The state Duma on Friday, March 17, adopted on second reading of the bill with the amendment, which permits came under Western sanctions persons to declare themselves tax-resident, even if they are more than six months living in Russia.
The amendment will not result in the loss of “a single penny” of the budget but instead will increase the taxation of the participants of the sanctions list, says the author of the initiative, Chairman of the Duma Committee on budget Andrey Makarov. By declaring itself a tax resident of another state, such persons will have to pay not 13%, and 30% on income received in Russia, he explained. On the income obtained by these people in other countries, the Deputy did not mention.
The non-residents pay income tax only on income earned in Russia (at a rate of 30%), but not foreign income. And residents must be in the General case, to pay tax both with Russian and foreign income at the standard rate of 13%.
People who fell under the sanctions of the European Union or the United States can’t leave Russia and, accordingly, are considered to be Russian tax residents, says Makarov. But according to European tax laws, the same people can be recognized as tax residents of European countries other than the Russian criteria — if these countries are so-called vital interests of participants of the sanctions list, said the Deputy. “That is enough to have some property, a company, any profits [abroad] and you can be recognized in this country by a resident of a particular country,” says Makarov.
In a typical situation, the issue of double taxation of such persons is addressed in the negotiations of the financial departments of the countries concerned, said the MP. But in terms of sanctions the impact of such negotiations is questionable. “But in itself, the divergence in the tax systems of the countries gives you the opportunity to bring these individuals to justice in the countries where they can be automatically according to their laws recognized by residents,” — says the Deputy.
The amendment merely invites the participants of the sanctions list throughout the duration of the sanctions to apply to the tax office about a resident of what country they are, insists Makarov. “This will allow the government to protect its citizens”, — says the Deputy. As it is the failure of participants of the sanctions list of Russian residency will help Russia to protect them, Makarov explained. But promised that he created the mechanism could be used “in case of unwarranted political impact on our country.”
Opponents of his amendment, the Makarov was accused of “dislike for the country” and attempting “to inflame the distrust of the citizens of the country”.
Among more than 150 Russians, came under personal sanctions of the EU and the United States, there are businessmen, who pay taxes in other countries. For example, Gennady Timchenko (US sanctions list) has told in interview to the Russian Forbes in 2012 that “long paid taxes in Finland”, and then became a tax resident of Switzerland. A citizen of Russia and Finland is Boris Rotenberg (US sanctions).