Medvedev: Capital Return Amnesty Not About ‘Dragging’ Money Back to Russia

Russian Prime Minister Dmitry Medvedev stated that Moscow does not intend to “physically drag money” to Russia in the framework of amnesty for capital returning to country suggested by Russian President Vladimir Putin.

MOSCOW, December 13 (Sputnik) — Moscow does not intend to “physically drag money” to Russia in the framework of amnesty for capital returning to country suggested by Russian President Vladimir Putin, the prime minister of the country said Saturday, adding that Russian government will create all necessary conditions for capital return.

“To a great extent, return of money to the territory of the Russian Federation will depend on financial and economic situation in our country. It is true. And on how things will go with regard to sanctions, oil, what macroeconomic situation there will be in our country. This is fair. But we don’t make necessary return of the capitals to Russia our goal for now. They must be declared, and if this decision is taken, then the taxes should be paid,” said Russian Prime Minister Dmitry Medvedev, who appeared on the Vesti v Subbotu (Vesti on Saturday) show on Rossiya-1 TV channel.

Medvedev added that Russia does not intend to “make people physically drag money to Russia”, the government will create necessary conditions for capital return.

In the beginning of December, during the annual state-of-the-nation address to the Federal Assembly, Russian leader Vladimir Putin suggested total amnesty for capital returning to Russia. Putin said that Russian citizens with offshore assets “will get solid legal guarantees” to retain their capital and goods if they return those assets to Russia.

In November, Putin signed a law to limit offshore tax sheltering. The new law introduced an amendment to the Russian Tax Code, forcing Russian owners of foreign-based companies to inform the Russian Federal Tax Service of their profits. This modification introduced the notions of a “controlled foreign company” and a “controlling entity”. The controlling entity is now obliged to submit a tax declaration, a financial statement on the controlled foreign company and audit results. Taxes are calculated with regard to the offshore company’s income.

A separate provision in the so-called “deoffshorization” law lists criteria that can classify a foreign company as a Russian tax resident.