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New Regime for Paying PIT on CFC Profit

KPMG Review

KPMG Review

The Tax Code of the Russian Federation has been amended to allow individuals who are controlling persons of foreign companies (hereinafter "CFCs") to pay PIT not on the actual profit of each CFC, but on the fixed amount of profit of all CFCs, regardless how many there are. The amount of PIT on this profit will be approximately RUB 5 million. This new CFC profit tax regime can be applied as early as 2020’s tax return. The new tax regime does not apply to controlling persons that are legal entities.

The KPMG Review analyses the main conditions for applying the new regime as well as its key merits and drawbacks.