#1. CFC: Technical Knockout or Win By Score

So far, in the Russian law tax residency of a legal entity was determined either by the place of its state registration (incorporation), or by availability of permanent establishment of the entity.

In December 2013 in the address to the Federal Assembly the president Vladimir Putin stated that Russia needs a system of measures for “deoffshorization” of the Russian economy. According to him, some estimates evidence that 9 out of 10 transactions, including transactions with state-owned companies, are not subject to the Russian laws.

We will speak about Cyprus, which adopted FATCA, the requirements for filing financial statements of Cypriot companies tightened, the rules of the regulator changed. In addition, we will mention the changes of the legislation of the British Virgin Islands.

Although in the past year the most notable and discussed reforms were the reforms of tax legislation, another noteworthy trend should be noted as well. Lawmakers have begun to actively reform one of the most, perhaps, static branches of the Russian law – the labor legislation.

From 1 January 2015, submitting VAT returns, we’ll begin to upload there purchase ledgers and sales ledgers, the ledger of invoices issued and received for intermediaries. All information will be stored in “Big Data” system of the FTS of Russia.

Starting to speak about the Resolutions of the Plenum of the RF Supreme Arbitration Court, they should be treated with a special respect, as these are the last Resolutions of the RF SAC. That is not the last in time, but the last in general. From 7 August 2014 the RF SAC ceased to exist.

When there are disasters around such as law on controlled foreign companies, it is difficult to get distracted and to pay attention to anything else relating to taxes. However, the Tax Code sheds its editions like leaves and, whether we like it or not, we shall follow this process in order to not be trapped.

The past year brought to the citizens of the Russian Federation, who have the legal right of permanent residence outside the Russian Federation, the obligation to notify the authorities of the federal migration service of the existence of this right.

The civil law in Russia gradually evolves under the general roar of probably historically significant events. This also concerns the intellectual property rights: in March 2014 a package of amendments to part 4 of the RF Civil Code was adopted.

The past year 2014 is best remembered for its succession of important and significant changes that affected the foundations of the Russian civil law. The adopted innovations did not come by the part of the civil law, which regulates corporate relations as well.

The CFC law is not our invention. It’s a trend. And we now move with the time. However, when reading the law one thing is clear: in a first approximation our bill is a usual CFC law. If you look under a magnifying glass, the question: what were the goals of the legislator while adopting the law arises.

In the wake of the financial crisis plaguing the world economy, countries came to the conclusion that new sources of income shall be opened as soon as possible, thus they focused their efforts on taxation, in particular on fighting against use of schemes of tax evasion.