Overview of tax events for February 2018

REGULATORY DEVELOPMENTS

The second wave of the amnesty of capital[P.1] [P.2] in Russia will last from 1 March this year until the end of February 2019. The Russian President has signed the relevant laws No. 33-FZ, No. 34-FZ and No. 35-FZ.

Russia has approved a Draft Protocol to amend the Convention between the Russian Federation and the Kingdom of Belgium on the avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income and property.

The Convention was signed on 19 May 2015 in Brussels.

Guidance on identifying fly-by-night companies (with a list of sectors of the economy and transactions which should be treated with more care) has been proposed to banks by the Russian Central Bank in its recommendations on how to manage risks of money laundering[P.3] . The document has been agreed with the Russian Federal Tax Service.

PRACTICE

As of 1 January 2018 Russia has double taxation treaties with 83 countries. The Russian Ministry of Finance has drawn up a list of these countries. A new development, which came into force on 1 January, is the application of the double taxation treaty with Brazil (signed on 22 November 2004).

From 15 February until 15 March the Russian Federal Tax Service has launched a Report about Foreign Clients service in a test mode. Using this service the Russian financial sector will provide information about its clients who are foreign residents.

A special section The provision of financial information about foreign clients has been created on the official website of the Russian Federal Tax Service. This section contains up-to-date information about the participation of Russia in the international automated exchange of tax information under the OECD standard.

The Russian Federal Tax Service has summarised the outcomes of the VAT Return Campaign by foreign internet companies for the year 2017: foreign sellers of electronic content paid RUB 9.34 billion to the Russian state budget during the year. The principal amount is formed by digital platforms through which users purchase content and other electronic products.

145 foreign companies were registered with the Russian tax authorities.

Swiss company Global Blue and entrepreneur Ruben Vardanyan will establish a joint venture to implement a tax free system in premium shopping malls in Russia.

On the final panel the Chairman of the Russian Investigative Committee, Alexander Bastrykin, demanded that his subordinates promptly identify and investigate the most complicated schemes of tax evasion when combating tax crimes in joint work with the Russian Federal Tax Service and financial intelligence.

Mikhail Mishustin, the Head of the Russian Federal Tax Service, has proposed collaboration to the Head of the Russian Investigative Committee in two areas: against those who benefit from shadow tax schemes and against persons who create fly-by-night companies. He also pointed out the reduc[P.4] tion of the proportion of refusals to initiate criminal proceedings based on the materials provided by the tax authorities.