The law on taxation of profits of controlled foreign companies enters into force

On November 18, 2014 the draft law on controlled foreign companies (CFC) was adopted in the second and third readings in the version which establishes more rigid requirements compared to the version of the first reading.

According to the Tax Code of Russian Federation, the provisions on the taxation of retained earnings of CFCs will enter into force on January 1, 2015. They contain criteria for recognition of foreign legal entities as tax residents of the Russian Federation, as well as rules aimed to eliminate the so-called transit schemes that make use of intermediary companies for taking maximum advantage of tax benefits.

Experts of the Department of International Projects comment on key provisions of the law in the November issue of analytical materials.