New rules, fines and deadlines for Controlled Foreign Companies (CFC) in 2021
An overview of changes affecting CFCs that came into force in 2021 in Russia:
1. Information to be submitted to tax authorities:
It is now mandatory to send the financial statements and audit opinion (if the CFC passed a mandatory or voluntary audit) together with the CFC notification form.
2. New fines:
• Failing to submit the CFC notification, Financial Statements and Audit Opinion - 500,000 rubles for each document
• Failing to submit documents at the request of the tax authorities on confirmation of profit, loss or tax exemption - 1 million rubles for each year.
3. New submission deadlines:
• April 30th for private individuals
• March 20th for legal entities
4. New option of a flat-rate tax based on the fixed profit of the CFC:
The owners of CFCs have the option to pay a fixed tax of 5 million rubles per year, regardless of the number of CFCs. This can be beneficial if total profit of owned CFCs exceeds 34 million rubles.
At the same time, the controlling party will not be obliged to provide the tax authorities with the financial statements of the CFC and the audit opinion.
Read our latest Quarterly newsletter for more information on this topic:
Bellerage can assist you with the preparation and submission of the CFC notification. Contact us at email@example.com