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First 'deoffshorization' bill reaches Russian parliament

13:30 22/10/2014

MOSCOW, October 22 (RAPSI) – A bill proposed by a group of lawmakers aimed at moving business activities of Russian companies from offshores back to the country has been submitted to the lower house of parliament, the State Duma, RIA Novosti reported on Wednesday.

The bill excludes from double taxation treaties individuals who establish offshore companies to flee to offshore jurisdictions to keep their assets there, Mikhail Yemelyanov from A Just Russia party said. Such individuals would have to pay taxes in Russia, according to Yemelyanov.

Requirements set in the bill could be toughened when it reaches the second reading, the lawmaker said.

The bill introduces the concept of a “controlled foreign company" (CFC) and a “controlling person”.

CFC is a foreign company or structure (trust, foundation, partnership) controlled by Russian tax resident, according to the bill. A person is deemed to control a foreign company if his interest in the foreign entity jointly with a spouse and minor children is more than 50%. Legal entity is deemed to control a foreign company if it posses a 25% stake.

President Vladimir Putin called in December 2013 for a renewed crackdown on Russian companies that dodge taxes by registering in offshore jurisdictions.

The Russian Ministry of Finance in March published on its website the text of a draft law on taxation of profits of controlled foreign companies.

Upper house members proposed to block the offshore companies access to state support via Vnesheconombank, state guarantees, and government contracts.

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First 'deoffshorization' bill reaches Russian parliament

13:30 22/10/2014 A bill proposed by a group of lawmakers aimed at moving business activities of Russian companies from offshores back to the country has been submitted to the lower house of parliament, the State Duma.
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