The Russian Government approved the Concept for the production and use of electric vehicles until 2030. Electric vehicles envisaged those powered by electric batteries and hydrogen fuel cells including passenger cars, trucks and similar vehicles.
Starting from 13 July 2021, Russian credit institutions and other payment service providers are prohibited from interacting with illegal gambling and lotteries operators and foreign payment service providers who accept and transfer payments to illegal gambling and lottery operators. The restrictions are adopted by the Amendments to the Gambling Law (“Law”).
The law provides for mandatory carbon reporting as well as voluntary climate projects such as carbon offsets trading
The Russian Federal Tax Service (the “FTS”) has issued a letter clarifying the provisions of Article 54.1 of the Russian Tax Code on tax avoidance, outlining a methodology for tax inspectorates on how to identify misrepresentations of business operations, check material facts and intent to use sham or “fly-by-night” companies. It also provides taxpayers with criteria for counterparty due diligence, which should eliminate the possibility of their subsequent tax liability.
In addition, the FTS has finally admitted the need for so-called “full tax reconstruction” (a comprehensive reclassification of transactions previously applied only by the courts) and the ability to deduct actual expenses for corporate profits tax purposes and to offset input VAT on transactions with sham companies. However, this is possible only if a taxpayer discloses the actual suppliers and financial terms in such transactions.
The global drive towards decarbonization of the global economy plays an increasingly significant role in Russia’s strategy for development of its energy and other carbon intensive industries. It has its own renewables, energy efficiency and environmental programs, develops national carbon laws and has major plans for hydrogen. In particular, Russia intends…
New amendments to the Russian Tax Code1 (“Law”) will allow individuals to reduce the Russian individual income tax on profit distributions from foreign companies and unincorporated vehicles (e.g., trusts) sourced from dividends originally paid by Russian companies that are subject to Russian withholding tax (“indirect tax credit”).
The Law eliminates the existing double taxation and economically equates ownership of Russian assets via Russian and foreign companies (trusts). At the same time, the Law eliminates the 0% tax rate previously available for Russian companies on dividends received through intermediary foreign companies that are not beneficial owners of income. This will allow, for example, the application of the 15% Russian withholding tax rate on dividends paid to Cypriot and Luxembourg intermediary companies under the recently amended tax treaties. Some historic holding structures will get a deferral; for them the new rules will apply as of 2024.
On 1 December 2020, the Luxembourg tax authorities issued Circular L.I.R. n° 147/2, 166/2 et Eval. n° 63 (“Circular”) regarding non-eligibility of Gibraltar companies for the provisions of Directive 2011/96/EU (parent-subsidiary directive).
Russia’s Supreme Court confirmed that a company can be liable under Article 19.28 of the Administrative Procedure Code (“Illegal remuneration on behalf of a legal entity”) for the actions of third parties with whom that company has no formal contractual, employment, or other legal relationship.1
The court clarified that a company may be held liable if its officers either knew about such actions, or approved or instructed the respective third parties with regard to such actions. Another requirement for prosecution is that the company must have an “economic or other material interest (for example, a reputational one)” in the performance of such actions.
In light of this clarification, companies now face increased risk under Article 19.28 for the illegal actions of persons such as employees of their dealers, distributors and other counterparties.