MOSCOW – Russian President Vladimir Putin has signed a law allowing Russian citizens who live abroad permanently not to notify tax bodies of the opening of foreign accounts.
The regulation, which amends the Law On Forex Regulation and Forex Control, is available for viewing on the official legal information portal.
The State Duma passed the document on December 15, 2017 and the Federation Council approved it on December 26.
Under the adopted law, citizens who live abroad permanently will not be required to notify the Russian tax bodies of changes in the foreign bank account details and report on the flow of funds on foreign accounts. The category “permanently living abroad” includes citizens who are abroad 183 days or more in a calendar year. The days are not counted consecutively, but rather by the total number of days in one calendar year. Citizens who live abroad less than 183 days in a year will be subject to all existing restrictions and obligations under the forex legislation.
The document introduces the concept of a “currency resident” in accordance with the concept of a “tax resident.” It will mean that a currency resident living abroad permanently will not be required to report on the flow of funds on his foreign accounts and will not be required to report the creation of a foreign account to the Russian tax services.
Under the new law, citizens who live abroad permanently will be able to freely transfer money between private individuals, bypassing banks authorized by the Russian Central Bank that are located on the territory of Russia.
The law also expands the list of allowed transactions in which funds can be debited directly to foreign banks in transactions involving the sale of real estate and vehicles.
The liberalization of the legislation was necessitated by the fact that Russia is entering a period of automatic information exchange with foreign financial organizations. The Finance Ministry fears that may lead to an increase in the number of violations detected.
By the second reading of the bill, a provision was added to it in accordance with which Russian permanent diplomatic missions to international (interstate, intergovernmental) organizations and representations of federal bodies of executive authority abroad are classed as residents.
These changes take effect on January 1, 2018.
