Russia signs on to OECD’s Automatic Exchange of Information initiative

BOFIT Viikkokatsaus / BOFIT Weekly Review 2016/20

The OECD and G20 countries have developed the Automatic Exchange of Information (AEOI) standard procedure as a way to increase international cooperation among tax officials and thereby reduce tax evasion. Under the AEOI, tax officials in participating countries agree to automatic annual exchange of information about the asset-holdings of citizens. Currently, there are 82 signatory countries to the agreement, including a number of tax havens such as the British Virgin Islands. Russia’s participation is set to commence in September 2018, but bilateral agreements still need to be signed.

The AEOI is expected to support implementation of new tax laws developed in recent years to reduce hiding capital assets abroad. These include a ban on foreign assets of individuals in government service and stricter taxation of Russian income originating abroad. Increased taxation of offshore capital has been sought also by an amnesty law enacted last summer. The law allows Russians to avoid possible punishments related to offshore assets through voluntary disclosure. The law so far has resulted only in a couple hundred voluntary asset declarations and will remain in force until end-June.

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