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The Exchange of Tax Information Portal is an initiative of the Global Forum on Transparency and Exchange of Information for Tax Purposes. The Global Forum conducts peer reviews of its member jurisdictions' ability to co-operate with other tax administrations in accordance with the internationally agreed standard. The standard provides for exchange of information on request where it is foreseeably relevant to the administration and enforcement of the domestic tax laws of the requesting jurisdiction. Effective exchange of information requires that jurisdictions ensure information is available, that it can be obtained by the tax authorities and that there are mechanisms in place allowing for the exchange of that information. The Global Forum's peer review process examines both the legal and regulatory aspects of exchange (Phase 1 reviews) and the exchange of information in practice (Phase 2). The EOI Portal will track the development of these peer reviews, including changes that jurisdictions make in response to the Global Forum's recommendations.

Peer Review: Russia Phase 2

This report for Russian Federation has been published on 29 Oct 2014. You can buy this report, or browse it online below.

Skip directly to the Executive Summary. You may also want to view the tables of determinations and ratings.


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Determinations and Recommendations

Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities. (ToR A.1)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   There is no clear obligation for ownership and identity information to be kept on foreign entities, including foreign companies which have a sufficient nexus with Russia and foreign partnerships which are carrying on business in Russia, or have income, credits or deductions for tax purposes in Russia.  Russia should ensure that an obligation is established to ensure that up to date ownership and identity information is kept for relevant foreign entities, including companies and partnerships. 
Russian law does not ensure that information is available to identify the settlors, trustees and beneficiaries of foreign trusts with a Russian trustee or where the trust is administered in Russia. Certain AML Service Providers may in some cases be required to keep information on trust beneficiaries where they are engaged in respect to a trust’s activities.  Russia should ensure that information identifying the settlors, trustees and beneficiaries of foreign trusts, which are administered in Russia or in respect of which a trustee is resident in Russia, is available to its competent authority in all cases.  
Phase 2 Rating Factors Recommendations
Largely Compliant.      
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements. (ToR A.2)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.      
Banking information should be available for all account-holders. (ToR A.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Largely Compliant.   A clear obligation that prohibits credit institutions to maintain anonymous accounts is only in force since 28 June 2013, and the transitional provisions are not defined in the law.  Russia should monitor the practical implementation including the enforcement of the recently introduced prohibition on credit institutions to maintain anonymous accounts.  
It is unclear what oversight and enforcement there is of banks’ obligations to maintain relevant information.   Russia should ensure that banks’ obligations to maintain relevant information is subject to adequate enforcement and oversight.  
Competent authorities should have the power to obtain and provide information that is the subject of a request under an exchange of information arrangement from any person within their territorial jurisdiction who is in possession or control of such information (irrespective of any legal obligation on such person to maintain the secrecy of the information). (ToR B.1)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   The scope of information protected by Russia’s domestic law confidentiality duty for “audit secrets” is broad, and there is no exception which would permit access to such information for EOI purposes.   Russia should ensure that access for EOI purposes is possible for all relevant information which would otherwise be protected by the domestic law on “audit secrets”.  
Phase 2 Rating Factors Recommendations
Partially Compliant.   Russian authorities did not have access powers to obtain bank information with respect to bank accounts of private individuals until the end of 2012. During the review period this has been the case in around 20 requests. In the vast majority of these cases this type of bank information was not obtained. Furthermore, there remains uncertainty whether the Russian Competent Authority is allowed to obtain and exchange transactional information regarding a private individuals’ accounts prior to the entry into force of the 2012 amendment or, in case of a request regarding a private individuals’ accounts that was made before 1 July 2014, where there was no provision in the EOI agreement equivalent to article 26(5) of the Model Tax Convention   Russia should monitor the practical implementation of the recently introduced powers to obtain bank information with respect to accounts of private individuals. 
Information on private individuals’ pensions was not obtained due to Russia’s restricted interpretation that this this type of information kept by pension funds can be accessed only with the consent of the individual.  Russia should ensure that information on private individuals’ pensions kept by pension funds can be or is accessed and exchanged in accordance with its obligation to exchange information under its EOI agreements. 
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the requested jurisdiction should be compatible with effective exchange of information. (ToR B.2)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.      
Exchange of information mechanisms should provide for effective exchange of information. (ToR C.1)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   Russia interprets the EOI provisions in DTCs relating to 11 of its EOI partners to limit information exchange to instances where the information relates to a person resident in one of the Contracting States. Under the DTC with one partner, information exchange is limited to information necessary for the carrying out the provisions of the Convention. An amending protocol which will remove this limitation is ready to be signed.   Russia should ensure that all of its EOI agreements permit the exchange of information relevant to all persons and also permit exchange for the purposes of administration and enforcement of the parties’ domestic laws, in line with the international standard. 
Four of Russia’s signed DTCs and the Multilateral Convention on Mutual Administrative Assistance have not been brought into force by Russia.   Russia should ensure that it takes all steps necessary for its part to bring its signed EOI agreements into force expeditiously.  
Phase 2 Rating Factors Recommendations
Largely Compliant.      
   
The jurisdictions' network of information exchange mechanisms should cover all relevant partners. (ToR C.2)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   Russia has signed 87 double tax conventions which provide for the exchange of information, of which 83 are in force, with 57 being in force and in line with the standard. It has also signed the Multilateral Convention on Mutual Administrative Assistance.  Russia should take steps to ensure that it is able to give full effect to its network of EOI agreements in line with the international standard. 
Russia has been approached by at least two jurisdictions to negotiate a TIEA. In 2014 both jurisdictions are covered by the Multilateral Convention.  Russia should continue to develop its network of EOI mechanisms (regardless of their form) with all relevant partners, meaning those partners who are interested in entering into an information exchange arrangement with it. 
Phase 2 Rating Factors Recommendations
Largely Compliant.      
   
The jurisdictions' mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received. (ToR C.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.      
The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties. (ToR C.4)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   The scope of information protected by Russia’s domestic law confidentiality duty for “audit secrets” is broad, and there is no exception which would permit access for the purposes of exchange under Russia’s EOI agreements.  Russia should ensure that information which would otherwise be protected by the domestic law on “audit secrecy” can be accessed and exchanged in accordance with its obligation to exchange information under its EOI agreements. 
Phase 2 Rating Factors Recommendations
Largely Compliant.      
The jurisdiction should provide information under its network of agreements in a timely manner. (ToR C.5)
Determination Factors Recommendations
The assessment team is not in a position to evaluate whether this element is in place, as it involves issues of practice that are dealt with in the Phase 2 review.      
Phase 2 Rating Factors Recommendations
Compliant.   In a number of cases, Russia has not provided status updates within the 90 day period.  Russia should provide status updates to its EOI partners within 90 days where relevant.