Changes in tax legislation led to the fact that employees of the offshore companies belonging to the Russian businessmen are forced to leave the country to the place of registration of companies. Hundreds of Russians have moded to Cyprus since the introduction of the corresponsing law.
As Forbes found out, after the introduction of legislation on controlled foreign companies, a number of employees of the businessman Andrey Melnichenko's companies changed their place of residence and work from Russia to abroad. Among them, in particular, are the employees of Suek Plc, a Cyprus holding company that owned SUEK Group, the largest holding in the country dealing with the extraction of coal (about 25% of all Russian exports). Employees of Suek Plc moved to live and work in Cyprus, two sources told Forbes.
Representative of Melnichenko said that SUEK made reorganization of the corporate structure, which resulted in transformation of Russian SUEK into a holding company of the group, which will consolidate all the assets. According to this structure all coal assets transferred under the direct control of SUEK and Suek Ltd (another Cyprus company of Melnichenko's group) will manage the assets associated with brown coal and international trading operations.
According to the representative of Melnichenko, the Russian company "EuroChem" (Russia's largest producer of fertilizers), SUEK, and the first in Siberia on thermal power thermal generating company SGK pay taxes in Russia and are its residents (from January 1, 2016, all assets SGK registered at LLC " SGK ", which is registered in Moscow and pays all taxes in Russia). "" SUEK "The group was restructured in such a way that the consolidation and corporate management center was the Russian JSC" SUEK ", - said the representative of Melnichenko.
However, the tax status of Melnichenko and departure of employees in Cyprus, he refused to comment. "EuroChem" former employee and friend Melnichenko said Melnichenko spends a significant amount of time outside of Russia, and is likely to be non-resident (for this you need to spend more than 183 days a year outside the country). "He literally lives on his boat" - says Melnichenko familiar.
According to federal officials, Melnichenko as a physical person does not pay taxes in Russia and did not have such taxes (especially personal income tax) in recent years. The majority of businessmen who have been resident in recent years, disposed of offshore companies and simplified the ownership chain of a business, but with Melnichenko did not happen. For example, according to the website "EuroChem", Melnichenko company Linea (Bermuda) holds a 100% stake in AIM Capital SE (Cyprus, formerly known as the SE EuroChem Group), which owns 90% stake in the company EuroChem Group.
Partner UFG Wealth Management Dmitry Maples (see. His column on this subject on the Forbes website) said that previously existed, in fact, the only foreign company paper get a separate office, and the people before, employed in the Russian operating companies, are moving to foreign jurisdictions where are the directors and employees of these companies are operating. "In fact, transferred the center of activity and decision-making for the company. Such countries as Cyprus, Latvia, Luxembourg became the beneficiaries of the new Russian legislation. It is there mainly transferred its activities, as well as transport management team large owners. At the moment, there is a general understanding that the use of a company registered at the administrator and having a part of managers only nominees, is risky, "- wrote for Forbes Maples.
A prerequisite for these events was the introduction of January 1, 2015 in Russia on controlled foreign companies law (CIC) before April 1, the Russians must notify the tax authorities of their presence in such companies share more than 10%. If the share of over 50%, while the profit of the company for more than 50 million rubles (from 1 January 2016 - more than 25%, and 30 million rubles), will have to pay additional taxes: 20% for companies and 13% for individuals. Russian tax residents pay taxes on their income received throughout the world, and non-residents - only on income from sources in Russia.
However, the law only applies to the Russian tax residents. In this regard, many billionaires who want to circumvent the law, changed the tax residency. Forbes has reported that after the change of number of billionaires legislation ceased to be tax resident in Russia, in particular the shareholders "Alfa Group" Mikhail Fridman and Alexei Kuzmichev, and Alisher Usmanov. But Roman Abramovich, on the contrary, appeared a resident of Russia.
Alexander Zakharov Paragon Advice Group partner says that the Russian tax rules for determining residency for individuals written when deofshorizatsionnoy agitation was not considered that to be a resident of, and pay tax of 13% - it is a privilege, because non-residents pay to Russian sources, 30%. According to Zakharov, wealthy Russians easier formally remain, for example, residents of Monaco (or other low-tax jurisdictions) for reporting purposes in foreign banks when promoted, but not all of the possible automatic exchange. "The existing rules allow Russia not to be resident in any state, but that the problem for foreign banks in terms of self-certification tax residency customer," - said Zakharov.
