Accounts Chamber of the Russian Federation proposes to introduce "offshore" tax

Accounts Chamber of the Russian Federation proposes to introduce "offshore" tax

Accounts Chamber of the Russian Federation proposes to introduce "offshore" tax on foreign trade operations between Russian producers and companies registered in low-tax jurisdictions.

The Chamber sees the introduction of "offshore" tax as "significantly easier and more effective way" than an alternative measure to combat tax evasion whereby a company is obliged to pay profit tax of offshore structures under its control. The measure prevents withdrawal of the parent company’s profit into the low-tax jurisdictions.

The introduction of such tax will require significant changes in the Russian tax legislation. It will be  necessary to define the criteria that will consider offshore companies controlled by the Russian companies, to determine the range of firms covered by the measure, types of transactions that are subject to taxation, etc.

According to auditors, the implementation of measures for the introduction of the "offshore" tax will help bring the federal budget to $ 48 billion a year.

According to experts, there are several advantages of the proposed tax, among them - "sufficiently simple administration and no need to create complex structures and investing." "On the one hand, the introduction of such tax will reduce the practice of direct transfers of funds, and on the other - it will create a multi-stage scheme for transfers," Ivan Soloviev, Doctor of legal sciences, Professor, Honored Lawyer of the Russian Federation, says.

In summary, despite the obvious advantages of the proposed tax, introduction of such tax remains to be seen.

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