The need to generate a notice of participation in foreign organizations appeared relatively recently - since January 2015. For a number of persons, this document is mandatory, while its compilation takes place according to a certain form of C-IO.
FILES
Who is required to notify
This document must be submitted:
- citizens of Russia;
- persons with dual citizenship;
- those who do not have citizenship at all;
- enterprises and organizations.
In addition, the obligation to form the document also lies with some foreign companies, including those that have divisions and branches within the Russian Federation and are considered, respectively, the taxpayers of our country.
The reason for filing a notification is both joining a foreign organization and leaving it. When "reformatting" the shares, the regulatory authorities should also be notified about this.
Where and when to submit the document
The notification is submitted to the local territorial office of the tax service, no later than thirty days (according to the calendar) from the date of "entry", change of share or "exit" from a foreign organization.
Refusal to accept a document
Sometimes tax authorities may refuse to accept submitted documents. Notification of participation in foreign organizations in this case is no exception. True, the list of reasons for refusal is not so long:
- incorrectly completed form;
- failure to provide original supporting documents;
- poor copy quality.
To correct the situation, you need to correct all the shortcomings and apply again.
What if you don't give notice?
Failure to fulfill the obligation to transmit a notice of participation in foreign organizations can lead to serious consequences in the form of a rather large fine (up to several tens of thousands of rubles).
At the same time, it should be remembered that the deliberate concealment of this fact will also not end in anything good, since today the tax authorities have access to various sources of information (including assisting with the tax authorities of other states in terms of information exchange).
Rules for filling out a notice
If you need to generate and send to tax office notification of participation in foreign organizations, we recommend that you use the tips below and see a sample of filling out the document.
To begin with, we recall that the notification form has a unified form and it is mandatory for use.
- You can enter information into the form either by hand (but only with a blue, black or purple ballpoint pen) or in printed form on a computer.
- Words must be written in large capital letters, legibly, so that it is readable and understandable.
- Make mistakes in the form, do not make blots. If an oversight nevertheless happened, you should not correct it, it is better to fill out another form. And, of course, it is forbidden to indicate deliberately false information in the notification - if such facts are discovered, the consequences can be the most unpleasant.
If, after the notification has been sent, the taxpayer suddenly discovers that there was some inaccuracy in it, he has the right to submit an updated notification - there are no sanctions for this, the main thing is to meet the deadlines.
Sample filling out a notice of participation in foreign organizations
Filling out the first sheet
On the first page at the top of the notice, information about the taxpayer is entered: details of the company, its full name (with a deciphered organizational and legal status). It also indicates the number of the adjustment, the code of the tax authority and the code of the taxpayer, the reason for the formation of the document.
The bottom of the page is divided into two sections. In the left one, you first need to indicate the notifier's code (the transcript is given immediately), then enter his personal and contact details, sign and fill out the date.
Filling out the second sheet
The second page of the notification is filled out if the speech is conducted on behalf of an individual. At the same time, as mentioned above, it does not matter whether he is a citizen only Russian Federation, has dual citizenship or none at all. All information entered here must correspond to a passport or other identity document. If the notifier leaves this page blank, he must still put his signature and date under it (the same applies to other pages of the document).
Filling out the third sheet
The third page contains information about the foreign organization in question. First, you need to enter its name here, both in Russian and English.
The country code, company registration number and address of its actual location, other known data are entered below. Then it should be noted how the notifier is related to the organization: directly, indirectly, or both, the date, month, year of occurrence of participation, share and end date (the latter - if the document is submitted in connection with the withdrawal from the organization).
Filling out the fourth sheet
The fourth page includes information about a Russian company that is a member of a foreign organization. The information entered here must be identical to the constituent papers of the company.
Filling out the fifth sheet
Data on participation in a foreign structure without the formation of a legal entity are entered on the fifth page. person (i.e. partnership, foundation, trust, partnership, etc.).
Completing the sixth sheet
The sixth page indicates the status of a participant in a foreign structure without the formation of a legal entity. person (i.e. who is the applicant: the founder of such a company, the recipient of income or a controlling entity).
