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rate will be changed, from current base rate to 18% we suggest to raise it to 20%,"hesaidascitedby Vedomosti. Themoveindicatesthatthe government is serious in its intentions to raise RUB8 trillion ($129bn) required for the large-scale 6-year state spending effort announced by President Vladimir Putin in his latest May Decree . The change was imposed on the same day that Russia played its first game in the World Cup.
Russia transitions to Common Reporting Standard In May 2016, Russia signed an agreement with the OECD to implement the Common Reporting Standard (CRS) no later than September 2018. The process has begun, with the first round of deadlines coming up at the end of July. CRS is an OECD-developed information standard for the global exchange of tax and financial information that serves to combat tax evasion. Russia’s implementation of CRS is a step in the right direction toward increasing transparency about the vast, and often hidden, wealth in the country, but self-reporting and a lack of investigation will limit its impact. Starting on July 20, banks must introduce new procedures for identifying customers according to CRS. These reporting requirements include the client’s name, bank account number, and data on their account status. Clients’ investment income—from equity trading, interest on deposits, bonds, Pension Fund returns, etc.—must also be disclosed. Financial institutions will have until the end of July to report information to the Federal Tax Service (FTS) on individuals with accounts over $1mn and companies with accounts over $250,000. In this time period, they will also have to submit data on the accounts of non-residents. Reporting on other clients is not due until December 31, 2019. Failure to provide information to the FTS will result in a fine up to 500,000 rubles ($7,840), although penalties will not kick in until 2020. Ultimately, while banks may have to abandon some clients with incomprehensible asset structures, the reporting standard relies on information provided by the customers themselves. Banks are not required to conduct in-depth investigations to verify the information. Furthermore, Russia’s wealthiest can easily evade these disclosures by transferring assets to a country that doesn’t have an agreement with the OECD.
Four Russian regions will test a new income tax scheme for self-employed and individual entrepreneurs of 3-6%, Vedomosti daily said on June 26 citing the announcement of the head of the Federal Tax Service (FTS) at the meeting with President Vladimir Putin. Moscow, the Moscow Region, Tatarstan republic, and the Kaluga region – all amongst Russia’s most progressive and successful regions -- will test the pilot tax geared at bringing SME and entrepreneurial activity out of the "shadow economy". Entities with annual income of less then RUB10bn in certain industries (excluding retail trade) can apply. The new simplified scheme will replace all other taxes such as social security payments and personal income tax. The initiative is in line with Kremlin's drive to curb corruption and boost efficiency in order to clear the field for massive RUB8 trillion six-year spending leap. Previous reports claimed that the Finance Ministry prepares to digitalise and simplify tax reporting, and that the FTS succeeded in radically curbing number of shell companies and improving VAT collection through a new automated system.
Russian government is developing a "one-stop shop" tax reporting principle , under which the businesses would only have to submit their annual reports once to the Federal Tax Service (FNS), RBC business portal said on June 18 citing a bill drafted by the Finance Ministry. The initiative would be in line for the drive for more efficient use and consolidation of domestic
RUSSIA Country Report July 2018 www.intellinews.com