PROBLEMS OF LEGAL REGULATION OF CONTROLLED FOREIGN COMPANIES IN THE RUSSIAN FEDERATION

The article analyzes the concept of a controlled foreign company, obligations of a controlling person, the history of formation and development of legal regulation of controlled foreign companies abroad and in the Russian Federation. The aim of the research is to analyze the provisions of Russian legislation related to the legal regulation of controlled foreign companies, as well as to identify positive and negative aspects for controlling persons in the light of the recent changes in legislation on taxes and fees, which came into force since 2021 in the Russian Federation. Conclusions. The issue of recognition of a foreign company as a tax resident of the Russian Federation is a cornerstone in law enforcement practice, which is currently not in favor of the tax authorities. In our opinion, in order to clarify the procedure for recognizing a foreign company as a tax resident of the RF in connection with its management from the territory of the RF, it is necessary to provide for additional criteria in the Tax Code of the RF. In particular, it is necessary to fix in the Tax Code a provision, in accordance with which the heads of a foreign company must have Russian citizenship and their activity should be carried out mainly on the territory of the Russian Federation. The legislative provision concerning the submission of financial statements for controlled foreign companies (hereinafter referred to as «CFC») incorporated in the territory of the EAEU also needs to be regulated in more detail. In practice, situations arise where tax authorities interpret the provisions of tax legislation on this issue at their own discretion. In addition, there are different approaches to this issue in the explanations of the Russian Ministry of Finance and the Russian Federal Tax Service. Thus, the Russian Ministry of Finance takes the position that controlling persons have no obligation to submit financial statements, while the Russian Federal Tax Service states that it is the duty of the controlling person to submit statements. In our opinion, the controlling persons of CFCs registered in the territory of the EEU can be exempted from this obligation, because the profits of such companies are exempt from taxation3. Financial statements are required only to determine whether a taxpayer exceeds or does not exceed the thresholds established by the Tax Code of the Russian Federation. We consider it necessary to supplement Article 129.6 of the Tax Code with an indication of extenuating circumstances, which has been worked out by court practice. Thus, among these circumstances may be provided for reduction of the penalty for failure to submit a CFC notification on time if the taxpayer had no intent to commit an offense, the taxpayer's admission of guilt, insignificant time of delay, no damage to the budget, for example, if the CFC's profit does not exceed threshold values. In our opinion, taking into account these circumstances will meet the principles of proportionality and fairness of punishment. The introduction of a fixed tax on CFC profits has both positive and negative consequences for taxpayers who are entitled to apply it. Among the positive aspects is the fact that the controlling person is exempted from the obligation to submit financial statements to the RF tax authorities. In addition, in terms of tax planning a fixed tax may be useful for those controlling persons whose amount of profit of the CFC is much more than 10 million rubles4. Among the negative aspects is the fact that the tax authorities have the right to request reporting after the deadline for payment of the tax in the fixed amount from the profit of the CFC. It should be emphasized that the tax on the fixed profit of CFCs is calculated and paid regardless of the financial results of the company. It is also worth noting that the taxpayer has no right to offset losses from previous years. In addition, when paying tax on the fixed profit of a CFC, the controlling person will not be able to offset taxes paid outside the territory of the Russian Federation.

controlled foreign companies, controlled foreign structures, controlling person, duties of controlling persons, financial reporting, OECD, Beeps plan, EAEC