scholarly journals International development of the concept of taxation of a permanent representation of a foreign company as an “independent taxpayer” and the experience of its application in the Russian Federation

2021 ◽  
pp. 16-25
Author(s):  
Pavel Igorevich Yakovlev
Keyword(s):  
International Development ◽  
Russian Federation ◽  
Tax Evasion ◽  
Foreign Company ◽  
Double Taxation ◽  
Foreign Companies ◽  
Tax Legislation ◽  
The Russian Federation ◽  
International Tax ◽  
Model Agreement

The subject of this research is the development of the concept of taxation of permanent representations of foreign companies on the international level and its application in the Russian Federation. The object of this research is the permanent representations of foreign companies. The author examines such aspects of the topic, as the use of agreements on avoidance of double taxation, countering the tax base erosion, and the international approach towards taxation of the permanent representation of a foreign company as an independent participant of the market relations. Analysis is conducted on the need for amending the Model Agreement of the Russian Federation of 02.24.2010 No. 84 “On conclusion of intergovernmental agreements on avoidance of double taxation and on prevention of tax evasion on the income and property”. The author traces the transformation of attitude of international tax organizations towards the concept of permanent representation and substantiation of their choice of the concept of taxation of a permanent representation as an independent taxpayer. The scientific novelty is proven by the facts of application of this concept of taxation of permanent representation in the national legislation of multiple countries, international agreements on avoidance of double taxation, Russian national tax legislation and arbitration practice. The main conclusion consists in the response to the selected by the international tax organizations concept of taxation of a permanent representation. The author offers to amend the Model Agreement of the Russian Federation of 02.24.2010 No. 84 “On conclusion of intergovernmental agreements on avoidance of double taxation and on prevention of tax evasion on the income and property”.

scholarly journals The peculiarities of taxation of permanent representations of foreign companies in accordance with the agreements on the avoidance of double taxation in the Russian Federation

2021 ◽  
pp. 61-70
Author(s):  
Pavel Igorevich Yakovlev
Keyword(s):  
Russian Federation ◽  
Double Taxation ◽  
Potential Conflict ◽  
Foreign Companies ◽  
Tax Legislation ◽  
Conflict Situations ◽  
The Russian Federation ◽  
The Impact ◽  
Parent Companies ◽  
Foreign Parent

The subject of this research is the taxation of permanent representations of foreign companies, while the object is the permanent representations of foreign companies. The author examines such aspects of the topic as the impact of international agreements on the avoidance of double taxation upon the conduct of activity by the permanent representations in the territory of the Russian Federation, calculation of profits of permanent representations, and potential conflict situations due to the differences in the Russian tax legislation and the concluded tax agreements. The article explores the methods of transferring expenses confirmed by the accounting source documents, from permanent representations to the foreign parent companies in for the purpose of reduction of tax basis as well as presents the relevant arbitrage practice on the topic. The scientific novelty is substantiated by the use of permanent representations by both Russian and foreign companies, relevant problematic of their taxation in the Russian tax jurisdiction, which is the result that tax agreements contain only general norms and principles of calculating the tax basis for permanent representations. As a conclusion, the author makes proposals on specification of tax agreements with regards to toughening the requirements to calculation profits of the permanent representations and its redistribution, proof of expenses that could be unlawfully used or transferred to the foreign parent company to reduce the tax basis of the permanent representations.

scholarly journals The Concept of General Rules against Tax Evasion in Russian Tax Legislation

2021 ◽  
Vol 16 (1) ◽  
pp. 71-79
Author(s):  
N. G. Andrianova
Keyword(s):  
European Union ◽  
Russian Federation ◽  
Tax Evasion ◽  
Structural Elements ◽  
The European Union ◽  
Tax Legislation ◽  
General Rules ◽  
The Russian Federation ◽  
The Stability ◽  
Theoretical Foundations

