News:

Date added: 20.05.2016

Important notice: Law&Trust no longer work in Russia. Transfer of operational control over Law&Trust in Russia to local management and the formation of the LegalCraft brand was started in 2022 and came into effect in October 2024.

The first assertion that we will try to refute will be that only Russian citizens fall under deoffshorization. We assure you that this is fiction. Forversed and knowledgeable citizens, there is a risk of being misled by the fact that the new rules and regulations apply only to Russian enterprises in which structure there are foreign assets.

In fact, the problem of introducing deoffshorization provisions arises not only for Russian businessmen, but also for foreign entrepreneurs, who want to invest in Russia.

New regulations pose a number of questions about the financial returns and the appropriateness and rationale of their investments. It should be noted that from the moment the legal or natural foreign person receives the status of a tax resident in Russia, deoffshorization norms will apply to them.

The second false assertion that we refute will be that the companies registered in jurisdictions with good reputationdoes not fallunderdeoffshorization. This is not true. New deoffshorizationprocesses cover not only the Panama Islands and similar "gray" jurisdictions, but also the European territories, including Great Britain, Germany and Austria.

Now, the Russian taxpayer must report to the tax authorities on participation in controlled foreign companies and comply with the regulations that are in accordance with the law.

The third statement that weundertake to dispel will be that the process of deoffshorizationis only for controlled foreign companies. In reality, new changes in the tax legislation now implement new norms that introduce such subjects as the "Russian tax resident" and the "actual recipient of income"into our working vocabulary.

Nowadays,the foreign enterprise after its recognitionas the Russian tax resident will need to pay tax to the Russian treasury from all the total income received anywhere in the world.

Considering the new provisions on the "actual recipient" of income, relevant changes can level the usefulness of some structures.

Now, when the loan is issued by the Cayman enterprise through the Panamanian organization that does not conduct any functional activity in relation to this loan, does not bear any responsibility according to it, then when paying interest income on this loan, the Russian loan debtor can pay 20% of the amount to the source or withholding tax. And even having a signed international treaty with this country, this amount will not be less.

And the last false assertion is that if you do not inform the tax authorities about your activities, they will remain ignorant. There is a false, but fixed myth that own foreign assets can easily be hidden out of view of the state apparatus. This fiction proceeds from the fact that the list of data on enterprises, as well as their owners, that registered in other states can not be received by the tax institutions of the Russian Federation.

In fact, this is not correct statement. Current international treaties provide for a number of mechanisms for the exchange of information between tax authorities of different countries. Further, it is planned to launch the process of automatic data exchange of this kind, which will enable the Russian tax authorities to obtain the necessary data automatically from their foreign partners.