Analytics and brochures

On 12 November 2018, Federal Law No. 420-FZ “On amending article 322.3 of the Criminal Code of the Russian Federation (the “Law”) was adopted. The amendments extend the definition of a sham registration of foreign nationals or stateless persons at the place of their stay in Russia not only to residential premises, but also to companies’ offices.

Legal firm Pepeliaev Group advises that the Central Bank of Cyprus has issued an additional circular letter regarding shell companies, containing more favourable explanations as to when a company is classified as a shell company.

The Commercial Court, in the case of the Organising Committee of the 2014 Olympic and Paralympic Winter Games in Sochi, has recognised as lawful the application of the civil law mechanism for recovering from a foreign person an amount of unjust enrichment in the form of tax that a tax agent has paid on behalf of the foreign person, together with interest for using the other party’s money.

Despite the literal wording of article 381(25) of the Russian Tax Code, movable property that was acquired from a related party can be exempted from taxation in certain cases, according to the Russian Supreme Court.

According to the Russian Supreme Court payments under cross-border agreements for services (work) are treated as passive income if no operations have actually been performed.  

Pepeliaev Group advises that Federal Law “On international companies” (the “Law”) came into full force on 3 August 2018. The Law establishes a regime for foreign companies allowing them to change their personal law and obtain the status of international companies.