A second conference on "Tax planning: working in conditions of deoffshorization", May 31, 2019

Start/End Date
2019-06-04 / 2019-06-04

The head of The Russia-OECD center Ranepa Antonina Levashenko acted as a speaker at the Second conference "Tax planning: working in the conditions of deoffshorization" organized by CFO-Russia.ru and Prosperity Media.

Antonina spoke about the key instrument of deoffshorization today – the automatic exchange of tax information on foreign accounts of non-residents between countries. Russia is a member of this system. But despite the fact that the Common CRS reporting standard is agreed by countries and adopted at the OECD level, its implementation is different. This leaves opportunities for unscrupulous financial institutions and clients to evade reporting. Some financial institutions, such as crypto-exchanges, are not required to report on their clients ' accounts. A number of countries offer to become their tax residents through the acquisition of real estate or significant investment in such a country. There are about 25 such schemes, practiced by 17 countries of the world. This distorts fair taxation and creates risks of non-reporting on an income of its residents by countries where such persons are actually tax residents.

At the conference, Antonina also discussed the approaches to improving the definition of tax residency of individuals in Russia through the use of additional criteria in addition to 183 days (which is currently used). For example, as such criteria can be called: the total number of days of stay for the last few years in the country, the center of vital interests, etc. This will identify persons who are actually tax residents of the Russian Federation but artificially lose this status every year, because of their limited stay in Russia - less than 183 days. It should be noted that the complication of the procedure for determining the tax residence of individuals, that is, the application of additional criteria, is the trend of most countries over the past 10 years.

In addition, it is necessary to take a number of measures aimed at combating the evasion of exchange through international cooperation: the definition of risk schemes, harmonization of approaches to the definition of responsibility. The measures mentioned by Antonina are based on the results of the research conducted in the framework of the scientific activities of the Academy in 2018.

In the second part of her speech, Antonina presented the changes in the tax legislation of the friendly countries in terms of opening business and Bank accounts - the Baltic States and Cyprus. The changes are related to the deoffshorization policy. Countries are actively implementing the standards of the OECD BEPS Plan and tightening the requirements for the work of banks, including establishing a ban on the maintenance of accounts of shell companies. At the same time, after a number of major scandals related to serious violations of anti-money laundering legislation in the banks of Latvia and Estonia, it will be more difficult for Russians to open accounts in these countries. In Cyprus, the scheme of acquisition of residence through investment remains in effect, which is recognized by the OECD as risky, since it does not involve a prolonged presence in Cyprus (60 days).

Translation by: Boryana Kiskinova