Tell about your own foreign account or save on tax?

Рассказать о собственном зарубежном счете либо сберечь на налоге?

At the moment, more than ever, owners of foreign accounts and recipients of income abroad Russia is concerned about the issue, but it is worth providing information to the tax authorities about the presence of these very accounts and income? Or you can keep silent, save on tax, and no one will find out anything?

Tell about your own foreign account or save on tax?

so, незначительно о налоговом..

Let's start with combinations of dates and events. As almost everyone already understands, with 1 July 2015 the Russian Federation joined the Collective Convention OESR (Organization of financial cooperation and development) and the Council of Europe on mutual administrative support in tax matters. As a result, the Federal Tax Service of the Russian Federation already has the ability to send tax requests to more than 90 states and jurisdictions, including offshore zones.

IN 2017 year, a system common for all states was put into operation for the mutual exchange of data on foreign accounts, property and assets of foreign tax residents to the tax authorities of states, of which they are residents. Let's emphasize, that a foreign citizen can also be a tax resident. For this purpose, it is enough for him to be on the territory of the Russian Federation from 183 days per calendar year.

The Federal Tax Service of the Russian Federation connected to the previously mentioned system in 2018 year and began to receive the indicated information at that time to a greater extent from offshore zones in an electronic systematized form.

And what is next?

The number of offshore zones is limited. And it's clear, that the next step of the tax authorities is to identify all other owners of foreign accounts and foreign income. It could have been previously a method of sending a request through interpol, the answer according to which came quite rapidly, during 30 days. However, the process was complicated by the rationale behind this request.. The taxpayer had to somehow "tarnish" his reputation as an honest taxpayer, so that the relevant fiscal and other competent authorities are interested in them. That at the moment it is a sin not to use the possibility of electrical data exchange and quick receipt of information on the largest number of tax residents.. All the more, last August, the president was Amendments to the Law "On Monetary Regulation and Monetary Control" No. ФЗ-173 were signed. As well as, the plan for filling the treasury with tax deductions from individuals has not been canceled!

What does it mean after all? And that means, what with 01.01.2020 G. from individuals, including from financiers, emerged DUTY submit information (inform) tax on opening, closing and changing account details, opened in other foreign organizations of the money market (Part 1-2 of Article 12 of FZ-173). First of all, this is fundamental for the owners of brokerage accounts and accounts in payment systems..

*List of companies, which, in accordance with the current regulatory legal acts of Russia, refer to other monetary companies, приведен в п.1 ст.3 Общегосударственного закона N 223-ФЗ «О саморегулируемых организациях в сфере денежного рынка».

*More common payment systems are Vialet, PayPal, E-payments, Payoneer, Paysera, TransferWise, SatchelPay, Webmoney, etc.

And if earlier it was enough to inform about the existence of an account, opened in a foreign bank, then today this is not enough. Legislation is tightening. And despite the fact that, that while the KOAP does not provide for separate liability for failure to submit or violation of the deadlines for submitting information about accounts in other financial market organizations, no one and nothing will prevent the fiscal authorities from applying the existing articles of the CAO, Tax Code and Criminal Code of the Russian Federation in the current version.

Penalties and liability

For now, let's omit the issues of the intricacies of declaring information about such accounts., cash flows on them and income. Let's pay attention to Risks, namely the possible Penalties for violation of the current legislation of the Russian Federation in the framework of the issue under discussion:

– за непредоставление резидентами декларации. For every month (but not more than six months) late submission of information will be charged 5% of the amount of tax payable, but not less 1000 rub. (item 1 of Art. 119 NK RF);

– за неуплату налога, how complete, and partial, a fine of 20% from unpaid tax; and if the presence of intent is proved - 40% (item 1, paragraph 4 of Article 122 of the Tax Code);

– за просрочку оплаты налога начисляется пеня в размере 1/300 refinancing rates on the amount of unpaid tax for each day of delay in payment; there are no restrictions on the amount of interest (Art. 75 NK RF);

