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Modern Approaches to the Taxation of Representative Offices and Branches of Foreign Companies (BEPS, FATCA)
[Современные подходы к налогообложению представительств и филиалов иностранных компаний (beps, fatca)]

Author

Listed:
  • Kornienko, Natalia (Корниенко, Наталья)

    () (Russian Presidential Academy of National Economy and Public Administration (RANEPA))

  • Velikova, Elena (Великова, Елена)

    () (Russian Presidential Academy of National Economy and Public Administration (RANEPA))

  • Gulyaeva, Svetlana (Гуляева, Светлана)

    () (Russian Presidential Academy of National Economy and Public Administration (RANEPA))

  • Pushkareva, Nataliya (Пушкарева, Наталья)

    () (Russian Presidential Academy of National Economy and Public Administration (RANEPA))

  • Mitrofanova, Ekaterina (Митрофанова, Екатерина)

    () (Russian Presidential Academy of National Economy and Public Administration (RANEPA))

Abstract

The establishment of representatives of foreign companies and corporations in Russia is a form of direct investment into the Russian economy. The OECD recommends that various countries tax permanent representatives as if they were independent entities. The existing tax law of the Russian Federation does not adequately cover and regulate these tax issues. The notorious Bloomberg, McKenna, Amazon, Google, IKEA, Starbucks and other cases are glaring examples of tax evasion. Practices of other world nations and countries seriously address the issue of developing measures against dilution and transfer of the tax base through the use of permanent representatives specifically in the BEPS plan. Foreign companies have the opportunity to do business in other countries without an obligation to pay taxes on the income from such business transactions. However, in order to fulfill OECD recommendations, a concept of taxation of representatives and affiliated branches of international organizations in the Russian Federation must be developed, taking into account national interests and the practices of other world nations and countries. For example, there should be an opportunity to use the term "independent entity" to fulfill the purpose of the Russian taxation system to adequately tax representatives and affiliated branches of foreign organizations in the Russian Federation and to fulfill the country's obligations stipulated in international treaties between the Russian Federation and other countries aimed at avoiding double taxation.

Suggested Citation

  • Kornienko, Natalia (Корниенко, Наталья) & Velikova, Elena (Великова, Елена) & Gulyaeva, Svetlana (Гуляева, Светлана) & Pushkareva, Nataliya (Пушкарева, Наталья) & Mitrofanova, Ekaterina (Митрофанова, , 2017. "Modern Approaches to the Taxation of Representative Offices and Branches of Foreign Companies (BEPS, FATCA)
    [Современные подходы к налогообложению представительств и филиалов иностранных компаний (
    ," Working Papers 031716, Russian Presidential Academy of National Economy and Public Administration.
  • Handle: RePEc:rnp:wpaper:031716
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