Completing the seventh sheet
Finally, the last - the seventh page - reveals the procedure for the notifier's indirect participation in a foreign company: all links of the chain, which includes a foreign organization, in which, in turn, the notifier participates, are indicated here, as well as the serial number of his participation and his share.
How to send a notification
For sending to tax service Notifications can be used in one of several ways:
- The most reliable and simple is to take the completed form to the tax office in person and transfer it from hand to hand to a specialist.
- You can forward the notification with a representative, provided, of course, that he will have a power of attorney certified by a notary.
- And one more way: send the document by registered mail with acknowledgment of receipt via regular mail - this will take more time, but it guarantees that the notification will be received by the tax authorities.
Entered into force the federal law“On Amendments to Parts One and Two of the Tax Code of the Russian Federation (Regarding Taxation of Profits of Controlled Foreign Companies and Income of Foreign Organizations)” dated November 24, 2014 No. 376-FZ. At the stage of its development and discussion, the law was unofficially called the “anti-offshore bill”, “de-offshorization law” or “controlled foreign companies (CFC) law”.
According to the amendments made to the Tax Code (Chapter 3.4, Article 25.14), taxpayers recognized as tax residents of the Russian Federation are required to notify the tax authorities of:
- On its participation in foreign organizations (if the share of such participation exceeds 10%), on the establishment of foreign structures without education legal entity.
Must be submitted on time no later than 3 months from the date of occurrence or change of the share participation in such an organization. - About controlled foreign companies of which you are the controlling person.
Notice of controlled foreign companies must be submitted by the due date not later than March 20 of the year following the tax period in which the profit share of the controlled foreign company is subject to accounting by the controlling person.
Thus, when establishing a foreign company, first a Notice of Participation is submitted, which discloses information about the owner, the procedure for owning the company and the share of participation, and then every year, by March 20, a Notice of CFC is submitted, which reflects information on the ownership order, and share of ownership, availability of financial statements of the company, auditor's report.
Example: An individual became a 100% shareholder of the company in the BVI on 02/01/2018.
- Within 3 months from 02/01/2018 to an individual it is necessary to submit the Notice of participation in a foreign company in the approved format to your territorial inspection.
- To prepare a notice, you will need corporate documents of the company.
- If the company's profit for 2018 was not distributed, and no decision was made to distribute such profit, then the profit of a controlled foreign company based on the results of 2018 is accounted for by an individual on December 31, 2019.
- Until 03/20/2020, an individual must submit a CFC Notice for 2019 for 2018 profits to their territorial inspection.
The following information is required to draw up the CFC Notice for 2019:- Company corporate documents
- Financial statements for the relevant year in accordance with IFRS (or in accordance with approved local reporting standards), if the company does not prepare statements in accordance with Chapter 25 of the Tax Code of the Russian Federation “Income Tax”
- Auditor's report on these financial statements
Our services:
- Consultations on the need to submit a notification - 8,000 rubles per hour.
- Notification of participation in a CFC (for one company) - 20,000 rubles.
- Notice of termination of participation in the CFC (for one company) - 20,000 rubles. If the Notice of participation in a CFC was issued through our company, then the cost is 10,000 rubles. for company.
- Notice of CFC - 25,000 rubles. for one company + 15,000 rubles. for an additional year for the same company.
- Filing a notification to the tax office (optional) - 2,000 rubles. + notarized power of attorney.
- Analysis of documents of a foreign company to establish the continuity of the chain of ownership, missing documents, errors in them, etc. (if necessary) - from 70,000 rubles.
Latest trends
In 2018-2019, more and more requests are received from the tax authorities of the city of Moscow regarding the provision of Notices of participation in a foreign company, as well as Notices of CFCs. But separate requests also appeared, in which the tax authorities are not limited to providing only notifications, but require the submission of CFC reporting, an audit report, and tax registers.
