Subramanian Swamy What I had urged Namo to do viz., issue an ordinance nationalising black money accounts abroad, Putin has in modified form has today done
NaMo, see what Putin has done.
Putin signs anti-offshore law to return Russian capital from foreign tax shelters
November 25, 11:37 UTC+3
The law introduces amendments to the country’s tax code that will oblige Russian owners of companies registered in offshore tax havens to pay taxes in Russia
The law introduces amendments to the country’s tax code that will oblige Russian owners of companies registered in offshore tax havens to pay taxes in Russia
The law introduces amendments to the country’s tax code that will oblige Russian owners of companies registered in offshore tax havens to pay taxes in Russia.
The law stipulates a mechanism for taxation of undistributed profits of controlled foreign entities.
The document obliges Russian tax residents to declare undistributed profits of controlled foreign companies. Minimum profits subject to declaration will equal 50 million rubles (about $1 million) in 2015, 30 million rubles ($660,000) in 2016 and 10 million rubles ($220,000) after 2017.
Under the document, a Russian company or individual with ownership of more than 50% of a foreign organization in 2015 and with 25% such ownership from 2016 are categorized as “controlling entities.” The individual threshold will fall to 10%, if Russian residents’ total shareholding is more than 50% of a controlled foreign company.
The law also stipulates penalties for failure by controlling persons to declare and pay taxes into the Russian budget. The penalty for such violations will amount to 20% of the unpaid tax but no less than 100,000 rubles ($2,220).
Failure by controlling persons to submit information or failure to submit authentic information will entail a penalty of 100,000 rubles for each controlled company, on which data are not provided.
At the same time, the existing Russian legislation stipulates criminal responsibility for tax evasion.
Deputy Chairman of the Federation Council Committee for Economic Policy Sergei Shatirov has said “Russia holds a leading place in the world among developed states by the scope of the use of offshore schemes.”
“A large part of the Russian economy is linked to offshore tax shelters in one way or another. The use of offshore havens by Russian business causes large damage to the country’s interests,” the senator said, adding that anonymous ownership and control of offshore structures were used for criminal activity, including for tax evasion and corruption.
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Meanwhile, capital outflow through offshore schemes is estimated at $200 billion this year alone, he said.
Overall, about $2 trillion has fled Russia in recent years through offshore schemes, according to expert estimates.
“De-offshorization is an important issue in ensuring national security,” the senator said.
Meanwhile, Deputy Finance Minister Sergey Shatalov said taxation of controlled foreign entities will yield up to $425 million a year.
