Currency controls in Russia?

[msmoby]

SC claims she heard VVP is planning to make a law that money over a certain value being moved abroad will / is subject to 15% 'tax if being moved abroad..

Cyprus and Russia seem to be ending their tax agreements, so bang goes CY has a source of moving RU based money offshore?


Russia is not alone in needing drastic measures to balance the books.

Anyone have any hard news on this?

[Manny]

Not aimed at Joe public, I expect she meant this:

NOVO-OGAREVO, March 25. /TASS/. Russian President Vladimir Putin has made a proposal to set a 15% tax on transfer of dividends to overseas accounts,

"All the payments of gains in the form of interest and dividends, flowing from Russia abroad to offshore jurisdictions, shall be taxed appropriately. Two thirds of such funds now - and these are essentially revenues of specific individuals - have the tax rate of just 2% as a result of various schemes of the so-called ‘optimization’," Putin said.

Such rate is unfair in conditions of the general individual income tax of 13%, the head of state said. "Therefore, I propose to introduce for those withdrawing their gains as dividends to foreign accounts the tax rate for such dividends as 15%," the President said.

Russia will withdraw from agreements unilaterally in case foreign partners do not accept new conditions, Putin cautioned. "We will start from the countries, through which significant resources of Russian origin are passing, being the most sensitive for our country," the Russian leader added.

https://tass.com/economy/1135441

[andrewfi]

This is a move aimed at combating capital flight, the export of large sums of money from the Russian economy. This has been an issue for years. The volume of money exported is nowhere near as bad as many external sources claim because the volume is inflated by loan payments by businesses for loans denominated in dollars. However it is a genuine problem that needed addressing. This initiative follows from a scheme that enables Russian taxpayers to repatriate previously exported money without penalty.

When the previous initiative was implemented it was made clear that there would be a stick that would follow the carrot. Here's the stick.

I'd guess that there's a secondary purpose to increase the real cost of loans denominated in anything other than roubles and in relative terms to decrease the cost of rouble denominated loans. I don't know, but I'd expect that there has been, or will soon be, an announcement about domestic loan policy to support this announcement.

This isn't a capital control in the accepted sense. People can still export as much money as they want. This is the Russian exchequer making sure that they get the tax due on money that would otherwise not be taxed in Russia. That's likely why the rate is set close to the general flat rate of tax but slightly higher - presenting an additional disincentive to take money out of the country.

[msmoby]

Grateful for the responses and Manny even taking the time to address same, elsewhere.

I am only wondering why SC would bring up news from nearly 5 months ago as 'news'......?

We will have capital from a property sale that might be exported and she eemed to think it might be 'taxed' at 15 percent.

As the much promised Rouble recovery hasn't happened....six years and counting since 40 R to the GBP...it's c.96....I was wondering if the monies were better invested elsewhere.

 

[Manny]

We will have capital from a property sale that might be exported and she seemed to think it might be 'taxed' at 15 percent.

If there was a tax liability, you'd get around that by withdrawing/spending via debit card abroad and taking some out in cash on the plane, surely?

[msmoby]

I believe the limit is $3k dollars in cash and you must know spending using a RU bank card is VERY expensive

Perhaps a new thread on suggestions on the best way to move c. $100k out of Russia legally, cheaply, and reliably ?

[Manny]

Perhaps a new thread on suggestions on the best way to move c. $100k out of Russia legally, cheaply, and reliably ?

Why not?

There's an old topic here you was in. I wonder if some stuff can be done with outfits such as Transferwise that would reduce charges? 

Bringing it out over time would surely be the way.

[msmoby]

Perhaps a new thread on suggestions on the best way to move c. $100k out of Russia legally, cheaply, and reliably ?

Why not?

There's an old topic here you was in. I wonder if some stuff can be done with outfits such as Transferwise that would reduce charges? 

Bringing it out over time would surely be the way.

Paysend, Transferwise, Revolut et al are GREAT for sending RU money to RU ... try the other way   ..((