New Income Tax On Withdrawal Of The Funds

On November 27, the latest amendments to the Russian Tax Code came into force, in addition, certain provisions of the law will only come into force starting from January 1 next year.

The amendments were prepared as part of the reform of the tax system and concerned the taxation of foreign controlled companies, as well as the payment of certain types of taxes such as VAT, personal income tax, income tax, etc.

The changes affected certain activities of organizations including the taxation of income upon the exit of one of the members of the organization or upon its liquidation. Under the new law, income received by a shareholder or a member of an organization and subject to tax must be calculated in an amount exceeding the actual paid value of the shares or interests.

At the same time, if a person used property or property rights as a share in the establishment of the organization, either the results of the assessment of the market value of the property or property rights contributed to the authorized (share) capital of the organization or transferred to third parties on the date of such Deposit or transfer, or documentary evidence of their value will be used to calculate the difference.

In addition, the law provides for multiple clarifications of the rules relating to tax deductions and reduced tax rates for organizations registered within special economic zones. The changes introduced largely differentiate the tax regime of special economic zones, and therefore require more attention from organizations when choosing a specific free economic zone.

New Tax Laws in relation to Foreign Controlled Companies to be Implemented in Russia, Let’s see what changes will be brought in!