According partner Dmitry Klenow, non-residents have decided to become many businessmen. "Accidentally usually tax non-residents are not - number of days outside the country counts the secretariat Aircraft wealthy people even specifically arrive at 00:01 to put a stamp on crossing the border the next day." - Says Maples. He believes that the law is in principle a fair, but in the mentality of many Russians inherent reluctance to disclose too much information, and many still believe that it is better to bypass the law than to obey him.
Without Russia, why the owners take out employees in Latvia, Luxembourg and Cyprus
decision-making center at the large owners transferred outside Russia. One of the reasons - a change in tax legislation
Traditionally, entrepreneurs are widely used foreign jurisdictions for establishment of companies for the purpose of tax planning. Often, these companies were only "mailboxes": they had no office, no staff, and we were the only beneficiary of the constituent documents and the service agreement with the administrator. Director of such companies can simultaneously serve in that capacity in hundreds of similar companies. Through these structures were significant financial flows, which, in turn, affect the effective tax rate of operating companies.
However, tax law and practice around the world evolved, and similar business models currently entail significant tax risks for both operating companies and for the beneficiaries. This is the actual place of management of the company, if the company is actually managed from one country, then it must pay taxes in the same country. This, in turn, causes the business to grant foreign companies the real function and move the control functions in the jurisdiction of incorporation of the company. There is such a thing as the actual content.
Previously existed essentially on paper only foreign companies are separate offices, and people previously, employed in the Russian operating companies, are moving to foreign jurisdictions, where they become operational directors and employees of these companies. In fact, transferred the center of activity and decision-making for the company. Countries such as Cyprus, Latvia, Luxembourg became the beneficiaries of the new Russian legislation.
At the moment, there is a general understanding that the use of a company registered at the administrator and having a part of managers only nominees, is risky.
The tax legislation provides that a foreign organization, which is controlled outside of the Russian Federation, recognized by a foreign organization if its commercial activities are conducted through its own qualified personnel and assets in the State of its permanent location, which has an international treaty of the Russian Federation on the issues of taxation, or in a foreign country of its separate divisions, which has an international treaty of the Russian Federation on taxation (p. 4 of Art. 246.2 of the tax Code).
Even before the entry into force of this provision of the Tax Code of the Federal Tax Service in the framework of inspections have already requested their foreign counterparts about the presence of personnel in a foreign company, a summary of Directors, information about the presence of a separate office, and the latest share this information.
However, there is no universal answer to the question: what should be the actual content of a foreign company. In this case, you must first of all be guided by the principle of "content takes precedence over form", as well as proceed from the real functions that performs this company. So, for example, direct investment and financial center of the filling will be different.
A popular question is under the theme: what content is necessary for the company, which on the balance of one investment or a loan. To find the answer to this question is interesting to refer to international practice, which has developed requirements for similar situations.
In particular, in the Netherlands there is a so-called substantial participation mode. This mode - a set of anti-uklonitelnyh rules that are used to understand, is it possible to apply the reduced tax rate to the dividend payable. Within the framework of these rules in detail studied business functions at the level of the indirect shareholder of the Dutch company in respect of investments: in particular, must have staff who are responsible for the operation or development of the investment business.
It is also interesting to turn to law enforcement in Austria: so for the purposes of the use of low tax rates at the source of payment of dividends is necessary to ensure that the owner of the Austrian investments perform any additional functions in relation to this investment, for example, provides advice on management issues. In the framework of control activities the Austrian fiscal authorities can also request information on the number of personnel and functional.
Very hard are the provisions of the German tax legislation. It is also necessary to prove that the German shareholder of the company, or the company, standing on the German shareholder of the asset has the required level of the actual content. In other words, a company is not only the directors but also the relevant personnel, skilled enough to carry this line of business.
The above examples are from countries with serious fiscal discipline and complex legal structures. But it was the use of similar mechanisms, in my view, to avoid disputes with the Russian inspectors. All this will lead to a significant appreciation of the foreign structure and here is it will be necessary to study the question of whether it is cheaper to contain a foreign structure or translate all the activities in Russia.