The tax law of the Russian Federation has been amended to allow individuals who are controlling persons of foreign companies (CFCs) to pay individual income tax not based on the actual profit of each CFC, but based on a fixed amount of profit of all CFCs, regardless how many there are.
The amount of fixed profit will be approximately RUB 38.5 million for 2020 and then RUB 34 million for 2021 and later years. Thus, the amount of individual income tax on this CFC fixed profit under the new regime will total approximately RUB 5 million.
This new CFC profit tax regime can be applied as early as the tax return for 2020, but the controlling person must submit by 1 February 2021 a notice to the tax authority of the election to pay individual income tax on fixed profits by 1 February 2021.
This new tax regime does not apply with regard to controlling persons that are legal entities.
For more information, contact KPMG’s Global Head of International Tax:
Rodney Lawrence | +1 (312) 665 5137 | firstname.lastname@example.org
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