Opening remarks by Dmitry Medvedev:
Meeting on controlled foreign companies and voluntary declaration of assets
Colleagues, it’s imperative that we conduct periodic reviews of the legal implications of our decisions, including those enshrined in laws or Government acts. Today, let's focus on progress in an area that in our country we conventionally refer to as deoffshorisation. This is a salient issue, which the business community is sensitive to, and it draws analysts’ attention in general.
We proceed from the assumption that, on the one hand, this is something we must do in today's economy. This is a global trend, and these processes are underway virtually everywhere in the world. On the other hand, we promised to proceed carefully, keeping in mind our ultimate goal, which is to improve business environment, in other words, the investment climate in our country.
Our common goal was to develop rules of conduct that would be both clear to entrepreneurs and realistic. These rules should be complied with, in terms of both requirements and administration.
Once we agree on the rules, we will expect businesses, legal practitioners, and law enforcement to act responsibly.
New provisions have been included in Russian tax legislation as part of our policy to modernise our economy and to conduct deoffshorisation. The law On Voluntary Declaration of Assets and Bank Accounts (Deposits) by Individuals entered into effect on 1 July. The law established legal mechanisms for this kind of declaration. It provides guarantees to people who are willing to pull their assets from the “grey zone,” including the possibility of obtaining a title for property that was previously registered to nominal owners. The applicants will be exempt from legal liability to a certain degree. As a reminder, the deadline for submitting such declarations expires in 2015.
According to the Taxation Service, this process is slow, much slower than originally expected. We need to discuss additional decisions that may be needed, identify possible legal oversights and reasons for such inactivity and clearly outline the regulators’ authority, and other issues. Legislation on controlled companies (CFC) is another related issue. In late 2014, the law was amended to include the use of “low-tax jurisdictions.” The business community also has questions about legal practices. We agreed to sit down and discuss them. I’m aware that my colleagues had a preliminarily discussion of these questions.
Let’s go over these issues.
