Legal Regulation of Re-Domiciliation in the Russian Federation

In summer 2020, the Russian Federation initiated amendments to agreements on double taxation avoidance concluded with foreign States. The President of the Russian Federation outlined the goal of this procedure, namely: to ensure the collection of tax on dividends and other payments in the amount of at least 15%. It is extremely curious that the change in such tax agreements correlates with the legal institution of the re-domiciliation of foreign companies to the Russian jurisdiction (to special administrative regions on the Oktyabrsky and Russian Islands). New provisions of agreements on the avoidance of double taxation in conjunction with the re-domiciliation procedure, as well as the existing mechanism for voluntary declaration of accounts and assets, can potentially bring the fight against offshorization of the domestic economy to a new level.

The aim of the study is to compare the financial and other operating conditions of an international company registered in the order of re-domiciliation in a Russian special administrative region and an organization registered in a “low-tax” (offshore) jurisdiction. To achieve this goal, analytical and comparative legal research methods were used, which made it possible to draw the following conclusions: in the changing circumstances, the Russian special administrative regions are approaching in terms of the conditions for carrying out commercial activities and the volume of financial preferences provided to traditional offshore jurisdictions. However, in order to activate the process of re-domiciliation of foreign companies to the Oktyabrsky and Russky Islands, it is necessary to eliminate the shortcomings of legal regulation by amending the existing regulatory legal acts.

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