The Fine For Mispriced Russian Imports Just Hit 100%. Here Is Why Customs and Tax Read the Same Deal Differently
A company importing goods from a foreign parent entity faces the same dilemma every time, with no comfortable answer. A low purchase price saves on Russian corporate income tax and draws customs scrutiny at clearance. A high price clears the border cleanly and draws the tax authority’s attention to profit shifting abroad.
Since 2024, the cost of getting the price wrong in either direction has grown sharply. The fine for a non-market price in a cross-border transaction has risen to 100% of the tax shortfall, and any amount above market value is now reclassified as a dividend subject to a separate withholding tax. At the same time, the Federal Customs Service (FCS) and Federal Tax Service (FTS) exchange data automatically and flag discrepancies between customs declarations and tax records without manual work by an inspector.
Why Customs and Tax Interests Do Not Align
The Federal Tax Service (FTS) administers corporate income tax. Its risk is an inflated purchase price from a foreign related party. The higher the price, the more expenses the Russian buyer recognizes, and the less taxable profit stays in the country.
The Federal Customs Service (FCS) administers import duties and import VAT. Its risk runs the opposite way. The lower the declared value at the border, the fewer customs payments reach the budget. An importer ends up between two demands: justifying a high price to one agency looks like grounds for a challenge from the other.
Methodology diverges too. Tax law (Section V.1 of the Tax Code) offers five transfer pricing (TP) methods, including the transactional net margin method, which evaluates a company’s overall financial result for the year. Customs law is built on a hierarchy of six valuation methods, with Method 1 (transaction value of the specific shipment) taking priority. Customs generally does not accept an importer’s overall profitability as an argument: a high margin can be explained by marketing in the Russian market and does not always reflect the market level of the purchase price.
Not every transaction falls under control. For domestic controlled transactions between related parties, the threshold is annual income above 1 billion rubles. For transactions with foreign related parties, the threshold is much lower, at 120 million rubles a year. As a result, a noticeable share of import operations, even at mid-sized companies, falls under controlled-transaction rules, including purchases of substances, components, and finished products from foreign parent structures.
| Parameter | FTS | FCS |
|---|---|---|
| Primary risk | Overstated import price | Understated import price |
| Object of control | Cumulative annual expenses | Value of a specific shipment |
| Methodology | 5 TP methods, Tax Code Ch. 14.3 | 6 customs valuation methods, EAEU Customs Code |
| Control period | Retrospective, full year | Per shipment, plus three years after release |
What Changed in 2024-2025
Federal Law No. 539-FZ of 27 November 2023 introduced the most extensive amendments to Section V.1 of the Tax Code since it appeared in 2012. The law widened the grounds for treating parties as related and introduced the concept of a secondary adjustment.
The mechanics of a secondary adjustment are simple. If the FTS proves during an audit that a transaction price with a foreign related party deviated from market value, the amount of the deviation is treated as a dividend paid to that party from a source in Russia (Tax Code, Art. 105.3, cl. 6.1). A withholding tax is charged on top of that amount. For an importer, overstating the purchase price no longer just means recalculated expenses; it now triggers separate taxation of the price gap itself.
The scale of the combined burden is easiest to see on a hypothetical example. If the gap between the price used and the market price on a deal comes to 10 million rubles, the additional income tax assessment at the 25% rate is 2.5 million rubles. That same amount is treated as a dividend to the foreign recipient and taxed at the 15% withholding rate, another 1.5 million rubles. On a cross-border deal, the tax shortfall can also carry a fine of up to 100% of its amount, up to 2.5 million rubles more. Before interest, the combined burden on the price gap can exceed half its value.
Fines have also grown. For domestic controlled transactions the rate has not changed: it stays at 40% of the unpaid tax, at least 30,000 rubles (Tax Code, Art. 129.3). For transactions with foreign related parties that fall under the expanded controls, the fine has reached 100% of the unpaid amount since 2024, at least 500,000 rubles. Separately, as of the same date, a standalone fine of 500,000 rubles was introduced for failing to submit documentation on a controlled transaction, a fine that did not exist before. The fine for failing to submit notification of controlled transactions rose from 5,000 to 100,000 rubles.
| Violation | Penalty before 2024 | Penalty from 2024 |
|---|---|---|
| Unpaid tax, transactions with foreign related parties | 40% of shortfall | 100% of shortfall, minimum 500,000 ₽ |
| Failure to submit TP documentation | No direct fine | 500,000 ₽ |
| Failure to submit notification of controlled transactions | 5,000 ₽ | 100,000 ₽ |
A transitional rule applies to documentation. The package for 2024 transactions could be filed until 1 December 2025 (Law No. 539-FZ, Art. 6, cl. 10), and that deadline has already passed. If the 2024 documentation is not ready, closing the gap should happen as soon as possible: at audit, a missing package is grounds for a separate fine regardless of whether the price itself was at market level. Documentation requested by the FTS outside an audit must be submitted within 30 calendar days.
