Companies that wish to legally minimize the amount of taxes and fees, while using offshore companies, should monitor the legislative changes regarding this sphere.
Every country desire to fill its coffers and, therefore, cannot be indifferent to offshore jurisdictions. Thus, every government reacts but in its own way. Almost all countries have black, grey (official, unofficial) lists of such undesirable jurisdictions.
EU offshore black list
The European Union periodically reviews the list of countries with which companies, registered in the euro zone, are prohibited (from tax perspective) to work with. This should also be taken into account by those who work with EU-based companies.
The current blacklist as of today includes nine following territories:
American Virgin Islands;
Federation of Saint Kitts, Nevis.
There is also a grey list of jurisdictions. How does it differ from the black one? Governments of the blacklisted jurisdictions are not intended to change their legislations in order to comply with the EU criteria of tax transparency. While officials of the jurisdiction from the grey list assert their intention to comply with EU requirements.
Despite the fact that the jurisdictions of the blacklist oppose the idea of transparency, the EU is still a very authoritative organization that cannot be ignored.
Here are some proofs:
the number of EU blacklisted jurisdictions has been reduced from 17 (in December 2017) to 9 in a short period of time;
frequency of revision of the blacklist (in 2018 was revised twice), which means that there were changes at the legislative level of the blacklisted jurisdictions.
Up-to-date information with respect to offshore companies concerning different countries:
Hong Kong is no longer an offshore jurisdiction from the perspective of the Russian Federation (since 2018);
Latvian banks have limited their services to individuals and legal entities with a high degree of risk (first of all, customers from the countries of the former post-Soviet area);
Latvia approved the de-offshorisation policy (starting from March of this year);
starting from 2018, the Russian Tax Service is provided with information on owners (Russian residents) of financial accounts;
the EU approved the Directive on the establishment of an international court (on a permanent basis) to resolve investment disputes;
at the request of the other party, Ukraine removed Hungary, Georgia, Latvia, Maldives and Estonia from the list of offshore zones and took a timeout for a final decision.
Federal tax service blacklist, Russian Federation
In addition to the EU, other countries also adopt lists of undesirable jurisdictions for cooperation.
This January, Russian Federation has also updated the list of jurisdictions, which at the legislative level do not exchange tax information. The list has been reduced to one 135 jurisdictions.
According to the legislation of the Russian Federation, companies are not prohibited from being residents of the jurisdiction from such list, however, there is an additional requirement — to pay tax on dividends within the Russian Federation.
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