In conditions of unfair tax competition between states and increasing commitment of taxpayers to reducing the tax burden, countering tax evasion becomes an urgent problem. The implementation of general rules against tax evasion constitutes one of the most effective mechanisms to counter the erosion of the taxable base and the withdrawal of profits from taxation. The paper explores the theoretical foundations of general rules against tax evasion, highlights the experience of the European Union in terms of formation of the concept and legal design of general rules against tax evasion, and discloses the nature, purpose and cases of their use. Based on the analysis of the jurisprudence of the Court of Justice of the European Union, as well as the directives of the European Union containing provisions concerning general rules against tax evasion, the author draws a conclusion on structural elements inherent in general rules against tax evasion. The paper provides for an analysis of the experience of the Russian Federation in this area, proposes promising ways to improve the legislation enshrining general rules against tax evasion in Russia. The author researches judicial doctrines applied in the Russian Federation to recognize the tax benefit received by the taxpayer unjustified, analyzes the provisions of Art. 54.1 of the Tax Code of the Russian Federation. The author concludes that there is a problem of uniform application of the provisions of Art. 54.1 of the Tax Code of the Russian Federation, which violates the stability and predictability of tax practices necessary for enterprises’ business activities. The author also concludes that it is necessary to carry out substantial reviewing of the general rules against tax evasion in Russia in order to improve their application and consolidate additional guarantees of taxpayers’ rights.

scholarly journals Rules for Tax Re-Qualification of Income of Controlled Foreign Companies in BRICS Countries on the Example of Russian and Brazil Approaches

2021 ◽  
Vol 16 (12) ◽  
pp. 11-23
Author(s):  
I. A. Rakov
Keyword(s):  
Developing Countries ◽  
Russian Federation ◽  
Tax Evasion ◽  
Regulatory Function ◽  
International Level ◽  
National Legislation ◽  
Foreign Companies ◽  
Legal Studies ◽  
Brics Countries ◽  
The Russian Federation

Rules on taxation of controlled foreign companies in developed and developing countries are characterized by an anti-evasive regulatory function, which is implemented by means of re-qualifying the profits of such companies. Such relations require coordination not only at the national but also at the international level (actions of the BEPS Plan, recommendations of the Organization for Economic Cooperation and Development). The Russian Federation and the Federative Republic of Brazil, being the BRICS member states, are actively improving their national legislation, while comparative legal studies on the topic of tax retraining of these jurisdictions at an integrated level have not yet been carried out. Using Russian and Brazil approaches as an example, the author explores the problems of improving tax re-characterisation mechanisms, taking into account the general standards of countering tax evasion and erosion of tax bases (BEPS Plan).

scholarly journals Review of case law on notification of tax authorities on the controlled foreign companies

2021 ◽  
pp. 10-25
Author(s):  
Aleksandra Melnikova
Keyword(s):  
Incomplete Information ◽  
Russian Federation ◽  
Case Law ◽  
Legal Regulation ◽  
Foreign Company ◽  
Foreign Companies ◽  
The Russian Federation ◽  
Orthographic Errors

This article is dedicated to revelation and analysis of the gaps in legal regulation of profit taxation of controlled foreign companies (CFC) and notification of tax authorities on the controlled foreign companies via examining the available case law. The author determines six types of legal disputes that arise in the context of submission of participation notices in CFC, as well as CFC notices. Analysis is conducted on the methods of elimination of gaps in legislation of the Russian Federation on controlled foreign companies by introduction of point amendments to the current legislation on CFC. Settlement of legal disputes over interpretation of the Paragraph 7.1 of the Article 309.1 and Subparagraph 2 of the Paragraph 1 of the Article 25.13-1 of the Tax Code of the Russian Federation requires supplementing the Article 25.14 of the Tax Code of the Russian Federation with the Paragraph 3.2 of the following content: “The obligation on submitting the CFC notice does not depend on the financial results of CFC. The existence of tax exemption does not relieve of the duty to provide CFC notice”. The disputes often arise when the taxpayers default the submission period, and after receiving a request from the inspectorate, provide data for not only the companies listed in the request, but other companies as well. For avoiding any related disputes, it is recommended to supplement the Paragraph 2 of the Article 25.14 of the Tax Code of the Russian Federation with the following content: “A revised notice cannot be submitted with regards to CFC, the information on which was not provided in the initial notice”. In order to minimize the actions of inspectorate “with unacceptable formalism”, it is recommended to supplement the Article 129.6 of the Tax Code of the Russian Federation with the Paragraph 3 of the following content: “Submission of incomplete information or information containing technical or orthographic errors, which do not obstruct the identification of foreign company, are not considered a tax crime”.

