Capital Amnesty. Tax Messenger. Tax Edition

Transcription

1 2 February 2018 Tax Messenger Tax Edition Capital Amnesty EY s Russian Tax & Law practice was named a leading Tax firm in Russia in World Tax 2017, an annual guide published by the International Tax Review. On 30 January 2018 a package of three bills was submitted to Russia s State Duma: 1. A draft federal law Concerning the Introduction of Amendments to the Federal Law Concerning the Voluntary Declaration of Assets and Bank Accounts (Deposits) by Physical Persons and the Introduction of Amendments to Certain Legislative Acts of the Russian Federation (Draft Law No ) 2. A draft federal law Concerning the Introduction of Amendments to Parts One and Two of the Tax Code of the Russian Federation and Article 3 of the Federal Law Concerning the Introduction of Amendments to Parts One and Two of the Tax Code of the Russian Federation (Regarding the Taxation of Profit of Controlled Foreign Companies and Income of Foreign Organizations) (Draft Law No ) 3. A draft federal law Concerning the Introduction of Amendments to Article 76.1 of the Criminal Code of the Russian Federation (Draft Law No )

2 The draft laws provide for the capital amnesty programme which began in July 2015 to be extended until 1 March Second Declaration Phase Law No amends the federal law on the voluntary declaration by individuals of assets and accounts (deposits) by introducing a so-called second declaration phase, whereby an individual would have the right to submit a special declaration between 1 March 2018 and 28 February [1] The fact that a declaration was submitted in the first declaration phase does not prevent one from being submitted in the second phase. [2] And whereas in the first phase, declarants had to submit special declarations to the tax authority where they lived (or were staying) or to the central office of the Federal Tax Service, in the second phase the declarant may submit a declaration to any tax authority of his choice. [3] Individuals submitting special declarations in the second declaration phase would be granted the same guarantees as participants in the first phase, including exemption from liability for tax and currency offences. The guarantees in question would generally be granted to second phase participants with respect to acts committed before 1 January [4] Declarants in the second declaration phase would be able to provide information in a declaration not only on foreign accounts (deposits) which are in use at the time of submitting the declaration, but also on foreign accounts (deposits) which have been closed by that time (provided that the account in question was opened before 1 January 2018). [5] Draft Law No also vests the Ministry of Finance with authority to issue guidance on completing special declarations, which would be published on the ministry s official website. New Tax Amnesty Provisions Draft Law No adds provisions to the Tax Code which are needed in order to uphold the guarantees provided to declarants in the second declaration phase. In particular, it provides that tax is not to be recovered from a declarant if the obligation to pay it arose for the declarant and (or) another person before 1 January 2018 as a result of operations involving the acquisition (creation of sources for the acquisition), use or disposal of property (property rights) and (or) controlled foreign companies regarding which information is contained in a special declaration submitted in the second declaration phase. At the same time, the provision in question does not apply to tax liabilities in respect of profit and (or) property of CFCs. [6] The draft law adds another provision to the Tax Code according to which a CFC notification and a notification of participation in foreign companies are not considered to have been submitted late if the notifications are submitted together with a special declaration and information on the foreign companies in question is contained in that declaration. [7] Draft Law No inserts new provisions in the Tax Code setting out the procedure for determining expenses when calculating personal income tax in connection with the sale of securities received by the actual owner from their nominal owner if those securities and their nominal owner are indicated in a special declaration the amount of expenses actually incurred is taken to be the documented value of the securities as stated in the records of the transferring party on the date on which they were transferred (but not higher than the market value of the securities on the date on which they were received). [8] [1] Part 2 of Article 5 of the Law on Voluntary Declaration as amended by Draft Law No [2] Part 8 of Article 3 ibid. [3] Part 9 of Article 3 ibid. [4] Part 13 of Article 3 ibid. [5] Clause 3 of part 1 of Article 3 ibid. [6] Paragraph 2 of clause 2.1 of Article 45 of the Tax Code as amended by Draft Law No [7] Clause 3.1 of Article ibid. [8] Clause 13.3 of Article ibid. 2

