Russian companies may gain access to offshore locations in Vladivostok and Kaliningrad
2021-11-18 12:09

Russian companies may gain access to offshore locations in Vladivostok and Kaliningrad

The Russian authorities are developing amendments to the Tax Code, after the adoption of which companies will be able to obtain corporate residence and register in special administrative areas (SARs), the so-called offshore areas, on the islands of Russky and Oktyabrsky, Vedomosti writes.

It is likely that the measure was a response to the claims of the European Group on the application of the Business Tax Code, including discrimination against Russian groups over foreign - this thesis was included by the EU Council in its June report, the newspaper said.

Initially, ATSs were created for foreign companies with Russian roots to bring them back into Russian jurisdiction. The changes, when domestic holdings are invited offshore, the government wants to encourage them to form a real presence on the islands, the paper's interlocutors suggest.

As part of the reforms they want to offer businesses additional benefits: reduced tax rates on capital withdrawal from 15 to 10%, on profits - up to 5%, on profits in the form of dividends - down to 0%. Preferences will be available subject to certain conditions, in particular, residents will be required to invest 300 million rubles into the infrastructure of the islands and open there a real office of 100 square meters with a staff of at least 15 people. At the same time only organizations with the status of an international holding company, whose income structure is not less than 90% of the income from passive activities, would be eligible for the tax relief.

In addition, it is planned to make the move possible only if the business purpose of the re-registration is justified and complied with. The group will have to not only change the address of the holding, but also transfer real management decisions and, possibly, executive bodies to the island.

As the publication notes, options for formalizing such concept are still under discussion, but, in fact, such a maneuver is assumed for any change in the official location of the company.

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Author: Karina Kamalova