Russia: Tax audits of individuals with foreign-held assets, accounts
Russia: Audits of individuals with foreign-held assets
The Russian tax authorities have focused examinations on the tax compliance of individuals with assets or accounts held outside Russia.
The Russian tax authorities in late 2020 launched a review of taxpayers based on information received as part of the automatic exchange of financial information with foreign jurisdictions. Following this review, the tax authorities identified instances of possible taxpayer noncompliance and directed these cases to the territorial tax authorities for further processing and follow up with the identified individual taxpayers. Areas of focus were individual taxpayers possibly evading income tax on assets or accounts held outside Russia; concealing information and income from controlled foreign companies (CFCs); and violating the requirements of Russian currency legislation pertaining to bank account transactions outside Russia.
The subject individual taxpayers at the end of December 2020 received notifications of field tax audits and were directed to provide information and documents in relation to their accounts outside Russia from 2017, 2018, and 2019 (given that 2017 was the first year for which Russia received information as part of the automatic exchange of financial information).
For 2020, the reporting of income received outside Russia and via CFCs must be submitted by Russian tax residents by no later than 30 April 2021, and annual reporting for accounts with foreign banks and other financial market organizations are to be filed by Russian citizens (subject to certain exceptions) no later than 31 May 2021.
For more information, contact KPMG’s Global Head of International Tax:
Rodney Lawrence | +1 (312) 665 5137 | rlawrence@kpmg.com
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