Game over for CRS avoidance! OECD adopts tax disclosure rules for advisors

AUTHOR: Alexander Yudovich, LL.M.
Head of Russian & CIS Desk, RECHTSANWÄLTE LENNERT PARTNERS AG

Published on April 23, 2019

Model Mandatory Disclosure Rules for CRS Avoidance Arrangements and Opaque Offshore Structures

What does this mean for Russian clients?
In light of the flying start of the CRS / automatic information exchange many wealthy Russian citizens have «purchased» investment citizenship or residency in jurisdictions like Cyprus, Malta, St. Kitts, etc.

The intent was, among other things, to change the tax residency.
In some of these jurisdictions certificates of tax residency can be obtained easily, without complying with any requirements regarding actual tax residency.

OECD now wants to put an end to this.

Game over for CRS avoidance! OECD adopts tax disclosure rules for advisors

AUTHOR: Alexander Yudovich, LL.M.
Head of Russian & CIS Desk, RECHTSANWÄLTE LENNERT PARTNERS AG

Published on April 23, 2019

Model Mandatory Disclosure Rules for CRS Avoidance Arrangements and Opaque Offshore Structures

What does this mean for Russian clients?
In light of the flying start of the CRS / automatic information exchange many wealthy Russian citizens have «purchased» investment citizenship or residency in jurisdictions like Cyprus, Malta, St. Kitts, etc.

The intent was, among other things, to change the tax residency.
In some of these jurisdictions certificates of tax residency can be obtained easily, without complying with any requirements regarding actual tax residency.

OECD now wants to put an end to this.

What should banks, trust services providers, family-run offices, wealth managers and their compliance experts working for Russian clients do?

Concerning their Russian clients financial institutions need to check:

1. The number of days the Russian client spent in Russia (based on the stamps in the passport);

or

2. The certificate of tax residency/ non-residency in Russia (which can be obtained by the client or on his behalf from Russian tax authorities).

3. Confirmation of tax residency/ non-residency in other jurisdictions.

4. In difficult situations and with high-risk profile clients a tax residence opinion must be obtained
from a lawyer.

Tax Residence Opinion for Russian Clients for 2018: Getting Prepared for CRS, in our E-Shop

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