Russian oligarchs seized the chance to hide accounts

2021-03-08

Putin’s gift for the Russian rich

About 260 of the richest Russians did not miss the opportunity to switch to a special tax regime for shareholders of foreign companies, introduced in 2020 by Russian President Vladimir Putin, LENTA.RU reports, citing VTimes and data from the Federal Tax Service (FTS). The tax innovation has been dubbed “a gift for the included in the Forbes list” and “an indulgence for the rich bought for little money”.

Alisher Usmanov thanks Vladimir Putin

The new procedure applies to the taxation of controlled foreign companies (CFCs). These include those foreign companies in which Russian residents own at least 25%. If previously the owners of CFCs with an annual profit of more than 10 million rubles (about $135,000) had to pay from 13 to 20 percent of their share of the profit, now they can pay only 5 million rubles ($67,000) in year and not to disclose the financial statements.

Such a scheme is beneficial to persons whose income starts from 40 million rubles and who holds at least 10 million US dollars in a CFC with an expected return of 5%. According to experts, such CFCs are in the majority.

On the one hand, we once again witness the relentless concern of the Russian state for its bosses, the big capitalists. And this concern brings tangible results to Russian oligarchs. “Indicators of their effectiveness” are growing at an enviable rate, which cannot be said about the rest of the population of the country.

On the other hand, there is no unity within the ruling class. The capitalists who are closest to the feeding trough do not want to let anyone else near it. They have to closely monitor their competitors. Thus, a VTimes source among federal officials explained that the main purpose of the CFC legislation was not to collect taxes from them, but to obtain information about the business structures.

At the same time working people have nothing to hide. They, with their miserable salaries, will not sneak away from the vigilant tax authorities. And no matter how hard they work, they won’t get more money in their pockets unless they wage a constant collective struggle for their rights.