On July 1, 2023, the Order of the Ministry of Finance of Russia No. 86n of June 5, 2023, “On the Approval of the List of States and Territories Granting Preferential Tax Treatment and/or Not Requiring Disclosure and Provision of Information in Financial Transactions (Offshore Zones)” came into effect. The list now includes 91 offshore zones, including EU countries, the USA, Japan, Canada, Australia, and others.

Transactions of Russian organizations with residents of offshore zones are considered controlled if the total income of the parties to such transactions exceeds 120 million rubles per year. It does not matter whether the parties to the transaction are related.

Information about such transactions must be included in the Notification of Controlled Transactions, which must be submitted to the tax authorities (IFNS) each year no later than May 20 following the reporting year. In the event of a tax audit of controlled transactions, the taxpayer must submit documentation containing the information specified in the Tax Code of the Russian Federation regarding the specific transaction (group of homogeneous transactions) indicated in the tax authority’s request within 30 business days from the date of receiving the request.

For the purpose of preparing the Notification and Documentation on Controlled Transactions, Russian organizations need to take into account the significant expansion of the list of offshore zones in 2023. The list was expanded to include the following states and territories:

  1. Australia
  2. Republic of Austria
  3. British Antarctic Territory
  4. British Indian Ocean Territory
  5. Grand Duchy of Luxembourg
  6. Hungary
  7. Hellenic Republic (Greece)
  8. Ireland
  9. Italian Republic (Italy)
  10. Canada
  11. Kingdom of Belgium
  12. Kingdom of Denmark
  13. Kingdom of Spain
  14. Kingdom of the Netherlands
  15. Kingdom of Norway
  16. Kingdom of Sweden
  17. Republic of Latvia
  18. Republic of Lithuania
  19. New Zealand
  20. Pitcairn Islands
  21. Portuguese Republic (Portugal)
  22. Republic of Albania
  23. Republic of Bulgaria
  24. Republic of Iceland
  25. Republic of Cyprus
  26. Republic of Korea (South Korea)
  27. Republic of Malta
  28. Republic of Poland
  29. Republic of North Macedonia
  30. Republic of Singapore
  31. Republic of Slovenia
  32. Republic of Croatia
  33. Romania
  34. Saint Helena, Ascension, and Tristan da Cunha
  35. Slovak Republic (Slovakia)
  36. United Kingdom of Great Britain and Northern Ireland
  37. United States of America
  38. Sovereign Base Areas of Akrotiri and Dhekelia
  39. Taiwan (China)
  40. Ukraine
  41. Federal Republic of Germany
  42. Federated States of Micronesia
  43. Republic of Finland
  44. Falkland Islands (Malvinas)
  45. French Republic (France)
  46. Montenegro
  47. Czech Republic
  48. Swiss Confederation (Switzerland)
  49. Republic of Estonia
  50. South Georgia and the South Sandwich Islands
  51. Japan