1) Russian tax residents must report foreign bank accounts and transactions to Russian authorities, including when opening or closing accounts and making transactions. 2) Income like dividends and interest from foreign entities are only taxed in Russia if actually paid to the Russian tax resident. 3) Use of capitalization funds and life insurance products can generate tax liability for Russian residents depending on whether income is received and where the funds and entities are located. Various taxes apply to dividends, interests, and other payments.

1. Regularization of Private
Clients’
Undeclared/Untaxed Funds

2. Undeclared Funds vs. Undistributed
Revenues

3. Current Reporting Obligations on Foreign Accounts
Residency status (for reporting purposes):
Is defined by the RF Currency Legislation;
Generally includes Russian citizens, except those who are away for no less
than 1 year (uninterrupted stay outsider of Russia without crossing the border)
General Rule: RF residents shall report to Russian tax authorities:
on opening
(closing) bank
accounts/deposi
ts abroad;
on changing bank
accounts/deposits
details;
on all
transactions of
foreign bank
accounts (or
deposits);
During 1 month period
During 1 month period

4. Current Rule: Dividends and Interest are Taxed
Only if Actually Paid
Foreign Legal
Entity
Foreign Jurisdictions:
Cyprus, Malta, BVI
Switzerland, etc.
Russian Federation
Withholding tax/ if
any
Personal income tax:
9% for dividends
13% for interests
Dividends/Interests

5. Use of Capitalization Funds. Common Rules.
• RF tax resident owns units/securities
distributed by the fund and;
• RF tax resident actually receives any
income upon sale/disposal of units
RF tax resident is
liable for RF tax only
WHEN
• Fund’s units are owned by foreign entities;
• Russian sourced income from the
sale/disposal of units
Foreign Companies
could be potentially
liable for RF tax
WHEN
Tax rates for income received from transactions with securities in the RF:
•13% for the RF residents
• 30% for non-residents

6. Use of Capitalization Funds. Specifics of Securities and
Financial Instruments Taxation.
Actual expenses for
acquisition of
securities/financial
instruments
Market value of the
securities/financial
instruments
Material
gain
Personal
income tax:
•13% for the
RF residents
• 30% for non-
residents
Material
gain
Paid
Personal
income tax
Expenses reducing
personal income
from sale
In case of further sale of
securities
•Tax base for securities transactions is the financial result: income from
sale of securities after deduction expenses for their purchase.
•Tax rate: 13% for the RF residents, 30% for non-residents;
I.
II.
III.

7. Use of Life Insurance Products: Taxation only Upon
Distributions
Russian national
Foreign
Insurance
Company
Funds transfer as payment for
insuring life/property/etc.
Proceeds from insurance policy
upon certain events (death,
disability, elderly age, etc.)
Income generated during the term
of such insurance policy

8. Use of Life Insurance Products.
General Rules:
Income generated during the term of insurance policy is taxable at a rate of 13% as
income received from foreign sources;
Insurance payments are taxable at a rate of 13% (para 2 and 3 of art. 208 of the RF Tax
Code);
Tax exemption is applied to the following payments (para 2 and 3 of art. 213.1 of
the RF Tax Code)
Insurance payments upon a certain
age/period of the insured person or in
other events if:
(i) the insurance payments are
paid by the taxpayer
(ii) insurance payments do not
exceed the sum of his paid
premiums;
The difference between these
amounts will be included in tax base.
Insurance payments upon events:
-Death
-Injury to health; and (or)
-Reimbursement of medical
expenses of the insured person
(exception – payments for
sanatorium treatment);

9. Dividends: Russian Tax upon payment from Cyprus
CYCyprus
Russia
Dividends
No Withholding Tax
9% Personal income tax less
WHT paid in Cyprus

10. Interest: Russian Tax upon Payment from Cyprus
CY
Cyprus
Russia Interests
No Withholding tax
13% Personal income tax

11. Currency Control
Foreign
Jurisdiction
Russia
Dividends
Foreign Legal
Entity
Currency
Transaction
Currency Control:
All transactions shall
be made via
Authorized banks
Otherwise
Fine in the amount up to the sum
of illegal currency transaction

12. Limitation Period for Tax Offences
An individual can not be brought to responsibility (fines) for tax offences if 3
years expired before such decision left was made, beginning from:
 the next day after the end of the tax period during which the offence was
committed (effective for offences under Art. 120, 122 of the RF Tax Code);
 the date of its commission (for all other offenses);
 Within the framework of the field tax audit the reviewed period can not
exceed 3 years from the date, when decision on the appointment of such audit
was made (5 years for taxpayers participating in regional investment
projects);
Tax liability ceases in the following cases:
 Payment of taxes;
 Death of an individual taxpayer;
 Liquidation of the taxpayer (legal entity);
 Other cases provided by the law;

13. Relief of Tax Liability
The corrected tax return is
submitted:
 after deadline for such
submission expired, but
 before expiry of deadline
for tax payment
Relief of tax liability
Provided that the taxpayer did not know
about:
 discovery of tax underpayment by the tax
authorities
 the appointment of the field tax audit
The amended tax return is
submitted:
 after deadlines for
submission of tax return
and for tax payment expired
1. Provided that the taxpayer paid the
underpaid taxes before he became aware of:
 discovery of tax underpayment by the tax
authorities
 the appointment of the tax field audit
2. Provided that the tax payer paid the
underpaid taxes and such underpayment was
not identified in course of the field tax audit
Relief of tax liability
Relief of tax liability does not exclude implication of criminal liability.

14. Thank You For Attention!