The key points regarding Federal Law No. 340-FZ of 27 November 2017 in Russia are:

1. The law requires members of multinational enterprise (MNE) groups with annual consolidated group revenue over RUB 50 billion to file a Country-by-Country (CbC) Report, global documentation (Master File), and national documentation (Local File), as well as a notification on their membership in an MNE group.
2. The law took effect on the date of its official publication (November 27, 2017), and its provisions will apply to fiscal years starting in 2017 (except for the provisions regarding Local File).
3. The law contains a number of other important amendments, such as:
   • The Notification must also contain information on whether the taxpayer is included in the list of strategic enterprises or is a subsidiary of such an enterprise.
   • The law provides rules for converting value indicators in the Master File when the accounting currency of MNE group members differs from the currency of the ultimate parent entity.
   • The law clarifies that the Notification, Master File, Local File and CbC Report should be submitted by taxpayers that are members of an MNE group, except for non-resident entities that do not have a permanent establishment in Russia.
4. The OECD review found that Russia has a domestic legal and administrative framework to impose and enforce CbC requirements, but recommended amendments to address certain issues related to filing exemptions, local filing conditions, and enforcement provisions.

In summary, Federal Law No. 340-FZ introduced new transfer pricing documentation requirements for large multinational enterprises operating in Russia, aligning the country with international standards on tax transparency and information exchange.

Federal Law No. 340-FZ of 27 November 2017 in Russia has the following key impacts on multinational enterprises (MNEs) operating in the country:

1. Country-by-Country (CbC) Reporting Requirement: The law requires MNE groups with annual consolidated revenue over RUB 50 billion (around $700 million) to file a CbC Report, providing a breakdown of the group’s revenue, profits, taxes paid, and other indicators on a country-by-country basis.
2. Master File and Local File Documentation: MNE groups must also prepare a global Master File and a Local File for their Russian entities, providing detailed information on the group’s organizational structure, business operations, and transfer pricing policies.
3. Notification Requirement: MNEs must notify the Russian tax authorities of their membership in an MNE group and provide information on whether they are included in the list of strategic enterprises or are a subsidiary of such an enterprise.
4. Alignment with BEPS Action 13: The law brings Russia’s transfer pricing documentation requirements in line with the OECD’s Base Erosion and Profit Shifting (BEPS) Action 13 recommendations on country-by-country reporting and master file/local file documentation.
5. Enforcement and Exchange of Information: The law provides the legal framework for the Russian tax authorities to collect and exchange this information with foreign tax administrations as part of the global effort to improve tax transparency.

Federal Law No. 340-FZ significantly increases the compliance burden for large MNEs operating in Russia by introducing new transfer pricing documentation and reporting requirements. This aligns Russia with international standards on tax transparency and information exchange between tax authorities.