Recently, the Russian lower house of parliament considering the Bill No. 442400-7, which includes various measures.
The Bill includes following measures:
1. Adjust the CFC rules so that a person will not be recognized as a controlling person of a foreign organization if their participation in the foreign organization is realized exclusively: (a) through direct and/or indirect participation in one or several public (listed) companies that are Russian organizations; or (b) through direct and/or indirect participation in other foreign organizations whose shares are traded on one or more foreign exchanges, located in an OECD member state, provided that:
– The share of direct and/or indirect participation in such other foreign organization does not exceed 50%; and
– The proportion of ordinary shares that are listed amounts to more than 25% of the authorized capital of such other foreign organization.
2. Limit the penalty accrued on tax arrears to the amount of tax arrears, and provide that the penalty for tax arrears will not apply with respect to underpaid tax resulting from a corresponding adjustment of a controlled transaction, subject to conditions; and
3. Provide that funds received free of charge from a subsidiary will be excluded from the tax base as long as the amount is within the amount of contribution made to the subsidiary.
The Bill must be approved by the Federation Council and signed by the president before entering into force.
