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1. Amendments in the rules of tax connected information exchange between Russia and other countries
The applicable laws of the Russian Federation have profoundly been amended lately, the amendments covering the tax connected information exchange with other countries:
- The Russian Tax Code ensures now an automatic exchange of tax connected information with other countries. This novation aims to step up the fight against the cross border tax evasion schemes. Beginning from 2018, every organization involved in the financial markets of the Treaty countries (for example, a credit institution, an underwriter in the area of voluntary life assurance, a professional player of the securities market and others) is obligated to provide the Russian Federal Tax Service with financial information about the clients, beneficiaries and persons directly or indirectly controlling thereof. The said information is provided only in the electronic format. In the other Treaty countries, the information is submitted in a similar format.
- Russian Federal Tax Service has approved a list of countries that don’t disclose information about their taxpayers for the Russian tax agency and don’t acquire the relevant information from Russia. In total, this list involves 107 states and 18 territories. In particular, the Russian agency lacks the exchange of tax connected information with colleagues from such countries as: Angola; Andorra; Afghanistan; Bahamas; Bolivia; Bosnia and Herzegovina; Dominican Republic; United Arab Emirates; Tunisia and others. It is also unlikely to obtain financial information about Russian citizens being residents of the following offshore jurisdictions: the Virgin Islands; Gibraltar; Guam; Macau; separate administrative units of the United Kingdom of Great Britain and Northern Ireland: the Isle of Man and the Channel Islands (Guernsey, Jersey, Sark, Alderney) and others. The amendments came into effect on November 21, 2017.
- Beginning from 2018, Hong Kong is to be removed from the list of offshore zones of the Russian Federation. The delisting of Hong Kong from is connected with the signing of an intergovernmental agreement with Russia on avoiding double taxation and on preventing tax evasion.
The Acsour lawyers are ready to advise you on the issue of automatic exchange of tax information between countries.
2. The ’’Non-Competition Agreement’’ violates the rights of employees
The Ministry for Labor of Russia expressed its opinion on the eligibility of signing the "Agreement on Non-Competition"
The essence of this agreement is that the employee undertakes an obligation within a certain time period following the resignation not to be employed in organizations that are competitors to his/her former employer. As it has been pointed out by the Agency’s experts, the applicable Federal Laws do not provide for the possibility of signing such an agreement. According to the Constitution of the Russian Federation, labor is free, and the Labor Code enforces a ban on employment contracts that include provision limiting the rights of workers. Thus, even if a non-competition provision is included in the employment contract, it is not to be enforced as contradicting the Labor Law and restricting the rights of the employee.
The Acsour Lawyers are ready to provide you with information on the enforcement of the norms of the labor legislation of the Russian Federation in practice.
3. The list of reasons for banks to refuse performing currency transactions has been increased
The currency transaction cannot be performed if the provisions of the Law on Currency Control, concerning the following:
- Currency transactions between residents of the Russian Federation;
- Resident accounts with banks outside the Russian Federation;
- Rights and obligations of residents in currency transactions;
- Other acts of currency legislation.
An additional ground for the refusal can now also be the incompliance of documents with the requirements of the Law. The taxpayer is to be notified of this violation by the bank in writing not later than the working day following the day of making the decision.
Now banks refuse to conduct a transaction only if:
- The purpose of the transaction, according to the bank, is the legalization of criminal proceeds or the financing of terrorism;
- The client did not submit the required documents or they are inconsistent.
The amendments are to come into effect on May 14, 2018.
The Acsour experts will answer your questions regarding the order of currency transactions.
4. The property tax relief was not extended at the federal level
Whether or not to pay the tax on movable estates (property), registered on January 1, 2013 as fixed assets, from 2018 will be decided by the regions.
At the federal level, the tax on movable property tax taken into account since January 1, 2013, has been canceled since 2018. From now on, a decision on extending the relief benefit is to be taken at the regional level. In the event if the region does not retain the relief benefit, the rate for the tax on movable property during 2018 will not exceed 1.1%
In addition, the legislators envisaged the possibility of introducing additional regional relief benefits for the said property, from the date of issue thereof no longer than 3 years have passed, as well as on the property classified as innovative high-performance equipment (the region will be able to identify the property as innovative high-performance equipment independently).
In the Moscow region, for 2018 - 2020 a zero tax rate have already been set.
In Moscow, St. Petersburg and the Leningrad Region, the draft on tax reliefs for movable property is under consideration.
The Acsour can provide advice on the application of reliefs for movable property.
5. The Rostrud Agency approved 107 check-lists for planned inspections of employers
The Rostrud Agency has published checklists of questions for employers, which will be checked by the Labor Inspection.
Most checklists concern the fulfillment of occupational safety and health requirements at various jobs. For example, they help assess whether the following actions are performed correctly:
- Employment registration is issued;
- Changes are made in labor contracts;
- Leaves are granted;
- The salary is established and paid;
- Employment relations are terminated.
The amendments are to come into effect from January, 1, 2018.
The Acsour experts recommend that the observance of norms of the labor Laws in your organization be observed on the web portal and will also help you get prepared for an inspection procedure to be performed by the State Labor Inspection.
6. Amendments in the migration registration for the period of the World Football Cup-2018
Due to the World Football Cup (WC hereinafter), in the year 2018 Russia is to tighten the migration registration procedures for the period of holding the event.
Foreign citizens who arrive in the Russian regions, where the WC matches are to be held, in the period of May, 25, till July, 25, 2018, shall be registered at the place of their stay or registered at the place of residence during one day from the day of their arrival at the place of sojourn or residence.
Any violation of the migration regulating laws perpetrated by legal entities as employers considerable penalties have been specified (in Moscow and Saint Petersburg they amount to 1 million Rubles or 14 300 Euros), and foreign citizens are liable, in addition to the penalty, to deportation outside of the Russian Federation, which is followed with a ban on entry into the country during several years.
The Acsour recommends that planning the date of arrival for foreign employees (expatriate staff) in the territory of the Russian Federation be performed beforehand during the World Football Cup. Our Experts are ready to render help in performing immigration registering within the time specified as well as provide duly consultations.