On 9 March 2022, the Russian President signed the Law* on the fourth stage of the capital amnesty. According to the Law, under the fourth stage, individuals will be able to submit, between 14 March 2022 and 28 February 2023, a special declaration reflecting assets subject to legalisation. The amnesty will apply to acts committed before 1 January 2022.
Capital amnesty is the voluntary declaration by individuals of their foreign accounts, real estate, securities and other property held abroad. It involves the transfer of declared property to Russia without criminal, administrative and tax liability when the relevant violations are related to the declared property and accounts.
Under the first three stages, which took place in 2015, 2017 and 2019, individuals were entitled to submit information to the Federal Tax Service on land and other immovable property, vehicles, securities (including shares), as well as participatory interests and equity stakes in organisations, controlled foreign companies and bank accounts located outside Russia that had not been declared before.
In contrast to the previous stages, individuals will also be able to declare cash. Also, the wording “securities” has been replaced by “financial assets”, allowing not only shares and bonds, but also derivative financial instruments (e.g. futures, options, etc.), to be declared in the fourth stage. The list of supporting documents to be attached to the special declaration has been supplemented.
In relation to cash, guarantees will be given provided that the declarant deposits the cash specified in the declaration into current or savings accounts with Russian banks within 30 days from the date of submission of the declaration to the tax authority.
The Law does not clarify how cash deposits into bank accounts will be confirmed. It is also unclear whether cash flow statements on foreign accounts will be audited and whether it is necessary to have documents to prove the transactions reflected in them. In this regard, we will follow further developments in this area and keep you informed of new clarifications.
Those who participated in the previous stages of the capital amnesty can also participate in the fourth stage. However, the Law does not provide for repeat declarations within a single stage (i.e. a declaration can be submitted only once). As a result, it is important to analyse all assets and assess the possibility of declaring, guarantees and risks.
The CMS Russia team is ready to assist in this field by notably:
- carrying out an asset analysis to assess the feasibility of participating in the capital amnesty (including whether it is possible to file a declaration, consequences, benefits of obtaining guarantees and potential risks);
- preparing a special declaration and reports for previous periods (i.e. ODDS, 3-NDFL);
- assisting with the preparation of a set of supporting documents;
- assisting with filing returns to the tax authorities.
* In Russian