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Russia’s State Duma adopts package of laws on extension of capital amnesty

The adoption of laws is aimed at creating favorable conditions for the transfer of assets to the Russian jurisdiction

MOSCOW, May 16. /TASS/. The State Duma, lower house of the Russian parliament, has adopted in the third and final reading the package of laws on the third stage of capital amnesty. The laws contain amendments to Russia’s Tax Code and the Code of Administrative Offences.

As part of the third stage of the amnesty, individuals will be able to declare their assets and bank accounts from June 1, 2019 to February 29, 2020. They will retain all their guarantees in exchange for repatriation of funds and state registration of foreign companies they control in special zones in Russia’s Kaliningrad region and Primorsky Krai.

The amendments to the Code on Administrative Offenses and the Criminal Code provide that capital amnesty participants will not be prosecuted in Russia for violations, if those violation were committed before January 1, 2019 (earlier - before January 1, 2018).

The amendments to the Tax Code imply that a capital amnesty participant will be freed from personal income tax, which is imposed on the profit of a foreign company under his or her control, provided that the taxpayer was not recognized as a tax resident of the Russian Federation for the tax period 2018 year.

The adoption of laws is aimed at creating favorable conditions for the transfer of assets to the Russian jurisdiction.

Earlier, Russian President Vladimir Putin proposed extending capital amnesty for at least a year, but only for those who transfer funds to the Russian Federation and register a business in special administrative zones.

About capital amnesty

Capital amnesty implies legalization of Russians’ foreign assets. The first stage of the amnesty took place from July 1, 2015 to June 30, 2016, when the tax authorities collected about 7,200 declarations of foreign property and assets of Russians.

The second stage started on March 1, 2018 and ended on February 28, 2019. During the second stage assets worth more than 10 billion euros were declared. In exchange, the claimants were released from tax, administrative and criminal liability for violations of tax and currency legislation. Amnesty applies to all income, transactions and transactions related to foreign assets and accounts. Those who wanted to return capital to Russia could do it without paying income tax or personal income tax.

On March 6, the Finance Ministry submitted a bill on the third stage of capital amnesty. According to the document, owners of the assets abroad can submit declarations from May 1, 2019 to February 29, 2020.