President Putin Calls for 13 Percent Profits Tax on Repatriated Funds to be Scrapped
Russian President Vladimir Putin has called for the tax on profits realized overseas then repatriated to Russia to be scrapped. A recent amnesty has been in place, although this expired in mid-2016. Russia’s tax laws counter that a 13 percent tax is due on profits remitted back to Russia.
The President also proposed to exempt entrepreneurs who transfer business from abroad to Russia from paying income taxes.
Meeting with a group of Russian MPs ahead of next year’s elections, President Putin said, “The first step is to extend the amnesty period for capital, referring to those external restrictions that do not become smaller, but, on the contrary, appear to have a tendency to increase.”
The amnesty on repatriated capital became effective from July 1, 2015 until June 30, 2016. This rule allowed Russian taxpayers to voluntarily declare their assets and accounts in foreign jurisdictions. In exchange, those who declared their capital were exempted from criminal or administrative responsibility and from paying taxes for past periods. However, few businessmen have taken part in the amnesty program. Russia has experienced considerable capital flight since sanctions were imposed on it by the West.
Russian Finance Minister Anton Siluanov said on Friday that his ministry was proposing such an amnesty be restored in 2018 for at least a year. Following this move, it can be expected the tax is likely to be abolished altogether. Among other tools discussed to encourage the return of capital to Russia will be a special bonds program, with details to be announced later in the coming year.
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