#3. Round 1: CRS vs FATCA

Following the Amnesty reporting 2015 rules (voluntary declaration by physical person’s assets & bank accounts) and subsequent extension until 30 June 2016 many residents will be thinking about declaring such assets. The amnesty exempts an individual from criminal, administration and tax sanctions on assets declared.

Under constant development of economics and modern business relations it became urgent to introduce new legal constructions into Russian legislature (which includes the constructions of option contract). Worldwide practice shows that this type of contracts has been constantly used both in business and private life.

Since January 1, 2017, new rules for VAT taxation of foreign entities that provide services to individuals in electronic form or through the Internet (hereinafter, the e-services) come into effect. According to the amendments to the Tax Code of the Russian Federation , if a buyer of such services is in Russia, a place of their implementation will be Russia.

For a long time, closed-end mutual real estate investment funds have been an effective legal tool of tax planning, which taxpayers used to defer profit tax or to avoid profit tax completely on quite legitimate grounds. Thus, today there is a quite common practice, when real estate located in the Russian Federation is transferred to the assets in trust of the closed-end mutual investment fund, and nonresident companies.

The US Foreign Account Tax Compliance Act (FATCA) is no longer news. The Act was issued in 2010, and after that it survived several revisions and came into legal force on July 01, 2014. The Act was amended even after it had become legally effective.

On November 4, 2014, Russia has ratified the OECD Multilateral Convention on Mutual Administrative Assistance in Tax Matters. The Convention, which entered into force in the territory of the Russian Federation on July 1, 2015, provides a legal basis for all kinds of tax information exchange among its members.