Deadline for providing information on controlled foreign companies moved to June 15 - Siluanov
MOSCOW. March 25 (Interfax) - The deadline to present information on controlled foreign companies is being moved from April 1 to June 15, Finance Minister Anton Siluanov said during a meeting with Russian President Vladimir Putin and members of parliament.
"We have prepared legislative amendments on controlled foreign companies. We suggest synchronizing the deadline for providing information on such companies and extending it from April 1, which is what is set in current legislation, to June 15," Siluanov said.
A Russian business that owns companies abroad will be able to synchronize and correlate its management decisions with the provisions of the amnesty law, which is expected to be approved in the next two months.
In addition, provisions have been drafted jointly with the Russian Union of Industrialists and Entrepreneurs (RSPP) on refining the CFC law. The issue concerns taxation of so-called active holdings, Siluanov said. "That is, those holdings that receive revenue from the companies they control that are engaged in active operations," he said.
Today the unallocated profit of such holdings is subject to taxation under existing law. "We propose providing a preference to those holdings that control companies that invest in active forms of business," Siluanov said.
Improvement to the law as it pertains to taxation of irrevocable trusts is also covered. In other words, Russia is introducing the concept of irrevocable trusts. "This concerns exemption from the tax on unallocated profit of the trust founders, which do not have rights to dispose of the property controlled by the trust," he said.
This was one of the proposals voiced by business, Siluanov said. It provides for taking into account amendments to the CFC law. In addition, a host of other proposals have been drawn up and the Finance Ministry plans to submit them to the Duma for approval over the course of two months.
Putin asked: "That is, we are moving back the deadline for submitting information on controlled organizations from April 1 to June 15. Before June 1 we will approve the amnesty law and participants in economic activity, having viewed the amnesty law signed by the president, can make a decision on providing information about the companies they control abroad?"
To which Siluanov applied in the affirmative.
Putin supported the idea, stressing that in order to support Russian companies operating abroad, the state authorities must avoid making decisions that complicate their lives and not pile additional taxes on active production operations.
"We are creating other organizations that were not previously provided for in Russia law, these are trusts?" Putin said, noting that this included irrevocable trusts, when an individual transfers property to a management company and from that moment ceases to be the owner of the property.
"But this management company carries out its activity under a charter that was drawn up when it was formed. That means, this is in fact an innovation in our law, which we did not previously have," Putin said.
Siluanov said the innovation would be included as an amendment to the CFC law.
In conclusion, Putin said that all of the above-mentioned legal changes would help create the favorable climate for economic activity under Russia's jurisdiction that has been spoken of many times in the past.