The tax authority in the Chelyabinsk region sends information letters CFC holders on the deadlines for submitting CFC Notifications. After the CFC Notices are submitted, the tax inspectorate requests reports with translation and explanations. All work of the tax inspector on the CFC is under the control of the regional Department of the Federal Tax Service of Russia for the subject. The inspector is in close contact with representatives of the Federal Tax Service and the declarant on the submitted reports. The Tax Inspectorate offered to declare the trust agreement as a foreign structure, but after providing written explanations, it abandoned its requirements.
Penalties for failure to notify
- In case of failure to submit a notification about a controlled foreign company or providing false information, the notification provides for a fine in the amount of 100 thousand rubles. (Clause 1, Article 129 of the Tax Code).
- Failure to submit a notice of participation or providing false information in the notice provides for a fine of 50 thousand rubles. (Clause 2, Article 129 of the Tax Code).
Our Russian company bought out more than 90% of the share in a foreign company (Republic of Kazakhstan) in December 2017. What should we do, is it necessary to notify our tax authorities about the share buyback, do tax returns, reports for the Russian tax office? What are our next steps?
Answer
A Russian company must submit tax authority notice of participation in a foreign organization (see recommendation below).
Guest, get acquainted -!
In the future, reporting and calculation of the effective and weighted average taxation rates for income (profit) of a foreign organization will be required.
The date of filing a notification with the tax authority in accordance with paragraph 3.1 of Article 23 of the Tax Code is calculated from the date of entry into force of the contract for the sale of shares or a share in the authorized capital of a foreign company ( ; ).
The procedure for calculating the profit of a foreign company for a controlling person - a Russian organization is established.
The rationale for this position is in the materials of the System Glavbukh.
Organizations and citizens who own more than 10 percent of shares in a foreign company, or who have established a foreign structure without forming a legal entity, must submit (subclause and clause 3.1 of article 23 of the Tax Code of the Russian Federation). This also applies to all controllers. and the electronic format of such a document are approved. The order of filling is also given there.
For more information on how to draw up a notice, where and when to file it, read this recommendation. Here you will find an example of filling.
Where to take
Notification of participation in foreign organizations is submitted to the tax office:
At the place of registration of the organization;
At the place of residence of the citizen, if filled out for an individual.
If an organization or individual recognized as tax residents of the Russian Federation controls a foreign organization that is not a tax resident of the Russian Federation, or a foreign structure without forming a legal entity, such a foreign organization (structure) is recognized as a controlled foreign company (CFC) (clauses 1, 2 of Art. 25.13 of the Tax Code of the Russian Federation).
What does it mean to control in order to recognize a CFC, is indicated in Art. 25.13 of the Tax Code of the Russian Federation. Control includes, for example, the ability to exert a decisive influence on decisions made by a foreign organization on the distribution of profits.
For example, the controlling person of a foreign organization is recognized as an organization whose share of participation in the “foreigner” is more than 25%, while such a share does not provide for exclusively direct or indirect participation through public Russian organizations.
The presence of a CFC in an organization or individual obliges them to notify the tax office of such “foreigners” (clause 3, clause 3.1, article 23 of the Tax Code of the Russian Federation).
CFC notification form 2018
The controlling organization submits a notification at its location, and an individual controlling a foreign company - at its place of residence (Clause 3.1, Article 23 of the Tax Code of the Russian Federation).
The above form of notification should not be confused with the Notification of participation in foreign organizations (on the establishment of foreign structures without forming a legal entity) (form according to KND 1120411) (approved by Order of the Federal Tax Service dated 04.24.2015 No. ММВ-7-14 / [email protected]).
Organizations must submit a CFC Notice in electronic form, and individuals can choose to submit it electronically or on paper (clause 4, article 25.14 of the Tax Code of the Russian Federation).
CFC notice: due date
When to file a CFC notification? Do I need to file a CFC notice annually?
A notification of a CFC must be submitted no later than March 20 of the year following the year in which the controlling person recognized income in the form of CFC profit, which was subject to personal income tax or income tax (clause 2, article 25.14 of the Tax Code of the Russian Federation).
Accordingly, if such income was not recognized last year, there is no need to file a CFC notice this year.
