In April of the current year The Ministry of Economic Development of the Russian Federation has reduced the estimates of the Russian Federation GDP growth in 2014 from 2.5% to 0.5-1.1%. The Ministry suggests conservatively active approach as basic estimate that expects the growth on 1.1%, but with the proviso that such result is possible only with easing of a budgetary rule and obtaining capital of the national banks.
These discussions about the budgetary rule that restricts the using of government incomes on oil and gas export are holding on for a long time. The Ministry of Economic Development affirmed for several times about the necessity of easing the budgetary rule, while The Ministry of Finance was against it and suggested to harden it. In such a case the President and the Prime-Minister are in lockstep with each other that there are no good reasons for the budgetary rule changing.
The Minister of Economic Development of the Russian Federation Alexey Ulyukaev also pointed out that there are growth retardations because of the volatile economic environment. So, according to the results of the first quarter of the current year economic expansion rates in the Russian Federation didn’t reach 1% and amounted to 0.8%. At the same time taking into account its seasonality in comparison to the fourth quarter of the last year the formula reducing to 0.5% is being observed.
Alexey Ulyukaev notes that foreign factors related to the aggravation in Ukraine and imposing sanctions against Russia on the part of the Occident exacerbated the tight economic situation in our country as it was. In such a case many experts point out that even not just imposing sanctions, but the concern of its possible tightening has become more sensitive for the national economy. In total, such uncertainty has a negative impact on the investment climate. So, according to the Minister of Economic Development following the results of the first quarter 2014 the investment volume in the capital stock decreased on 4.8%.
Amid the investments runoff the increasing of the capital outflow is being observed. So, the Ministry of Economic Development stepped up the official estimate of the capital outflow for the current year to 100 bn dollars at the beginning of April. At the same time the Ministry of Economic Development tends to be more optimistic estimating that the capital outflow won’t overdraw 70-80 bn dollars.
However, despite the unimpressive results of the first quarter of the current year many experts are still optimistic in their long-term estimates. As key factors that are able to influence the economic advance on a long-term horizon they note the priority development of the financial infrastructure and closer cooperation of the economic relations with the Eastern countries, especially with China.
The Ministry of Finance of the RF has drawn up instructions for the Federal Tax Service (FTS), where it has prescribed the most wide-spread tax avoidance maneuvers using offshore companies, liable for obligatory suppression.
By that in the law enforcement practice of double taxation legislation it is important to make a clear distinction between a beneficial owner, who/which reasonably pretends to his/her/its income, and nominally created «fly-by-night companies», transit companies, which allow unreasonably to remove income from the country of capital origin.
Among existing schemes the transfers of dividends, borrowing charges and intellectual property rights to offshores through intermediaries will be under close monitoring. For similar operations a transit company is created, which is thought to be the owner in the dealing with Russian resident and offshore structure. Such broker companies help remove passive income through the country, which has the double tax agreement with Russia, to offshore with minimal tax losses. Now it is planning to oblige all companies, registered in Russia, to get written opinion about potential partner in offshore countries. And if a company from the black list of the Ministry of Finance will be found out among shareholders of a contractor, it will be impossible to use tax concessions.
The situation is complicated by the fact that official authorities (FTS) have not suppressed similar schemes up to the present moment, because they have not had an opportunity to request information out of their jurisdiction, that’s why this duty was imposed on tax agent-country's resident.
Information agency Credinform has developed a list of criteria, combined into Reliability index, which let check out, if it is a fly-by-night company. This index, together with a comprehensive assessment of solvency, liquidity and assigned scoring point, helps our clients in secure choice of their contractor.