Russian Tax Amnesty Lined Up For July

by Tatiana Smolenskaya, Tax-News.com, Moscow

17 February 2006

Senior figures within the Russian government have revealed this week that a proposed tax amnesty on undeclared assets could go into effect immediately after the relevant law has been passed, possibly in July this year.

According to Deputy Prime Minister Alexander Zhukov, the tax amnesty bill has been "practically finalised" and will be submitted to the Duma, the lower house of the Russian parliament, later in the year.

Meanwhile, Deputy Finance Minister Sergei Shatalov has been reported as stating that the amnesty could go into effect one day after the amnesty law is passed, possibly in July, and will last until April 30, 2007.

Zhukov told a business conference on Wednesday that the amnesty will be a one-off scheme and will not be repeated.

Those declaring monies to the authorities under the amnesty will escape prosecution in return for paying a 13% tax on the previously hidden assets. In an attempt to encourage participation in the scheme, a provision stipulating that newly declared money must be paid into a Russian bank account has been dropped.

However, the amnesty will only offer immunity from prosecution for possible violations of tax law, and individuals coming forward under the scheme may still be liable for prosecution for violating foreign exchange laws and the Criminal Code.

Urging those with hidden assets to come forward, Shatalov has previously warned taxpayers that penalties for tax crimes after the closure of the scheme will be "very tough".

President Vladimir Putin is hoping that the scheme will result in the repatriation of at least some of the $160 billion dollars in capital which which has fled the country since the collapse of the Soviet Union in the early 1990s.

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