The Ministry of Finance of the Russian Federation last year brought 6,000 companies back from offshore locations. As a result, the budget received 3 billion rubles in additional taxes. Alexei Sazanov, The Director of the Tax and Customs Policy for the Ministry of Finance was quoted as saying this in a recent Izvestia article.
The first declaration period after the the law on de-offshorization came in 2016. At that time, about 6 thousand foreign companies controlled by Russians were identified, the representative of the Ministry of Finance noted.
"In addition, an income tax base was declared for more than 20 billion rubles." The organizations have since paid additional taxes worth about 3 billion rubles," Sazanov said.
According to him, this is a relatively small amount, but, nevertheless, it is "money that was not previously available in the budget."
The Law on Controlled Foreign Companies (CEC), effective January 1, 2015, aims to receive taxes from the profits of foreign organizations controlled by Russian citizens. Previously, any Russian could register a business abroad and not pay taxes in Russia. For this reason, many entrepreneurs registered companies in offshore zones.
The Russian prime minister ordered the Finance Ministry to hold talks with Japan on the possibility of signing a convention that would avoid double taxation. The corresponding document is now published on the website of the Russian Cabinet of Ministers.
Earlier, the Ministry of Foreign Affairs of Japan announced such an agreement between the two countries. The new document will replace the current "Convention on the Avoidance of Double Taxation", signed by the USSR and Japan in 1986.
The text of the decree says that it is necessary to approve the drafts of the convention between the Government of the Russian Federation and the Government of Japan, coordinated with the Ministry of Foreign Affairs, the Ministry of Economic Development, the Ministry of Justice, the Federal Tax Service and preliminary drafted with the Japanese side, on eliminating double taxation with respect to income taxes and preventing avoidance and evasion of payment taxes and protocol to it.
"The Ministry of Finance is to hold negotiations with the Japanese federal authorities with the participation of interested federal executive authorities and, upon reaching an agreement, sign the said convention and protocol on behalf of the government, allowing changes to be made to the attached drafts that are not of a fundamental nature," the document says.
An explanatory note to the document states that it is intended to create additional conditions for attracting investment, as well as to provide an opportunity to exchange information in the field of tax offenses.
Russian President Vladimir Putin signed a law on amendments to the Tax Code, which limits the ability of the tax authorities to add taxes and deny taxpayers deductions due to technicalities.
The Tax Code is to be reformed to provide for the "priority of the content of the transaction over the form." The law is published on the official portal of legal information.
At the moment, the tax authorities may refuse to refund VAT to a taxpayer based on technicalities. For example, it may be denied if the related document contains an incorrect comma.
The law proposes to avoid such issues as much as possible and to fix within the Tax Code an exhaustive list of grounds on which the tax authority has the right to refuse VAT refunds to the taxpayer or to take expenses to reduce corporate income tax payments.
RIA Novosti reports that the adoption of the law will most likely protect the rights of taxpayers both in relation to the tax authorities an in judicial disputes.
The law enters into force one month from the date of its official publication.
Translated by Alinga Consulting Group.
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