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We are Russia’s largest tax consulting practice, comprising more than 500 Russian and foreign tax professionals
We offer practical tax solutions based on the in-depth knowledge and expertise of our consultants as well as on our proprietary methodologies. The structure of our tax practice encompasses a wide range of critical issues in taxation and law where we have developed specific areas of expertise.
For each client project, we quickly assemble a team of consultants with the necessary tax and legal skills as well as relevant industry expertise. This helps us to understand clearly our clients’ needs and makes us well positioned to assist them in resolving specific challenges, while also providing comprehensive recommendations rooted in our high-level view of the situation.
In September 2013, during the G20 Summit in Saint Petersburg, Russia announced its plans to implement principles included into the OECD Action Plan on Base Erosion and Profit Shifting (BEPS). Currently, Russian regulators are attempting to implement BEPS Actions in the Russian tax law.
Companies having an international element in their structure or performing cross-border transactions are advised to comply with OECD recommendations and actions on BEPS when planning their operations or structuring business, even if certain OECD measures are not included in the domestic law of Russia or other counties, in which the group operates or intends to operate. The fact is that the countries that fail to implement the proposed measures for combating international tax fraud will be further subject to pressure from international institutions and countries they partner with in trade.
The FATCA initiative is becoming a disruptive breakthrough in finance. Russian financial institutes now have a new task of identifying US taxpayers and transferring their data to the IRS. Never before have Russian financial institutes had a challenge of identifying their clients’ tax residence. In addition, the FATCA compliance trend does not strike off an obligation to comply with Russian requirements as well.
PwC Russia has been working on FATCA-related engagements since 2013. We have a proven track record of completing over 50 FATCA projects in Russia involving major Russian top-5 banks. We are proud to provide our clients with optimal solutions that allow us to comply successfully with Russian and US regulations.
Russia undertook to participate in the implementation of the Common Reporting Standards (CRS) ensuring automated information exchange. Therefore, Russian financial institutes will unavoidably have to adjust internal processes for identifying foreign taxpayers and filing respective reports. To implement CRS, Russia must adopt a set of local regulations. Still, the country will need professional expertise in CRS in order to apply the CRS legislation to the fullest extent.
CRS may be attractive not only for banks and financial institutes, but also for individuals using their foreign accounts, investing into foreign financial assets or having personal holding structures. Individuals must understand what information on their holdings and operations will be reported to which countries.
Deoffshorisation is a set of measures to encourage taxpayers to stop using foreign (including offshore) asset ownership structures.
Such measures include the tax-free transfer of assets belonging to foreign companies/entities by Russian tax residents as part of the liquidation and amnesty of these companies/entities by 1 March 2019, as well as the possibility of foreign companies being re-domiciled and returning to Russia (Russian offshores).
Those who are unwilling to stop using foreign arrangements should justify their existence (they will be required to confirm the beneficial ownership of income if the payouts originating from Russia are made at reduced rates under a DTT) and management methods (management from Russia might lead to the classification of a foreign entity as a Russian tax resident). They should also report their profits annually (under the CIC regulations) if a foreign company is controlled by Russian tax residents.
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