Putin proposed a flat tax for Russian owners of foreign companies

Russian President Vladimir Putin in an address to the citizens of the country asked the government to simplify the taxation of Russians who control the company abroad, and introduce for them a fixed tax of 5 million rubles a year.

“we Have a lot of entrepreneurs who develop their business not only domestically, but also abroad,” — said Putin. They need to provide “convenient and civilized to pay taxes at home, in Russia.”

As explained by the head of the state, now citizens of the country can be a Russian tax resident (paying taxes in the country), but from owning foreign assets. In this situation, they now pay tax on the income received from the activities of controlled foreign companies on complex and cumbersome scheme.

“Offer it to radically simplify, to grant the right to pay a fixed tax amount is 5 million rubles a year – with no additional reporting.”

This measure will accelerate “the development of a modern, responsible business, and it is in Russian jurisdiction,” — said the Russian President.

Earlier Vladimir Putin has proposed to raise the tax rate on dividends, which the Russian physical persons bring to their foreign accounts. All payments of income, interest and dividends, stretching back to offshore, will be subject to an additional tax: the rate rises from 2% to 15%.

the Sum of private financial wealth of the citizens of Russia have increased since 1999, 16 times, to $1.6 trillion. About 90% of the country’s GDP in 2019, estimated by the Boston Consulting Group. Of this amount, $500 billion abroad and $1.1 trillion in Russia.