Call Us for a Free No-Obligation Quote 1. In the Russian Federation, as russian foreign currency control by the Central Bank of the Russian Federation, currency operations can only be done with a licence obtained from the Central bank.
The process of obtaining a license usually takes several months granted the appropriate paper work is completed. Furthermore, goods cannot be sold for foreign currency and foreign individuals wishing to purchase goods in Russia must exchange their respective currencies into roubles. Domestic legal entities can settle with one another without limit in roubles. Transactions involving foreign entities must follow Central Bank procedures as these are deemed currency operations.
All import and export transactions performed by Russian legal entities must be transacted in roubles and rouble-denominated securities according to protocol established by the Central bank with regards to cross-border operations. A special license must be acquired in order for Russian legal entities to open bank accounts outside the Russian Federation. Bank transfers pertaining to non-trading activities including salaries, pensions, inheritance, etc. Russian legal entities must be converted through the Russian banks on the local currency market. 10,000 USD permission must be given confirming that the transaction is justified. Foreign legal entities can remit, import and transfer currency without limit in the Russian Federation as long as customs regulations are followed if such currencies have been remitted, imported or transferred in the Russian Federation in the past.
If not, the currencies are subject to restrictions. Russian legal entities, is not required for foreign legal entities. Greek citizen setting up in Cyprus – The checklist! All Russian citizens with bank accounts outside Russia must submit, by 1 June 2016, a special report to the Federal Tax Service providing information about fund movements and closing bank account balances, as at the reported date. Such kind of obligations for Russians is growing, following the newly approved amendments to Federal Law about currency regulation and currency control, which was enforced at the end of 2015.
The reporting form is made of two pages. The first one records the information of the declarant and the second one records the information relating to the bank account balances and movements. For individuals who own more than one account abroad, the second page needs to be filled in for each account they have. Upon receipt and review of the form, the Federal Tax Service might request further explanations, information or evidence, confirming for example particular fund movements. In such case, the taxpayer is obliged to submit the requested information within a week.
Some experts have voiced their concerns about such a tight deadline. Often, information for transactions are received from the banks via emails. Failing to meet the reporting requirements can result in rather serious consequences. Profits include interest income, rental payments, proceeds from sales of securities, etc.
Starting from 2016, profit tax must be paid on the interest accrued on account balances. However, the taxpayer should submit their tax declaration to the Federal Tax Service of Russia confirming the amount of tax paid to the foreign country. The recent declaration campaign concluded on 30 April 2016 with declarants submitting 3-NDFL form to the Federal Tax Service. In order to avoid trouble or tax claims for previous years, taxpayers shall submit a special declaration before 1 July 2016, indicating the balance of the bank account held abroad. The declaration can be amended, if necessary, to provide the date of account opening. Most Russian citizens are not just Russian tax residents, but also currency residents. The definition of currency resident first appeared in 2012, right after the Federal Law about currency controls and currency regulation was approved by the Russian government.
