Customary settlement routes with some foreign counterparties are no longer available. Many companies have begun to engage payment agents. Maria Kabanova, Counsel of the Tax Practice of SEAMLESS Legal, explained what risks should be taken into account in this process due to various issues in the area of legal regulation. In the article, the expert analysed the peculiarities of tax, customs and currency control regulations.
Payment agents are intermediaries who help businesses organise settlements with foreign partners when direct payments are impeded due to sanctions or complicated banking conditions. Thanks to this, entrepreneurs do not lose contracts and continue to work on the international market. However, certain risks may arise.
It is important to consider whether the payment agent is a Russian or foreign person. This significantly affects the tax liabilities of the business. In addition, the fact that payment agents will be involved in the transaction should be stated in the foreign trade contract. If this is not done for currency control purposes, such agents will not be considered parties to the transaction and they will not have the right to receive funds, which may lead to the application of material fines for violation of currency control legislation. This was pointed out by the Supreme Court in the Review of judicial practice on certain issues of application of Article 15.25 of the Code of the Russian Federation on Administrative Offences, approved by the Presidium of the Supreme Court on 26.06.2024.
It is important to note that the position of supervisory authorities on a number of issues related to the use of payment agents is still developing. This primarily concerns the inclusion of agent's remuneration in the customs value of goods. In this article, we will consider these aspects in more detail and analyse tax issues and risks associated with currency control compliance.
Authors:
Maria Kabanova, Counsel
Co-authored by Viktoria Tikhonova, Paralegal in Tax.
The publication is also available in Russian.
Initially published in Corporate Counsel Magazine.