A new set of amendments is aimed at improving certain provisions within the law which, that limit the scope of potential declarants and hinder practical application of the Law
On 5 April 2016, the Russian President signed into law amendments to the Federal Law of 8 June 2015 “On Voluntary Disclosure by Individuals of Assets and Bank Accounts (Deposits) and on introducing amendments to certain legislative acts of the Russian Federation” (hereinafter – “the Law”).
As we announced earlier, the Law, that came into force on 8 June 2015, provides individuals (declarants) with a window of opportunity to inform the Russian tax authorities of their assets (property, controlled foreign companies (CFC), bank accounts) free from the threat of prosecution under the criminal, administrative and tax legislation of Russia. Declarants shall be exempt from liability for tax offences as well as from liability for a number of administrative infractions and criminal offences if such actions (offences) are connected with the acquisition (or preparations for acquisition), usage or disposal of property and (or) CFCs reflected in the declaration, and (or) crediting funds to accounts (deposits) which have been reflected in the declaration. The guarantees are provided with respect to actions having taken place before 1 January 2015.
The Law has already been amended once. The respective amendment extended the deadline for submission of the declaration (from 31 December 2015 to 30 June 2016).
A new set of amendments is aimed at improving certain provisions within the law which, that limit the scope of potential declarants and hinder practical application of the Law.
Notwithstanding the fact that the abovementioned amendments eliminate some uncertainties which used to give cause for concern among potential declarants with respect to the scope of the granted guarantees (e.g. when an individual only managed the property of foreign companies in previous periods), in order to ensure the effective application of the Law, it still needs to be modified. In particular:
Despite there still being some issues regarding application of the Law, the amendments introduced provide for a more favourable legal regime for potential declarants and may reduce the possible liability risks that offences may have been committed for a bigger number of individuals. We recommend that detailed analysis of each individual situation of each potential declarant be performed in order to assess thoroughly the scope of the applicable guarantees.
Should you have any questions, please do not hesitate to contact us.
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