– за нарушение срока информирования о счете в иностранном банке (about opening, Closing, changes in data or for non-compliance with the established form of notification) предусмотрен штраф в размере от 1 000 to 1 500 rub., if the data was provided independently in violation of the term for providing information; and from 4000 to 5000 rub., if information about the fact of discovery, closing or changing details came to the tax office from another source (P. 2-2.1 st. 15.25 KOaP RF);

– за неподачу и несвоевременную подачу отчета о движении средств на зарубежном счете, the amount of the initial fine will be from 300 to 3000 rub., при повторном нарушении – 20 000 rub. (Clause 6-6.5 of Article 15.25 of the Code of Administrative Offenses of the Russian Federation).

And everything would be fine. well, forgot to declare income, well, доначислили tax, well, paid a fine equal to 20 – 40% on the amount of tax and penalties for late payment of the same tax. But no.. It's all about, that the issue of foreign income and foreign accounts needs to be considered much deeper, because this issue borders on the legislation in the field of currency control, combating money laundering and terrorist financing, controlled foreign companies, as well as the rules for disclosure of beneficial owners. And this is already the risk of recognition of all foreign exchange transactions on all foreign accounts (and on enrollment, and on write-off) ILLEGAL. And here, in accordance with clause 1 of article 15.25 of the Code of Administrative Offenses of the Russian Federation, a fine for individuals can already be from 75 to 100% of the total amount of all transactions on a foreign account.

Opened a brokerage account, перевел на него 1000 USD, forgot to notify about the opening and about the movement, получи штраф 1000 USD, and even in the equivalent in rubles. And here the investor will not be able to explain anything., nor prove, even if you did not receive income at all for the reporting year.

And all the tax authorities need to prove, that the investor did not report that he had a brokerage account, which means he hid, and this, in turn, is a concealment of the possible income and the corresponding tax. And now the investor runs the risk of being found guilty of deliberate tax evasion and punishment in accordance with the Criminal Code of the Russian Federation (Article 198 of the Criminal Code of the Russian Federation "Tax evasion and (or) fees from an individual ").

How the tax office learns from the invoice?

Finally, come to that, that it will be almost impossible for an investor to hide the presence of a brokerage account, but the tax inspector should track the movement of funds to the brokerage account and vice versa, it will be very easy.

Here are just a few facts., which significantly simplify the tax authorities' verification of taxpayers for concealment of income abroad:

  • usually, funds are transferred to the brokerage account either from a ruble account in the territory of the Russian Federation, either from the currency, even abroad. In the first case, information on the movement of funds across the border goes to the tax authority through a single system with the Central Bank.. The Central Bank independently monitors such movements and "signals" to the tax authority. In the second case, the taxpayer independently provides an extract for all accounts, opened in foreign banks, and these operations will also be reflected in the statements;
  • tax authorities receive information automatically on the basis of an agreement on the provision of information about the accounts of its residents with 92 Countries;
  • tax authorities have the opportunity to obtain information of interest about the accounts of their residents in private on request, including through interpol.

Today, our government agencies have many different tools at their disposal., which allow you to track and verify the accuracy of the data we provide. Most of them are technical, ie. information processing is performed automatically with minimal use of operational manual labor, and sometimes even without him. Wanting to save on tax today, you run the risk of not only incurring costs for the same saved tax, fine and interest, but also to lose the opportunity to use possible losses to reduce income to tax in future periods. And also get a trailer for criminal liability.

Therefore, our recommendation always comes down to, that the amount of attention from the tax authority should be minimal. And you definitely shouldn't initiate any checks on your own., to check who is smarter. Work and earn within the legal framework in compliance with the current legislation of the Russian Federation. Declare income and taxes on time. Notify about opening / closing brokerage accounts in due course. Contact only experts, which will help to prepare the report and understand it.

Report your foreign account or save on tax?