​Putin signs ‘anti-offshore’ law

Discussion in 'Politics & Society' started by sasi, Nov 26, 2014.

  1. sasi

    sasi Senior Member Senior Member

    Joined:
    Nov 18, 2012
    Messages:
    3,401
    Likes Received:
    1,679
    Location:
    India
    Russian President Vladimir Putin has signed into law the “anti-offshore” bill aimed at curbing capital outflow which is estimated at $2 trillion in recent years.
    The document amends the Tax Code of the Russian Federation regarding the taxation of income from Russian controlled companies abroad.
    The new legislation is hoped to bring billions of dollars back to Russia, as in 2014 $200 billion is estimated to have leaked from the Russian economy to tax havens.
    READ MORE: 'Anti-offshore' law to bring billions back to Russian economy
    Duma members think the implementation of this law could annually bring an additional $3- 4.5 billion (150-200 billion rubles) back into Russian government coffers.
    Now, any company registered in a tax haven where a Russian citizen holds a 50 percent stake, together with other members of his or her family, will be classified as a controlled foreign company.
    The restrictions are expected to be tightened in the future. In 2016 the stake will be cut to 25 percent. The individual threshold will be 10 percent for Russian residents who co-own more than 50 percent of a controlled foreign organization.
    According to the new law, the minimum profit that needs to be declared will be $1.2 million (50 million rubles) in 2015, $670,000 (30 million rubles) in 2016, and $220,000 (10 million rubles) after 2017.
    In order to avoid double taxation, taxes paid in other countries will be considered when determining the obligations towards Russia.

    http://t.co/q9eVhekO9B

    let's us see,if modi is serious abt blackmoney!
     
  2.  
  3. sasi

    sasi Senior Member Senior Member

    Joined:
    Nov 18, 2012
    Messages:
    3,401
    Likes Received:
    1,679
    Location:
    India
    TrueSpirit1 likes this.
  4. LETHALFORCE

    LETHALFORCE Moderator Moderator

    Joined:
    Feb 16, 2009
    Messages:
    20,550
    Likes Received:
    6,552
    Why not just forgive people bringing money back in the country rather than taxing them?
     
  5. sasi

    sasi Senior Member Senior Member

    Joined:
    Nov 18, 2012
    Messages:
    3,401
    Likes Received:
    1,679
    Location:
    India
    it will lead to backlash against govt!
     
  6. sasi

    sasi Senior Member Senior Member

    Joined:
    Nov 18, 2012
    Messages:
    3,401
    Likes Received:
    1,679
    Location:
    India
    New Delhi:The Narendra Modi government, which has promised to bring back untaxed or black money stashed abroad to India, has run up against a maze of clauses in international agreements that make it tough to "retrieve black money," a note from the Prime Minister's Office to the Finance Ministry admits.
    This week, Prime Minister Narendra Modi made a strong pitch at the G20 summit in Brisbane for an international effort to facilitate the retrieval of black money.
    But the PMO note, which NDTV has accessed, admits that the current international convention against corruption, which was ratified by India in 2011, bars that retrieval. "Arrangements in place do not reveal any intention to retrieve black money," the note said, asking the Finance Ministry to give its comments.
    The PMO points out that the information shared under the international pact can only be used for tax purposes and not for investigation or arrest and prosecution.
    Also, it says the international convention cannot be applied with countries like Switzerland, with which India already has a bilateral protocol. India's new treaty with Switzerland on sharing of information on bank accounts came into effect in November 2011,
    Switzerland is clear that information will not be shared retrospectively - that is, it will only share information that came after the agreement was signed.
    The agreement with Switzerland, the note also says, bars India from information about money that has been acquired through illegal means. It only helps avoid taxing a person in both countries.
    The Supreme Court has constituted a special investigative team to ensure black money stashed away abroad is brought back to the country. The ruling BJP had made the retrieval of black money a big campaign issue in the run up to the 2014 Lok Sabha elections.

    International Convention Does Not Allow for Retrieval of Black Money, Says Note From PMs Office - NDTV
     
  7. sgarg

    sgarg Senior Member Senior Member

    Joined:
    Sep 9, 2014
    Messages:
    3,479
    Likes Received:
    962
    @sasi, India is benefiting greatly from globalization. You may not realize but millions of Indian jobs are based on globalized industries. One part of globalization (free trade) is free movement of capital.

    Every good thing has a bad side. Globalization has its bad side in some leakage of money to foreign accounts. When you say you want to stop movement of capital, you stop globalization too.

    India has too many people where jobs become the first priority of any government. If the government can provide the jobs without looking for foreign capital - then good. Russia can afford this, but not India.
     
    Last edited by a moderator: May 10, 2015
  8. sgarg

    sgarg Senior Member Senior Member

    Joined:
    Sep 9, 2014
    Messages:
    3,479
    Likes Received:
    962
    I agree that the effort to bring back black money will not succeed. The money lost is lost. However regulatory framework can REDUCE leakage, not entirely stop it. The complexity is to do it without hurting economic growth.

    The foreigners want easy rules for labour and capital. So if you want to attract foreign capital, you have to compromise on regulations.

    Modi is an absolutely honest person who is devoted to service of his country. However he is not an evil crusader. Modi knows that India has to set up modern industries which requires foreign technology and capital.
     
    TrueSpirit1 likes this.
  9. sasi

    sasi Senior Member Senior Member

    Joined:
    Nov 18, 2012
    Messages:
    3,401
    Likes Received:
    1,679
    Location:
    India
    but he didn't taking any steps to curb bm!
     
    Last edited by a moderator: May 10, 2015
  10. Nicky G

    Nicky G Senior Member Senior Member

    Joined:
    Nov 24, 2014
    Messages:
    1,381
    Likes Received:
    1,227
    Location:
    NA
    Restriction of movement of capital is dangerous. Not really sure what Putin is thinking here. The foreign investors might not be directly affected but the more restrictions you put on flow of capital, the more circumspect they are likely to get.

    Companies are money making machines. They'll do anything and utilize every loophole to maximize their profit. That might seem unjust but the other side is the millions of jobs they provide. The two aspects need to be balanced against each other.

    For India, the jobs created enjoy a much higher priority than anything else. There is plenty of black money within India that we concentrate on before trying to deal with the world. Black money permeates every line of business, start with the media houses who love to harp on about it. Though we absolutely need to make sure black money is not being used to fund extremism against India.

    Besides, people make a big issue of black money and obviously BJP being in opposition did too, however in the larger scheme of things and the challenges that India faces, this would not be high in the list of priorities.

    My prediction for how this will play out. Currently the SC took things off the government and the onus is in them and their SIT to dig something up. Eventually, sometime before the next LS, some little money will be brought back and some political scores will be settled. However, any big retrieval of money is highly unlikely.
     

Share This Page