scholarly journals MULTILINGUAL TAX TREATIES AND PECULIARITIES OF THEIR INTERPRETATION

2016 ◽  
pp. 0-0
Author(s):  
Инна Хаванова ◽  
Inna Khavanova
Keyword(s):  
Russian Federation ◽  
Tax Evasion ◽  
Case Law ◽  
Tax Treaties ◽  
Double Taxation ◽  
Authentic Texts ◽  
The Russian Federation

In this article dedicated to multilingual tax treaties special attention is drawn to the treaties concluded by the Russian Federation. The author points out that Russia has no treaties on the avoidance of double taxation and the prevention of tax evasion concluded in one language. The author examines the rules of construing and application of authentic texts of agreements and illustrates them by the Russian case law. Much attention in the article is paid to the analysis of the treaty construing rules applicable to the agreements whose text is authenticated in two or more languages. The aim of this article is to examine principles of multilingual tax treaties as well as widespread problems which arise in practice and to suggest possible solutions. The author reveals particular features of tax treaties which should be taken into consideration while construing such agreements. Special attention is paid to the discrepancy between texts in different languages.

scholarly journals The development of the concept of beneficial owner in the tax law of the Russian Federation

2019 ◽  
pp. 82-87
Author(s):  
E. A. Guznova
Keyword(s):  
Law Enforcement ◽  
Russian Federation ◽  
Historical Development ◽  
Modern Concept ◽  
Tax Law ◽  
Tax Legislation ◽  
Uniform Law ◽  
The Russian Federation ◽  
International Tax ◽  
The Moment

The article deals with the historical development of the concept of a beneficial owner in international tax law. It is noted that in the Russian Federation, the concept of beneficial owner was introduced into the tax legislation only in 2014, but attempts to use this concept were undertaken before 2014. The author thoroughly analyzes legal acts adopted before the “de-offshore law” and approaches to interpretation of the concept of the actual right to income; the paper examines the modern concept of “beneficial owner” set forth in the Russian tax legislation. In general, the concept of beneficial owner has passed a long way of development both in international practice and in the Russian Federation. At the moment, there are still difficulties in interpreting the concept of beneficial owner of income, as well as in the process of forming a uniform law enforcement practice in relation to the concept under consideration.

scholarly journals The peculiarities of international and Russian taxation of foreign organizations operating through permanent representation

2020 ◽  
pp. 1-13
Author(s):  
Pavel Igorevich Yakovlev
Keyword(s):  
Tax Evasion ◽  
Income Tax ◽  
Corporate Income Tax ◽  
Tax Base ◽  
Foreign Companies ◽  
The Subject ◽  
The Russian Federation ◽  
International Tax ◽  
The Impact

The subject of this research is the taxation of permanent representations of foreign organizations. The object of this research is permanent representations of foreign organizations. The author explores such aspects of the topic as prevention of tax base erosion, modernization of international tax relations, impact of international tax agreements upon the taxation legislation of the Russian Federation with regards to corporate income tax and transfer of expenditure by head organization to the permanent representation. Analysis is conducted on the problematic of Russian taxation of the permanent representations of foreign organizations, with consideration of the accepted international tax standards. The article examines the promptness and factors of implementation of new tax measures aimed at countering tax evasion. The scientific novelty is substantiated by the usage of permanent representations by Russian and foreign companies, remained problematic of their taxation in the Russian tax jurisdiction, flaws in the current tax norms, as well as the impact of international tax agreements upon Russian tax normative document. The main conclusions contain recommendations on modernization of the existing in Russia tax rules in the context of determination of the tax base and application of the “principle of gravity”, increase of accuracy in determination of the actual results of activity of the permanent representations for improving efficiency and achieving balanced level of taxation of the permanent representations, which also function within the framework of a single technological process.

