The senators drafted bills of Russian economy deoffshorization

12.03.2014

At meeting of the Federation Council Budget and Financial Markets Committee which took place on March 3, 2014 the Committee’s Chairman Sergey Ryabukhin stated that “in coming days bills drafted by senators will be introduced to the State Duma”.

He marked that currently there are more than 200 ways of tax avoidance and about 10 trillion rubles stay in offshores. One of the novelties is going to be a new principle in a Tax Code of Russia – preventing and crossing tax sheltering. A bill “Amendments to Tax Code of Russia” enacts procedure of fiscal rescript which means that a taxpayer receives a writing opinion by tax bodies indicating non-existence of rights abuse as illegal tax sheltering”.

The amendments can affect the Budget Code. Particularly the case involves enacting the law provision of required disclosure of ultimate beneficiary by all legal entities – participants of budget process.

The most important amendment is amendment to the Criminal Code. The amendment entails such a punitive measure as forfeiture of estate for tax criminals.

Based on: http://www.pnp.ru/news/detail/52482

Expert’s opinion

There are many talks about deoffshorization during this year. Noasinglestatewillnotapprovewithdrawalfromittotheoffshores.

HerewithexerciseofoffshoresdoesnotcontraveneRussianandinternationallawanddoesnotcontravenethenationallegislationofastatewherethecompanyisincorporated.

Indeed offshore companies now include English, Cyprus and Swiss. Nevertheless none of the above-mentioned states does not provide zero tax rate.

The broad legal framework of double taxation agreement allows to run the business true and legal. Andeverybusinessstructuremustbe revisedandprofitable.

It is hard to predict the development of request/ response system of tax bodies in Russia. As a practical matter we often face with unprofessional performance and incompetence of lawyers. Receiving the rescript as legislative response by tax bodies seems to be troublesome.

Irina Lomakina ( Director of “Honest & Bright” Company Moscow office)