Procedure for filling out a notice of a CFC
The procedure for filling out the Notice of CFC is given in Appendix No. 2
The general requirements for filling out the Notice include the following:
- filled in one copy by hand in black or blue ink or using a computer;
- it is not allowed to correct errors using a corrective or other similar tool, duplex printing on paper, staple sheets that lead to damage paper carrier;
- filling in the fields with the values of textual, numerical, code indicators is carried out from left to right, starting from the first (left) familiarity;
- filling of text fields is made by capital printing characters;
- when printing the Notice on a printer, it is allowed that there are no borders of familiarity and dashes for unfilled familiarity. Signs must be printed in Courier New, 16 to 18 points high.
The notification consists of a title page, a sheet "Information about an individual", as well as sheets A, A1, B, B1, C, D, D1, D2.
If the information in any sheets is not related to the reporting organization or individual, these sheets are submitted, but not filled out.
If you need to fill in information about several foreign organizations or structures, fill in, respectively, several sheets A - D2.
A detailed procedure for filling out each sheet of the Notification is given in Appendix No. 2 to the Order of the Federal Tax Service of December 13, 2016 No. ММВ-7-13 / [email protected]
Notice of CFC 2018: sample filling
Let us cite for the CFC Notice in respect of a controlled foreign company in which the share of direct participation of a Russian organization is 75%.
Partner
Since January 01, 2015, as part of the fight against offshore companies in Russia, the so-called “deoffshorization” amendments to tax code RF. Below is a set of actions that an individual must take if he has registered or bought shares in a foreign company.
In relation to the controlling person of a tax resident of the Russian Federation - a taxpayer - an individual
| Grounds for submission | Documents Application | Responsibility | ||
| 1) emergence(registration of a company or purchase of shares) participation (direct or indirect, or through nominal persons, or actual) in companies: a) over 10% 2) Share change(number of shares) or order of participation(direct, indirect) in company 3) Termination of participation(liquidation, sale of all shares) in the company |
3 months from the date of occurrence / termination / change of control | Documents are NOT required |
Article 129.6 of the Tax Code of the Russian Federation 50 000 rub. for each company Statute of limitations - 3 years from the date on which the notice of participation is overdue- after 3 months from the date of occurrence / change / termination of control - clause 1 of article 113 of the Tax Code of the Russian Federation. For companies registered BEFORE May 15, 2015, the Notice of Participation had to be submitted by June 15, 2015, from which date the statute of limitations should be calculated. The statute of limitations for such companies will expire on June 15, 2018. |
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| Grounds for submission | Documents Application | Responsibility | ||
| Control (direct or indirect, or through nominees, or actual) over the company: 1) over 25% |
until March 20 of the year following the tax period in which income in the form of CFC profit is recognized as the controlling person | 1) CFC profit - less than 30 million rubles. (for 2016), clause 6 of article 25.15 of the Tax Code of the Russian Federation Submission of the Declaration 3-NDFL - not required IMPORTANT: The tax authority has the right to request the taxpayer to submit any documents confirming the accuracy of the information stated in the Notice. In this connection, we believe that those whose CFC profit does not exceed the established thresholds should be prepared to provide relevant supporting documents - financial statements and an auditor's report that does not contain a negative opinion 2) CFC profit CFC profit is taken into account when determining the tax base for personal income tax of the controlling person. Documents are NOT required Submission of Declaration 3-NDFL is required 3) an "active" company (as well as other grounds exemption of CFC profits from taxation clause 1 of article 25.13-1 of the Tax Code of the Russian Federation) Clause 1, Article 25.13-1 of the Tax Code of the Russian Federation 9. I have a KIK, but I have not yet decided whether I will “show” it in Russia. What is the difference between filing it myself with a missed deadline and paying a fine, or paying the same fine after the tax office finds out about it?A fine for failure to notify about participation in a foreign organization on time entails the imposition of a fine in the amount of 50,000 rubles. Even if you submitted the notification yourself, you will still need to pay the fine. If you wait until the tax authorities themselves find out (or maybe not find out) about the company, then you additionally run the risk of imposing the following fines: | ||