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Saturday, January 20, 2018

Eternal residency: fleeing their homeland the Russians will be obliged to report foreign accounts

The Finance Ministry has drafted a bill that would require Russians living abroad, to report the existence of accounts in foreign banks. If the changes will come into force, the Russian tax residency will actually “eternal”.

photo: Natalia Muslinkina

The Finance Ministry proposes to consider the citizens of Russia currency by residents of their country, regardless of how long they live abroad. The corresponding bill published on the portal disclosure of draft normative acts.

Under current law, the Russians are losing this status if you live outside of the country a year or more on any legal basis (for work or study visas, residence permit, etc.). However, the Finance Ministry proposes to deprive of Russians of possibility to get rid of currency of residence.

Russian residents are required to notify the tax authorities about opening of accounts in foreign banks and to report annually on the movement of funds in such accounts.

In addition, there are restrictions on the set of operations that can be performed with the use of foreign accounts (for example, right now on this account you cannot Deposit money received from the sale of a car or real estate to a nonresident).

According to the Ministry’s initiative, in case if the Russians, who a year or more living abroad decide to return home, they will be required to report on foreign accounts and currency transactions for the entire period of absence in the country. The proposed changes will affect at least two million people.

Note that for violation of legislation on currency control now provides for fines of up to 100 per cent of funds in foreign accounts. A new law is proposed to enter into force from 1 January 2018.


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