MOSCOW, July 1 The Russian Ministry of Finance more than doubled the list of offshore zones — up to 91 countries, the corresponding order comes into force on July 1.
According to the order of the Ministry, which was published in 2007, only 42 countries were previously included in this list. The new version of the document includes the countries of the European Union, as well as Ukraine, Great Britain, Switzerland, the USA, Canada, Japan, South Korea, Singapore, Taiwan, Australia, New Zealand and Norway.
Also included in the list were the British Antarctic Territory; British Indian Ocean Territory; Pitcairn; Albania; Iceland; North Macedonia; Saint Helena, Ascension and Tristan da Cunha; Sovereign Base Areas of Akrotiri and Dhekelia; Federated States of Micronesia; Falkland Islands (Malvinas); Montenegro, as well as South Georgia and the South Sandwich Islands.
As Linda Kurkulyte, a lawyer at BGP Litigation's international tax planning practice, noted in a comment, such an expansion of the list will primarily affect business. «The expansion of the list will primarily affect the tax burden of businesses that include foreign companies in the group of companies, especially holding and sub-holding companies,» she believes.
«»Tax residents of the Russian Federation will not be able to release the profits of a CFC (controlled foreign companies. — ed.), registered in the jurisdiction from the list, according to the criterion of an active holding company or an active sub-holding company,» she notes. «Russian organizations will not be able to apply the 0% rate on CIT (income tax — ed.) when receiving dividends from subsidiaries whose 50% shares/shares have been owned by it for at least 1 year, if such a subsidiary is registered in the jurisdiction from the list,» adds the expert.
«Russian organizations will not be able to apply the 0% EIT rate to property or property rights received from a foreign company that owns 50% of the shares/shares of such a Russian company if the foreign company is registered in the jurisdiction from the list,» she notes . In this context, companies should think, in her opinion, about redomiciliation to the SAR or to other foreign jurisdictions not included in the «black list».
In February, the Council of the European Union included the Russian Federation in the «black list» of non-cooperative tax jurisdictions. In March, the Ministry of Finance and the Ministry of Foreign Affairs of the Russian Federation took the initiative to the President of the Russian Federation to suspend double taxation agreements with all countries that have imposed sanctions against Russia.