On the customs side, the main control instrument is EEC Board Decision No. 42 of 27 March 2018 on the specifics of customs control of the customs value of goods imported into the Eurasian Economic Union (EAEU). It gives customs the right to request TP documentation if there are signs that the parties’ relatedness affected the transaction price. In practice, a package prepared to defend an income tax position can be used by customs to argue the opposite: that the price was understated. A separate risk area involves royalties and intermediary commissions. If paying them is a condition of the sale, the FCS requires including these payments in the customs value, and since 2025 the practice on commissions has become stricter.
Agencies are exchanging data more actively. With the tax service’s assistance, customs collected more than 11.5 billion rubles in additional payments in 2024, 70% more than a year earlier. At the same time, the success rate of ordinary FTS field audits held at 98% in 2024.
The average additional assessment nationwide was 65 million rubles per audit, rising to 101 million rubles in Moscow. These figures relate to enforcement in general, not only to transfer pricing cases. They still set the backdrop: the odds that a gap between the customs and tax price goes unnoticed keep falling every year.
The trend is reinforced by digitalization. Russia’s national goods traceability system has operated since 2021 and expands its list of product categories every year. Importers are required to state the batch registration number on invoices and in reporting. In parallel, the FCS is developing a «smart customs» program built on artificial intelligence: in one such pilot, foreign-trade participants voluntarily grant customs access to their inventory systems in exchange for an individual moratorium on inspections. Both tracks serve one purpose: narrowing the gap between what a company declares at the border and what it reports for tax purposes.
A similar problem exists outside Russia. The Organisation for Economic Co-operation and Development (OECD) publishes annual statistics on Mutual Agreement Procedures (MAP) and Advance Pricing Arrangements (APA), the mechanisms countries use to resolve transfer pricing disputes between themselves. Current figures on how long these disputes take to resolve and on the share of countries using APAs should be checked against the latest OECD report before publication: open sources show different numbers from year to year.
In practice, a unified defense file rests on three blocks: a functional analysis of the corporate group that shows who performs which functions and bears which risks, an analysis of comparable transactions or companies to support the market price level, and a separate section on how relatedness affected the price of a specific shipment. The third block rarely appears in standard tax documentation. It is exactly what customs looks at first.
What To Do
Gather evidence of market pricing for existing transactions with foreign related parties. Prepare the justification for two audiences at once: wording that satisfies the FTS on overall profitability should also explain the price of a specific shipment for customs.
Check the status of your 2024 TP documentation. The 1 December 2025 deadline has passed. If the package does not exist, assemble it as a priority: missing documentation is grounds for a 500,000 ruble fine regardless of the audit’s finding on the price itself.
Synchronize the customs and tax files. If a retrospective price adjustment is made at year-end to bring profit to market level, reflect it in the customs value and notify customs within a reasonable time. A delay in notifying customs is a frequent cause of misdeclaration allegations.
Assess royalties and intermediary commissions within the price structure. If paying them is a condition of the supply, expect the FCS to require including these amounts in the customs value, especially for transactions concluded after August 2025.
For high transaction volumes, consider an advance pricing agreement (APA) with the FTS. Such an agreement does not remove the risk of a customs challenge directly. It becomes a strong argument in a later court dispute.
Splitting the work between the customs and tax departments no longer protects a company, because both agencies read the same figures. A working approach rests on a single document that explains the purchase price from both perspectives at once, before either agency sends a request.
Regulatory framework:
1. Federal Law No. 539-FZ of 27 November 2023, «On Amending Parts One and Two of the Tax Code of the Russian Federation»
2. Tax Code of the Russian Federation, Articles 105.3, 129.3, 129.4 (Section V.1)
3. Customs Code of the Eurasian Economic Union
4. EEC Board Decision No. 42 of 27 March 2018, «On the Specifics of Customs Control of the Customs Value of Goods Imported into the Customs Territory of the Eurasian Economic Union»