Ðóñ Eng During last 365 days Approved articles: 2065,   Articles in work: 293 Declined articles: 786 

Egorova O.Ya., Milogolov N.S. Tax Residency of Individuals and Legal Entities: International Experience and the Concept's Development Options in Russia

Published in journal "Taxes and Taxation", 2016-11 in rubric "International Tax Law", pages 885-895.

Resume: The rules for defining the residency determines the scope of the tax jurisdiction of a state and fiscal conditions for foreign and domestic investors and companies. In their research the authors provide an analytical review of foreign states' approaches to defining the residency of individuals and legal entities and danalyze the concept of residency in terms of international tax policy. The authors also make recommendations regarding development the residency concept in the Russian Federation. They study the connection between rules for defining the tax residency, CFC rules, and non-residents' income taxation system in terms of OECD double taxation avoidance, and Russian tax legislation in part of approaches to the definition of residency. The authors make several important conclusions, for example, that developed countries tend to choose the territorial taxation system. The other conclusion is that due to the international tendency towards automatic information exchange between countries, it is advantageous to avoid the status of Russia's residents even though tax rates are rather low in Russia for individuals who are potential residents of countries with lower individual tax rates or no tax rates at all (such as Saudi Arabia or particular offshore jurisdictions) or countries where CFC rules do not apply. 

Keywords: deoffshorization, tax competition, global tax system, territorial tax system, tax policy, tax residency, CFC, DTT, OECD Model Convention, PIT

DOI: 10.7256/1812-8688.2016.11.21012

This article can be downloaded freely in PDF format for reading. Download article

OECD (2015), Addressing the Tax Challenges of the Digital Economy, Action 1-2015 Final Report, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, Paris. 288 p. http://dx.doi.org/10.1787/9789264241046-en
Milogolov N.S., Pinskaya M.R. Pravila nalogooblozheniya kontroliruemykh inostrannykh kompaniy: sravnitel'nyy analiz. Nauchno-issledovatel'skiy finansovyy institut. Finansovyy zhurnal. ¹ 4 (22), 2014. S. 36-46
Pis'mo FNS Rossii ot 29.01.2016 g. ¹ OA-4-17/1265@
Gidirim V.A. Printsip rezidentstva korporatsiy v mezhdunarodnom nalogovom prave. Nalogi i nalogooblozhenie. ¹ 2, 2013. C. 123-170
Voget, Johannes. Headquarter Relocations and International Taxation. Journal of Public, Economics, Vol. 95 (October), 2011. Pp. 1067–81
Diamond, Peter, and James A. Mirrlees. Optimal Taxation and Public Production I: Production Efficiency. American Economic Review, Vol. 61 (March), 1971. Pp. 8–27
Musgrave, Peggy B. United States Taxation of Foreign Investment Income: Issues and Arguments. International Tax Program (Cambridge, Massachusetts: Law School of Harvard University), 1969. 564 p.
Article 1 (4) of the United States model income tax convention of November 15, 2006 convention between the government of the United States of America and the government of ------- for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income. 43 p. URL: https://www.irs.gov/pub/irs-trty/model006.pdf
OECD (2014), Action Plan on Base Erosion and Profit Shifting (Russian version), OECD Publishing. 56 p. http://dx.doi.org/10.1787/9789264207837-ru
T. J. Atwood, G. Ryan Huston, Dana Wallace. Are worldwide tax systems disadvantageous for resident firms compared with territorial tax systems? May, 2013. 43 p.
K. Holmes International Tax Policy and Double Tax Treaties. Second Revised Edition. IBFD. 2014; OECD Model Convention on Income and Capital. Condensed Version of July 2010. 432 p.
Philip Dittmer. A Global Perspective on Territorial Taxation. Tax foundation. August 10, 2012. 28 p.
OECD Model Tax Convention on Income and on Capital CONDENSED VERSION. July 2010. 466 p.
T. Matheson, V. Perry, Ch. Veung WP/13/205 IMF Working Paper Fiscal Affairs Department Territorial vs. Worldwide Corporate Taxation: Implications for Developing Countries. October, 2013. 25 p.
Stat'ya 26 (vnutrenniy rynok), 49 to 55 (ustanovlenie) and 56 to 62 (uslugi) Dogovora o funktsionirovanii Evropeyskogo Soyuza (Treaty on the Functioning of the European Union (TFEU)). 326 p. URL: http://www.europarl.europa.eu/atyourservice/en/displayFtu.html?ftuId=FTU_3.1.4.html
State Trading Corporation v. Commercial Tax Officer (1963) 2 SCJ 605 (India). 61 p.
Pis'mo FNS Rossii ot 16.01.2015 g. ¹ OA-3-17/87@
Federal'nyy zakon Rossiyskoy Federatsii ot 24 noyabrya 2014 goda ¹ 376-FZ «O vnesenii izmeneniy v chasti pervuyu i vtoruyu nalogovogo kodeksa Rossiyskoy Federatsii (v chasti nalogooblozheniya pribyli kontroliruemykh inostrannykh kompaniy i dokhodov inostrannykh organizatsiy)». 24 c.
Proekt federal'nogo zakona «O vnesenii izmeneniy v stat'yu 269 chasti vtoroy Nalogovogo kodeksa Rossiyskoy Federatsii v chasti opredeleniya ponyatiya kontroliruemoy zadolzhennosti». Vnosyat deputaty Gosudarstvennoy Dumy G.Ya. Khor, A.M. Makarov
Kotlyarov M.A., Rykova I.N. Protivodeystvie perenosu nalogovoy bazy v nizkonalogovye yurisdiktsii: opyt OESR i prioritety dlya Rossii. Nauchno-issledovatel'skiy finansovyy institut. Finansovyy zhurnal. ¹ 4 (22), 2014. S. 47-54.
Federal'nyy zakon Rossiyskoy Federatsii ot 8 iyunya 2015 g. ¹ 140-FZ «O dobrovol'nom deklarirovanii fizicheskimi litsami aktivov i schetov (vkladov) v bankakh i o vnesenii izmeneniy v otdel'nye zakonodatel'nye akty Rossiyskoy Federatsii». 29 c.
Imf policy paper. Spillovers in international corporate taxation. May 9, 2014. 86 p. URL: https://www.imf.org/external/np/pp/eng/2014/050914.pdf

Correct link to this article:
just copy this link to clipboard