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New Grounds for Field Tax Inspections of Individuals

DATE: March 22, 2021 | AUTHOR: secretary2

Since 2017, the Federal Tax Service (FTS) has been receiving data on foreign accounts of Russians, as well as on assets owned by them in foreign companies and structures, as part of the automatic exchange of financial information.
The data obtained is analyzed by the tax authorities to identify signs of tax evasion by taxpayers – primarily personal income tax on income abroad or concealment of income of controlled foreign companies (CFCs). If these are detected, a decision may be made to conduct an on-site tax audit in respect of the taxpayer (including an individual).
Since an on-site tax audit can be carried out for a period not exceeding three calendar years, the tax authorities initiated on-site audits in 2020 based on information for 2017. We can expect audits to be scheduled this year based on information for 2018 (when more than 70 foreign countries and territories were already exchanging information with Russia).
Taxpayers who have accounts in foreign banks and/or foreign companies and structures should note that banks are preparing data for automatic exchange by April of this year for the previous year. At the beginning of the current year, the client may request the bank to analyze and amend the data package relating to him. There is also a procedure for appealing the bank’s customer qualification under the CRS.
Below is a list of states with which the automatic exchange of financial information has been established:

1. Australia
2. Andorra
3. Austria
4. Antigua and Barbuda
5. Azerbaijan
6. Argentina
7. Aruba
8. Bahamas
9. Barbados
10. Bahrain
11. Belize
12. Belgium
13. Bulgaria
14. Brazil
15. Vanuatu
16. Hungary
17. Ghana
18. Germany
19. Grenada
20. Greece
21. Denmark
22. Dominica
23. Israel
24. India
25. Indonesia
26. Ireland
27. Iceland
28. Spain
29. Italy
30. Qatar
31. Cyprus
32. China
33. Colombia
34. Republic of Korea
35. Costa Rica
36. Kuwait
37. Latvia
38. Lebanon
39. Liechtenstein
40. Luxembourg
41. Mauritius
42. Marshall Islands
43. Malaysia
44. Malta
45. Mexico
46. Monaco
47. Nauru
48. Nigeria
49. Netherlands
50. New Zealand
51. Norway
52. United Arab Emirates
53. Pakistan
54. Panama
55. Poland
56. Portugal

57. Romania
58. Samoa
59. San Marino
60. Saudi Arabia
61. Seychelles
62. Saint Vincent and the Grenadines
63. Saint Lucia
64. Saint Kitts and Nevis
65. Singapore
66. Slovakia
67. Slovenia
68. Turkey
69. Uruguay
70. Finland
71. France
72. Croatia
73. Czech Republic
74. Chile
75. Switzerland
76. Sweden
77. Estonia
78. South Africa
79. Japan

Territories:

1. Bermuda
2. British Virgin Islands
3. Gibraltar
4. Hong Kong
5. Greenland
6. Curacao
7. Macau
8. Montserrat
9. Cayman Islands
10. Cook Islands
11. Turks and Caicos Islands
12. Faroe Islands

Posted in Firm News News Newsletter

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