TASS

05 April 2016

Panama Papers will make the Russians refuse from "trash" offshores. The global trend to discredit such jurisdictions will also contribute to the success of deoffshorization programme conducted by Ministry of Finance.
Khrenov & Partners lawyer Alexander Kostin commented on prospects for the Russians and their offshores after publication of Panama Papers.

"The engagement of foreign companies to form holding structure is widely accepted in international practice, however not all of holding companies are offshore companies, since some of them are registered in the jurisdictions which provide adequate fiscal control and exchange of information with Russian Federation (Cyprus, the Netherlands, Luxembourg)", - explains the lawyer of "Khrenov and partners" Alexander Kostin.

Russia started a large-scale program on deoffshorisation in 2014, offering business "the whip" (the CFC rules - a law requiring to disclose information about controlled foreign companies) and "carrot" (tax amnesty). The leak of information from offshore will stimulate the business to return to Russia, according to lawyers.

"The risk of such disclosure largely stimulates business owners to refuse from low-tax jurisdictions (or disclose information about them to the tax authorities)," - said Kostin.

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