Arbitration Court tells government to accompany fight against offshores with parallel tax cuts
MOSCOW, Russia — The Supreme Arbitration Court (SAC) has called the Russian fiscal authorities to accompany ongoing fight against offshore havens with significant simultaneous reduction in tax burdens on companies in the country.
"Many countries are struggling with the offshore havens across the globe, but we must realize that national companies use these havens as an opportunity to reduce the tax burdens they face on their markets,” SAC Chairman Anton Ivanov told a meeting of judges of superior courts of Russia and Germany in Moscow.
“Therefore, the fight against such practices would be more efficient if such fights are accompanied with reduction in tax burdens in the local economies. Otherwise, companies will continue to seek legal ways to hide their assets abroad from taxation in their economies."
Ivanov proposed creation of conditions in local economies that will encourage business owners basing companies in their countries of origin, rather than fuelling their desires to take them abroad.
Specifically, the government needs to reduce, rather than expand the so-called list of strategic state-owned corporations, where strenuous approval processes are required to purchase stakes, he added.
"Besides, it also needs to think about using economic incentives, such as state guaranties on investments’ security and regulatory changes, including adopting business-friendly amendments in the tax laws."
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