scholarly journals Redomiciliation of Foreign Companies in the Russian Federation: Assessment of the Aggregate Financial Result

Lex Russica ◽  
2021 ◽  
pp. 71-81
Author(s):  
A. S. Konduktorov
Keyword(s):  
Russian Federation ◽  
Financial Burden ◽  
Economic Effect ◽  
Legal Regulation ◽  
Double Taxation ◽  
Direct Taxation ◽  
Foreign Companies ◽  
Foreign Countries ◽  
The Russian Federation

The paper attempts to assess the fiscal, investment, and monetary repatriation results of the application of legislation on the redomicilation of organizations registered in offshore states to Russian special administrative regions. The study was conducted in the context of the fundamental adjustment of agreements on the avoidance of double taxation concluded with foreign countries, which began in the summer of 2020 on behalf of the President of the Russian Federation. In this regard, the results obtained are more promising than current. In the course of the study, comparative legal and statistical methods were used, and the "reinvestment strategy" of economic entities, which is expressed in the reverse investment of funds previously transferred to the accounts of offshore organizations, was analyzed (In the context of changes in double taxation agreements).The outcomes of the analysis show that direct taxation of an international company that is redomiciled in the Russian Federation does not give a tangible fiscal result and is nothing more than a tool to increase the attractiveness of the Russian legal jurisdiction. However, the volume of mandatory investments accompanying the redomicilation procedure is significant in terms of the degree of financial burden on international companies, which should provide a fiscal effect for the budget system in the medium and long term. Cash-repatriation result of redomiciliation will be equal to the amounts reinvested in Russia from offshore countries; it is expressed in the improvement of the financial system of the Russian Federation by means of displacement of offshore practices. The author summarizes that, in general, the analysis of legal regulation indicates that the Russian Federation does not set the goal of increasing current budget revenues because of the application of the procedure of redomicilation of foreign organizations, but expects a promising financial and economic effect.

scholarly journals Compliance with Tax Laws in the Russian Federation: Trust or Control

TEM Journal ◽  
2021 ◽  
pp. 310-317
Author(s):  
Murat Aliev ◽  
Ekaterina Milovanova ◽  
Irina Moiseenko ◽  
Vladimir Molodykh
Keyword(s):  
Russian Federation ◽  
Tax Evasion ◽  
Subjective Perception ◽  
Public Authorities ◽  
Tax System ◽  
Tax Legislation ◽  
Tax Laws ◽  
The Russian Federation ◽  
Simulation Results ◽  
Medium Businesses

Tax evasion processes have been analyzed using the “slippery slope” concept, which has made it possible to assess the influence of socio-psychological and “rational” factors on the behavior of taxpayers in the context of voluntary and involuntary compliance with the tax laws. The representatives of small and medium businesses acted as the respondents, who evaluated their behavior in the framework of procedural, distributive, and punitive justice. The simulation results have shown that compliance with tax legislation, regardless of its voluntary or involuntary nature, depends on the level of trust in public authorities and the subjective perception of justice of the current tax system.

TAX CODE OF THE RUSSIAN FEDERATION, PART TWO: CHANGES HAVE OCCURRED - PROBLEMS REMAIN

2021 ◽  
pp. 122-127
Author(s):  
Нодари Дарчоевич ЭРИАШВИЛИ ◽  
Александр Иванович ГРИГОРЬЕВ
Keyword(s):  
Russian Federation ◽  
Income Tax ◽  
Personal Income ◽  
Personal Income Tax ◽  
Foreign Companies ◽  
Existing Problems ◽  
Tax Legislation ◽  
The Russian Federation

Налоговое законодательство России подверглось значительным изменениям в 2020 году. Был сделан первый шаг в реформировании концепции НДФЛ и контролируемых иностранных компаний (КИК). Авторами статьи была предпринята попытка осмыслить принятые изменения налогового законодательства и найти пути решения имеющихся проблем. Russian tax legislation underwent significant changes in 2020. The first step was taken in reforming the concept of personal income tax and controlled foreign companies. The authors analyze the adopted changes in tax legislation and look for ways to solve existing problems.

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