Gaidar Forum outlines new strategy for Russia's international tax policy

During the expert discussion, Conceptual Framework for International Tax Policy, held as part of 2018 Gaidar Forum in 2018, leading tax experts discussed the impact of tax agreements on attracting foreign investment and domestic tax legislation in Russia, and the future rules of transfer pricing. The participants included Deloitte Partner Gennady Kamyshnikov; Director of EY Transfer Pricing Group Ruslan Radzhabov; Head of the information exchange section of the Federal Tax Service’s Transfer Pricing Department Alexandra Kadet.

According to the moderator, Senior Research Fellow at the RANEPA Laboratory of Tax Policy Research Nikolai Milogolov, the purpose of this meeting, initiated by the Russian branch of the International Tax Association and RANEPA leadership, is to mobilize the expert community to discuss long-term problems of tax policy and formulate a unified vision of the issue.

The speaker also noted that Russia is not party to the UN tax treaty, but has chosen the OECD model instead; still, the UN convention allows the income source country to keep wider rights and offers it broader benefits in the system of passive income taxation. The UN model is preferable for importer countries, and the OECD model, for the exporters, he added.

“In recent years, Russia’s imports have exceeded exports,” Milogolov said.

Deloitte Partner Gennady Kamyshnikov also noted the need for Russia's participation in the UN Convention’s work, but still admitted the validity of Russia’s commitment to the OECD model, since OECD’s position has been much more developed until recently.

The invited expert, Professor Daniil Vinnitsky, pointed out the US positive experience in attracting foreign investments – one of Russia’s priorities amid continuing capital outflow.

“They work to attract foreign investment to the US, but we do not even have free economic zones,” he said.

Professor of the Financial University under the Government of the Russian Federation Milyausha Pinskaya also noted the need to import capital into Russia. She reaffirmed the importance of importing technologies; therefore, agreements with other countries should imply zero taxation for the source of income.

During the discussion, tax expert Dmitry Nikolayev said, “In terms of rates, our taxation is one of the most liberal in the world, but people still do not want to bring their money back home. This suggests that taxes are not the main reason for the outflow of capital.” This problem should be dealt with as soon as possible, Nikolayev noted.

Director of EY Transfer Pricing Group Ruslan Radzhabov said transfer pricing is the best tool to determine the fair share of profits for various jurisdictions. However, he called for caution in drafting such regulations. “We should not copy the language without considering the local realities; we need a national perspective on existing OECD reports on transfer pricing, taking into account the Russian legal specifics,” he said.

At the end of the discussion, moderator Nikolai Milogolov noted that the key task for today is to achieve a balance between investment attractiveness and protection of the country’s tax base.

The organizers include the Presidential Academy of National Economy and Public Administration (RANEPA), the Gaidar Institute for Economic Policy (Gaidar Institute) and the Association of Innovative Regions of Russia (AIRR).

The program outline is available at the forum website.

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The general partners of the Gaidar Forum are Gazprom and Gazprombank; strategic partners include Novartis, Johnson&Johnson, RZD, MSD, AstraZeneca, the ACIG Group of Companies, Mastercard, Coca-Cola, Russian Agricultural Bank, Pharmstandard JSC, Microsoft; O1 Group, Unilever, EY, Russian Brewers’ Union, Russian Direct Investment Fund are partners and RVC.

The general information partners include the Rossiya 24 TV channel, RBC and TASS news agencies. The official information agency is Rossiya Segodnya. The general online media partner is Gazeta.RU. The general radio partner is Business FM. The strategic information partners are Kommersant Publishers, the RT TV channel and Interfax. The main information partners are Rossiyskaya Gazeta and Federalpress news agency. Other media partners include, PRIME news agency, EFE,, Expert RA, Radio Ekho Moskvy, Parlamentskaya Gazeta, BRICS, National Banking Journal, Banking Review, Financial One, Standards and Quality news agency, AK&M, Ekonomika i Zhizn weekly, Invest Foresight online magazine, Strategia magazine, Naans Media, the Public Administration scientific political journal, the PRO BUSINESS TV channel, the Indicator online science journal, the Bankovskoye Delo (Banking Business) magazine, RNS news agency, Business Excellence magazine, Cision, the Budget magazine, Information platform “Russian planet – Smart Russia”.