On the 18th of March the Russian Ministry of Finance published a
draft law on anti-offshore measures. The Draft introduces three
Controlled foreign companies rules (CFC);
Russian tax residence for foreign companies based on tests of
management and control; and
New rules on taxation of the indirect disposal of Russian real
On the 27th of May the Russian Ministry of Finance submitted the
updated version of the Draft to the Russian Government. The updated
draft responds to the public discussion which took place among
experts and business organizations. We will issue our comments on
the updated Draft shortly.
Another remarkable draft law was submitted to the Russian State
Parliament at the end of April. The aim of the draft is to provide
Russian financial organisations with the right to disclose
information on their clients to foreign tax authorities. More
importantly, the draft also implements an obligation for foreign
financial organisations located outside of Russia to disclose
accounts opened by Russian national individuals and Russian legal
entities to the Russian authorities annually, as well as any legal
entities where Russian national individuals are beneficiaries.
Although the wording of the draft in relation to potential
liabilities for non-compliance is vague and there is a potential
conflict of laws, implementation of this draft may have a
significant effect on the market.
Moreover, the Russian Federal Government has agreed the National
plan to fight tax fraud on disclosure of beneficiaries. The plan
sets out a wide range of measures aimed at transparency of
beneficiaries of legal structures and taxation of off-shore income
in Russia. Respectively, we expect that another set of
anti-offshore laws will be introduced.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The Cyprus Tax Department recently issued Forms T.D 38, T.D 38Qa and T.D 38Qb applicable to individuals being Cyprus tax residents but non-Cyprus domiciled.
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