3 Any income (including in monetary form) received by a shareholder upon the liquidation of a foreign company or a foreign unincorporated structure is exempt from personal income tax. [9] Under the current wording of the Tax Code, only income received in kind is exempted in such circumstances. In addition, the time limit for the liquidation of a foreign company or structure, which is one of the conditions for applying the exemption, is to be extended until 1 March The draft law similarly extends until 1 March 2019 the time limit within which the liquidation of a CFC must be completed in order for income and expenses of that CFC in connection with the sale of securities and property rights to a controlling person of the CFC to be excluded from the latter s profit (losses). [10] Adjustment of Guarantee Provisions under Criminal Law Draft Law No provides for the guarantees of exemption from criminal liability which are accorded by the Criminal Code to persons who submitted declarations in the first declaration phase to be extended to second phase declarants by stipulating that the latter are exempt from criminal liability for acts which they committed before 1 January [11] Authors: Dmitri Babiner Fedor Blinov Arseniy Arakelyan For additional information please contact the authors of this publication: Dmitri Babiner +7 (812) Dmitri.Babiner@ru.ey.com Fedor Blinov +7 (812) Fedor.Blinov@ru.ey.com [9] Clause 60 of Article 217 ibid. [10] Clause 10 of Article ibid. [11] Part 3 of Article 76.1 of the Criminal Code as amended by Draft Law No

4 Inquiries may be directed to one of the following executives: Moscow CIS Tax & Law Leader Peter Reinhardt +7 (495) Oil & Gas, Power & Utilities Alexei Ryabov +7 (495) Victor Borodin +7 (495) Financial Services Irina Bykhovskaya +7 (495) Maria Frolova +7 (495) Ivan Sychev +7 (495) Industrial Products Alexei Kuznetsov +7 (495) Vadim Ilyin +7 (495) Consumer Products & Retail, Life Sciences & Healthcare Dmitry Khalilov +7 (495) Real Estate, Hospitality & Construction, Infrastructure, Transportation Anna Strelnichenko +7 (495) Svetlana Zobnina +7 (495) Technology, Telecommunications, Media & Entertainment; Tax Performance Advisory Ivan Rodionov +7 (495) Tax Technology Sergey Saraev +7 (495) People Advisory Services Zhanna Dobritskaya +7 (495) Gueladjo Dicko +7 (495) Sergei Makeev +7 (495) Ekaterina Ukhova +7 (495) Cross Border Tax Advisory Vladimir Zheltonogov +7 (495) Marina Belyakova +7 (495) Transfer Pricing and Operating Model Effectiveness Evgenia Veter +7 (495) Maxim Maximov +7 (495) Tax Policy & Controversy Alexandra Lobova +7 (495) Alexei Nesterenko +7 (495) Global Compliance and Reporting Yulia Timonina +7 (495) Alexei Malenkin +7 (495) Sergei Pushkin +7 (495) Law Georgy Kovalenko +7 (495) Alexey Markov +7 (495) St. Petersburg Dmitri Babiner +7 (812) Anna Kostyra +7 (812) Vladivostok Alexey Erokhin +7 (914) Ekaterinburg Irina Borodina +7 (343) For information about Foreign Countries Business centers in EY Moscow office please follow the link. Private Client Services Anton Ionov +7 (495) Customs & Indirect Tax Vitaly Yanovskiy +7 (495) Transaction Tax Yuri Nechuyatov +7 (495) This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgment. Neither EYGM Limited nor any other member of the global EY organization can accept any responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication. On any specific matter, reference should be made to the appropriate advisor Ernst &Young (CIS) B.V.

5 EY Assurance Tax Transactions Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY works together with companies across the CIS and assists them in realizing their business goals. 4,800 professionals work at 20 CIS offices (in Moscow, St. Petersburg, Novosibirsk, Ekaterinburg, Kazan, Krasnodar, Togliatti, Vladivostok, Yuzhno- Sakhalinsk, Rostov-on-Don, Almaty, Astana, Atyrau, Bishkek, Baku, Kyiv, Tashkent, Tbilisi, Yerevan, and Minsk). EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. Contacts Almaty +7 (727) Astana +7 (7172) Atyrau +7 (7122) Baku +994 (12) Bishkek +996 (312) Ekaterinburg +7 (343) Kazan +7 (843) Kyiv +380 (44) Krasnodar +7 (861) Minsk +375 (17) Moscow +7 (495) Novosibirsk +7 (383) Rostov-on-Don +7 (863) St. Petersburg +7 (812) Tashkent +998 (71) Tbilisi +995 (32) Togliatti +7 (8482) Vladivostok +7 (423) Yerevan +374 (10) Yuzhno-Sakhalinsk +7 (4242) Ernst & Young (CIS) B.V. All Rights Reserved. This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgment. Neither EYGM Limited nor any other member of the global EY organization can accept any responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication. On any specific matter, reference should be made to the appropriate advisor.