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Billionaire Usmanov to regain Russian tax resident status

December 28, 2016, 18:40 UTC+3 MOSCOW
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MOSCOW, December 28. /TASS/. Russian billionaire Alisher Usmanov said on Wednesday he would return his status of Russia’s tax resident after quitting the post of the International Fencing Federation (FIE).

"I’m now staying in the place where the bureau of our federation and the office of our federation are registered and, incidentally, this is not Switzerland, and that is why I have to live and register there and for the period I was elected the Federation’s president I must be there. All the rest are conjectures," Usmanov said in an interview with Rossiya-24 TV Channel.

Usmanov’s assets

Usmanov is the largest beneficiary of USM Holdings registered in Cyprus (it controls 100% of Russian metals giant Metalloinvest) with a stake of 48% The holding’s other shareholders are the structures of Vladimir Skotch (30%) and Farhad Moshiri (10%).

USM Holdings is a versatile international company. Aside from controlling Metalloinvest, Russia’s largest iron ore producer, it manages telecoms, Internet and media assets, including cell phone operator MegaFon, IT company Mail.ru Group and also UTV Holding.

In 2014, USM Holdings transferred the controlling share packages of its largest assets - MegaFon and Metalloinvest - to Russian holding companies. USM Holdings explained this move by Russia de-offshorization policy proclaimed by President Vladimir Putin.

Starting from November 8, 2016, 100% of Metalloinvest shares are controlled by the Russian company USM Metalloinvest, according to data from the corporate disclosure website. MegaFon’s controlling stake is held by the Russian company AF Telecom Holding.

Tax payment jurisdiction

In early 2015, Russia adopted a law on controlled foreign companies, obliging Russians to inform tax authorities of their share of over 10% in such businesses.

With a share of over 25% and corporate profits of more than 30 million rubles ($495,000 at the current exchange rate), Russian entities and individuals are required to pay an extra 20% and 13%, respectively, in taxes.

Russian tax residents pay taxes on incomes received worldwide while nonresidents pay taxes only on earnings from sources in Russia.

As Forbes magazine reported earlier, this law forced some businessmen last year to give up their tax resident status in Russia. In particular, this was done by Mikhail Fridman and Alexei Kuzmichev holding stakes in Alfa-Group, a major private investment group in the country.

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