Breaches of interaction chains and changes in the customary conditions of doing business now most acutely impact businesses and the whole world of finance. What should one know about legislative initiatives, new risks and new opportunities? In anticipation of the International Tax Planning-2022 conference, we spoke about this with Valentin Moiseev, attorney at law, partner and head of Tax group of Andrey Gorodissky & Partners.
– Valentin, this year has brought about plenty of changes. Can you point out the main novelties in the currency control regulations? What is most important to companies?
In the currency control regulations, the most important novelties were surely unprecedented restrictive measures introduced by the Presidential Decrees in late February and in March. Apart from the very rigid restrictions on currency transactions and various deals, these measures are due to their urgency characterized by ambiguous descriptions which entail unjustified risks for Russian residents.
Deals involving capital of Russian companies now are also a serious problem faced by both foreign businesses leaving the Russian market and the residents whose business structures involve offshore companies.
– What impact have these changes had on Russian laws?
The existing circumstances have increased the role of decisions of the Government Commission and explanations of the Central Bank of Russia, the regulator which has actually become the legislator in the currency control sphere.
– Speaking about your practice of law, what cases are most frequent now? What issues your clients need to tackle?
The main issue for companies is making deals to ensure withdrawal of foreign investors from Russian and transfer of Russian assets to residents. This involves plenty of regulatory and tax issues.
We also see higher activity of tax authorities conducting on site audits – these quite routine procedures take a considerable portion of work as well. And, certainly, sector specifics should be noted - IT companies are striving to use tax benefits granted at maximum.
– How does the tax amnesty law work under the new circumstances? What stumbling blocks have emerged?
The fourth amnesty phase is sought after by investors who have decided to link their business with their stay in Russia. Most of our clients’ requests are related to legalization of holding of Russian assets through CFCs (controlled foreign companies) subject to further registration of the assets in the client’s name. In this context, a special attention should be paid to identification of CFC’s assets in the relevant section of a special declaration.