#3. Round 1: CRS vs FATCA

Dear readers,

The autumn has come, the last leaves are falling off, and the weather does not always bring joy… The warmth, a cup of hot tea and interesting reading become more and more attractive for us.

Just like the leaf fall every autumn strikes by the variety of colors, the next issue of “Korpus Prava.Analytics” presents its readers a palette of relevant legal information.

This autumn issue is dedicated to CRS and FATCA. Due to the multilateral agreement of the competent authorities on the automatic exchange of financial information, starting from December 31, 2018, the automatic exchange of tax information will be based on the Standard for Automatic Exchange of Information on Financial Accounts (Common Reporting Standard (CRS)) developed by the OECD. This standard specifies content and technical details of the information exchange process. In the pages of our magazine, you will learn about some significant changes that are to be developed and introduced in the legislation of the Russian Federation this year.

Irina Otrokhova, our lawyer, tried to give the reader a basic understanding of the principles of tax information exchange within FATCA, as well as to familiarize with the existing models of intergovernmental agreements and mechanisms of tax information transfer. Is there any chance to hide information about oneself?

We continue to acquaint you with the innovations in the Russian legislation. Yana Karausheva, our junior lawyer, will tell how the Russian VAT keeps up with the time, what new rules of VAT taxation are to emerge in 2017 and what consequences they have for foreign organizations.

Why there is a need to introduce new legal constructions of contracts in the Russian Federation legislation, including the constructions of an option contract? How life insurance abroad can help you in Russia? Why Hong Kong is a new haven for Russian mutual funds? We are pleased to provide you answers to these difficult questions.

Enjoy your reading and see you in the pages of “Korpus Prava.Analytics”!

Artem Paleev
Managing Partner
Korpus Prava

Michael Barry

Consultant Wealth Manager

DeVere Group

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.

Ekaterina Pazemova

Master of International Private Law

Legal and Tax Advisor

Saint-Gobain Group

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.

Yana Karausheva

Ex-Junior Lawyer

Tax and Legal Practice

Korpus Prava (Russia)

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.

Alexey Oskin

Deputy Director

Tax and Legal Practice

Korpus Prava (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.

Irina Otrokhova

Chief Compliance Officer

Corporate Services

Korpus Prava (Cyprus)

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.

Anna Senchenko, LL. M.

Leading Lawyer

Tax and Legal Practice

Korpus Prava (Russia)

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.