Overview of Tax Events for August 2018

REGULATORY DEVELOPMENTS

In early August, the Russian President signed the following laws:

• a Federal Law ratifying the Convention between the Government of the Russian Federation and the Government of Japan on the elimination of double taxation with respect to income taxes and the prevention of fiscal evasion;
• a Federal Law ratifying the Protocol amending the Convention between the Russian Federation and the Kingdom of Belgium for the Avoidance of Double Taxation;
• a Federal Law raising VAT up to 20%, and providing for new rates of social insurance contributions;
• a Federal Law that approved a tax manoeuvre in the oil industry;
• a Federal Law providing for an alternative to foreign offshore zones on the islands of Oktyabrsky in Kaliningrad Region and Russky in Primorye Territory;
• a Federal Law providing for the abolition of tax on companies’ moveable property;
• a Federal Law allowing tax authorities to request that auditors provide information regarding taxpayers;
• a Federal Law establishing specific features of the taxation of international holding companies.
• Recommendations of the participants of the Parliamentary hearings concerning the draft Main Trends in the Budget, Tax and Customs and Tariffs Policies have been published on the website of the State Duma Committee for the budget and taxes. In particular, the proposal to prepare a new version of the Russian Tax Code has been welcomed.
• The Russian Ministry of Finance has published:
• the first draft law from the bundle of laws regarding the relaxation of currency control;
• amendments to the Russian Tax Code which are intended to introduce an environmental tax starting from 2020.

The Russian Federal Tax Service has published a draft order on how foreign tax authorities can be involved in audits of companies in Russia. The Russian party will be able to participate in tax audits in another country.

A draft new blacklist has been published of countries who reluctantly share tax information with Russia or those who do not share tax information at all.

Russia is preparing to ratify the multilateral Convention dated 24 November 2016 which is designed to ensure the coordinated implementation of the BEPS Plan - a draft Federal Law has been prepared.

PRACTICE

The Russian Federal Tax Service's website has published information which was previously treated as a tax secret:

• the average headcount of legal entities,
• special tax regimes companies apply.
• regarding participation in a consolidated group of taxpayers as at 31 December last year.

The Russian Federal Tax Service has stated that the most common violations of tax legislation by legal entities are connected with VAT and corporate profit tax.

https://russian.rt.com/russia/news/541982-nalogi-narusheniya-fns 3 August 2018

Starting from September, the Russian Federal Customs Service has obtained the right to challenge in court the transactions of companies that have committed gross violations of legislation.