Russia: Tax audits of individuals with foreign-held assets, accounts

Russia: Audits of individuals with foreign-held assets

The Russian tax authorities have focused examinations on the tax compliance of individuals with assets or accounts held outside Russia.

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The Russian tax authorities in late 2020 launched a review of taxpayers based on information received as part of the automatic exchange of financial information with foreign jurisdictions. Following this review, the tax authorities identified instances of possible taxpayer noncompliance and directed these cases to the territorial tax authorities for further processing and follow up with the identified individual taxpayers. Areas of focus were individual taxpayers possibly evading income tax on assets or accounts held outside Russia; concealing information and income from controlled foreign companies (CFCs); and violating the requirements of Russian currency legislation pertaining to bank account transactions outside Russia.

The subject individual taxpayers at the end of December 2020 received notifications of field tax audits and were directed to provide information and documents in relation to their accounts outside Russia from 2017, 2018, and 2019 (given that 2017 was the first year for which Russia received information as part of the automatic exchange of financial information).

For 2020, the reporting of income received outside Russia and via CFCs must be submitted by Russian tax residents by no later than 30 April 2021, and annual reporting for accounts with foreign banks and other financial market organizations are to be filed by Russian citizens (subject to certain exceptions) no later than 31 May 2021.


For more information, contact KPMG’s Global Head of International Tax:

Rodney Lawrence | +1 (312) 665 5137 | rlawrence@kpmg.com

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

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