The expert does not expect mass transfer of business to "Russian offshore".
The proposed by the Ministry of Finance dividend tax reduction for non-public international companies registered in the so-called "Russian off-shore" - Special Administrative Regions (SAR) will be an additional incentive to transfer business to the Russian jurisdiction, but it will not become mass, said lawyer and managing partner of Tax Compliance Mikhail Begunov to RIA Novosti.
The RF Ministry of Finance has previously published a draft amendment to the Tax Code, which establishes tax benefits for non-public international holding companies - ATS residents: the tax rate on dividends for them is proposed to be reduced from 15% to 5%. There are two such areas in Russia: Oktyabrsky Island in Kaliningrad Region and Russky Island in Primorsky Krai. At present, only public companies have this privilege in these areas.
"On the one hand, this is really an additional incentive to transfer foreign companies to the Russian jurisdiction, as some tax rates in Russia are lower than in other countries. Thus, the rate of 5% on dividends for foreign companies registered in Russia and registered in the ATS, will help offset the cost of transferring dividends and interest if the companies are registered in jurisdictions where the double tax treaty raised the rate on such payments to 15%," - said Begunov.
"On the other hand, one should hardly expect the mass transfer of companies to Russia, for which there are certain reasons. They mainly concern the uncertainty of the Russian tax policy, administrative pressure on business and shortcomings of the national judicial system. Accordingly, business may choose other jurisdictions, not even with such favorable conditions, but with a more reliable business policy: Switzerland, Great Britain and so on," he added.
In late March, Russian President Vladimir Putin instructed to tax 15% of dividend and interest income transferred to accounts abroad. This requires adjustment of double tax treaties with other countries. The RF Ministry of Finance has already agreed to increase tax with Cyprus and Malta, similar proposals have been sent to Luxembourg and the Netherlands. Russian Deputy Prime Minister Alexey Overchuk said that proposals on revision of tax agreements may be sent to Switzerland and Hong Kong.