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Russian Parliament passes offshore amnesty law

Thursday, 2 April, 2015

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Russia's Parliament (Duma) has approved a government-proposed voluntary procedure allowing taxpayers to regularise previously undeclared offshore assets without risk of prosecution – albeit with 'some exceptions'.

The draft law was announced by Russian Prime Minister Dmitry Medvedev on 26 March. Addressing the Federal Assembly, he reportedly noted that business development in Russia 'has not always been legal and laws have been subject to much change'. However, now that legal stability and predictability have been achieved, he said, people 'should be given a chance to openly declare their funds and use them officially'. By creating a transparent and secure legal mechanism under which 'grey assets' can be re-registered in the name of their de facto owner, they will be brought back into the economy, he said.

'We would like entrepreneurs who decide to declare all of their revenues and assets to work and invest in Russia', said Medvedev. 'Those who decide to disclose the sources of their revenues and property should be guaranteed that they will not face potential prosecution (with some exceptions, of course) or other pressure'.

Owners of 'grey' assets will be invited to submit a special declaration to the tax authorities by 31 December 2015. This will register any assets in their nominal ownership, as well as controlled foreign companies and accounts in relevant banks. Information received under the amnesty will be protected by a new tax privacy law.

Declared assets need not be returned to Russia. However, they must be registered in a jurisdiction that is not blacklisted by the Financial Action Task Force (FATF) and that has a double-taxation agreement with Russia.

Prime Minister Medvedev states his intention to discuss the law with 'international experts' including the FATF.

Sources