Amendments in the rules of tax connected information exchange between Russia and other countries

LEGAL DIGEST, NEWS \ 16.12.2017

The applicable laws of the Russian Federation have profoundly been amended lately, the amendments covering the tax connected information exchange with other countries:

• The Russian Tax Code ensures now an automatic exchange of tax connected information with other countries. This novation aims to step up the fight against the cross border tax evasion schemes. Beginning from 2018, every organization involved in the financial markets of the Treaty countries (for example, a credit institution, an underwriter in the area of voluntary life assurance, a professional player of the securities market   and others) is obligated to provide the Russian Federal Tax Service with financial information about the clients, beneficiaries and  persons directly or indirectly controlling thereof. The said information is provided only in the electronic format. In the other Treaty countries, the information is submitted in a similar format.

• Russian Federal Tax Service has approved a list of countries that don’t disclose information about their taxpayers for the Russian tax agency and don’t acquire the relevant information from Russia.

In total, this list involves 107 states and 18 territories.

In particular, the Russian agency lacks the exchange of tax connected information with colleagues from such countries as: Angola; Andorra; Afghanistan; Bahamas; Bolivia; Bosnia and Herzegovina; Dominican Republic; United Arab Emirates; Tunisia and others.

It is also unlikely to obtain financial information about Russian citizens being residents of the following offshore jurisdictions: the Virgin Islands; Gibraltar; Guam; Macau; separate administrative units of the United Kingdom of Great Britain and Northern Ireland: the Isle of Man and the Channel Islands (Guernsey, Jersey, Sark, Alderney) and others

The amendments came into effect on November 21, 2017.

Beginning from 2018, Hong Kong is to be removed from the list of offshore zones of the Russian Federation.

The delisting of Hong Kong from is connected with the signing of an intergovernmental agreement with Russia on avoiding double taxation and on preventing tax evasion.

The Acsour Lawyers are ready to advise you on the issue of automatic exchange of tax information between countries