Currency Resident: Concept in Russian Legislation

With a view to tightening foreign exchange control, legislative acts have been amended. In particular, they concern the definition of the term "currency resident". From its correct interpretation, taxation of citizens' incomes largely depends.

The concept of

The term "resident" is presented in the legislation not only with respect to tax, but also currency control. The new law "On Currency Residents" (edition of 2012) provides that persons who left the country for more than a year ago and who no longer appeared in Russia are not citizens of the Russian Federation. It does not matter what kind of visa a person has: student, tourist or giving the right to visit relatives. The normative acts refer to a "permanent" or "temporary" stay in another country, but none of them speak of "continuity". That is, citizens of the Russian Federation living in another country, which at least one day a year will come to their homeland, will lose the status of a non-resident. But some lawyers believe that you need to pay attention to the fact of registration at the place of residence. When a person migrates to another country, he is discharged from housing in the Russian Federation. It is difficult to track his short visits to his homeland.

The concept of "currency resident" was introduced in the legislation and earlier. Then it was no less intricate. In particular, this category of citizens could include all persons with open long-term visas in the passport, even if they have never used them.

Who is the currency resident of the Russian Federation :

• Persons who have a residence permit in Russia;
• Legal entities registered in the Russian Federation;
• Municipal subjects of the Russian Federation.

The turmoil around the interpretation of this term is not accidental. The number of duties of citizens of the Russian Federation increases every year.

Resident Responsibilities

1. Notify about the opening and closing of the account in foreign banks. For violation of the requirements there is a fine of five thousand rubles.
2. Do not allow the receipt of amounts from illegal transactions, in particular, income from the sale of property. For violation of the requirement, the foreign currency resident is obliged to pay a fine in the amount of 75% of the transaction volume.
3. Since 2015, individuals are required to provide annual reports (before June 1) on the flow of funds. For a primary violation of the envisaged procedure, a fine of 3,000 rubles is provided, and for a second violation, 20,000 rubles.

How to report

The report can be made in hard copy and sent directly to the FTS or sent through a personal account on the taxpayer's website. The first sheet contains information about the applicant, and on the second - on the currency account. Each account is provided with a separate copy of the second sheet. The Federal Tax Service within its authority may request additional documents confirming the operation. They are given a week for their preparation. In particular, they can request:

• The report on the flow of funds on the account (it is better to ask in advance in the bank) is also accepted in electronic form.

• Notarized copies of documents from the bank and their certified translation into Russian.
• Declarations, passports of transactions and contracts, on which the tax can request information.

After providing a report on any income, a foreign currency resident must pay personal income tax. Legislation provides for taxation of dividends (13% and 15% for residents and non-residents respectively), incomes from operations with the Central Bank:

• 13% for individuals. Resident individuals (30% for non-residents);
• 20% for legal entities. Persons - (non) residents.

In order to avoid double legislation, Russia has concluded agreements with 80 countries of the world. For some types of income, a resident can pay taxes only in the host country. For example, if a taxpayer paid a tax on rental income at a rate of more than 13% in the host country, no payment is necessary in Russia. But that the Federal Tax Service does not have any questions, it is better to provide a copy of the foreign tax return and payment documents. If the management of real estate deals with a trustee, then the certificate must be obtained from him, since in this situation he is a tax agent.

The appearance with the guilty

Avoid claims for payment of fees for previous years, with the help of an amnesty of capital - to file a special declaration by July 1, indicating the account balance and attaching notice of its opening.

The amnesty of capital also extends to illegal operations. On the foreign account it is possible to transfer the salary, business trips, social payments. In OECD and FATF countries, crediting of loans in foreign currency, income from leasing property, coupon income is also allowed. However, it is prohibited to transfer grants and income from the sale of property. For violation of this requirement, a fine of 75% of the transaction amount is threatened. In practice, it looks like this. If the foreign account received income of $ 100 from the implementation of the Central Bank, then $ 75 will be sent to pay off the fine. But if you have time to file a special decree before June 1, then responsibility can be avoided.

Administrative Responsibility

A foreign currency resident (non-resident) is liable only for those offenses against which his fault is established (Article 1.5 of the Code of Administrative Offenses). In this case, the decision on the offense can be made after 2-3 months from the day it was committed. Within the framework of the case before the court, the terms of responsibility have been increased to two years.

If the FTS independently learns about the availability of a currency account, the resident will be fined in the amount of 5 thousand rubles. If he reports immediately after deadline, that is, on June 1, the amount will be reduced exactly 5 times.

If the foreign currency resident has not managed to submit the report after receiving the request, the fine will be 300 rubles (if there is a delay of ten days) and 2.5 thousand rubles. (With a delay for a longer period). For a second violation there is a fine of 20 thousand rubles.

If the foreign currency resident has not informed about the opening of the account, but will constantly receive income from it, then this is regarded as tax evasion. The FTS will still be obliged to pay fees and impose a fine in the amount of 100-300 thousand rubles.

Checking

How does the FNS learn that a foreign currency resident (an individual) has a foreign account? So far only from the taxpayer. Since 2018, the Russian Federation is joining the automatic system for the exchange of information on tax issues. Therefore, the authorities of the Federal Tax Service will find out information in a timely manner.

There are situations when a foreign currency resident is interested in informing the Federal Tax Service about opening an account. For example, to transfer funds from your account in the Russian Federation to a foreign bank, you need to provide a notice to the Federal Tax Service to open one with a note of acceptance of the document. This is a mandatory requirement for all customers. Wishing to bypass it, citizens transfer funds to the accounts of third parties. But the legislation of some countries allows only the receipt of funds to their account with the confirmation of the origin of money.

Citizens who previously informed about foreign accounts were also included in the risk zone, until 2015 they were not closed and no information was provided on time. With respect to such persons, a case of an administrative offense may be initiated with a fine of 10,000 rubles. And a ban on leaving the territory of the Russian Federation.

Salary in a foreign company

You can get a salary abroad. At the same time it is desirable to be absent from the Motherland more than 183 days a year. In this case, a person is removed from registration in the Russian Federation. It is not necessary to talk about currency residence. Short-term visits do not oblige. Require registration at the customs can only when traveling for a period of 90 days. In other cases, it is not necessary to report on foreign accounts.

Trading in securities

Only in OECD and FATF countries can the account be credited with coupon, interest income on transactions with the Central Bank, payments on bonds, income from trust management. All these transactions are taxed at a rate of 13%. The tax is also charged on exchange rate differences. Therefore, the tax rate is calculated based on the converted amount.

Since 2018, the changes concerning the crediting of the proceeds from the sale of securities to the account should come into effect. To date, such transactions are prohibited on accounts opened in any country in the world. It is also worth noting that repayment of bonds is not a sale of securities. Currency restrictions do not apply to such transactions .

Useful resources

First, residents must necessarily create a personal cabinet on the site of the Federal Tax Service. Then all issues with fiscal authorities can be resolved without coming to Russia.

Will track arrears on administrative fines can be on the website of the "Federal Bailiffs Service".

Sometimes it is better to cancel the status of a currency resident and withdraw from the register than to argue with the bodies of the Federal Tax Service.

Conclusion

Currency legislation is designed in such a way that people do not have a desire to export capital abroad. Standard currency transactions between residents can be conducted without additional red tape, and transferring funds to your own account in another country can cause a lot of difficulties. It is better to break the reporting period than to ignore this requirement altogether. The Federal Tax Service will sooner or later find out about the existence of an account. And then there will be additional taxes and a huge amount of fine is exposed.