The government of Russia closes the program Amnesty, under which large businesses were asked to return to the country assets and money in exchange for guarantees of non-prosecution for tax and currency violations.
Another round of Amnesty – the third in 2015, when President Vladimir Putin has called on billionaires to help the falling economy – will end on 29 February. The fourth stage is not provided, reported “Interfax”, the state Secretary – Deputy Minister of Finance Alexey Sazanov.
“God loves the Trinity, – he explained. – Why set a time if all the time to tolerate it. The Ministry’s position that it should not be extended”.
The last round of Amnesty was the shortest and lasted only five months (from 1 July 2019). During this period, the Russians were able to voluntarily declare assets and accounts abroad, receiving exemption from personal income tax and profit tax, controlled foreign companies, provided that they become tax residents of the Russian Federation.
The money was offered to repatriate to banks located on the territory of Russia and of the company to re-register in the special administrative regions (SAR) in the territories of the Kaliningrad region and Primorski Krai.
But neither appeals to patriotism nor the creation of an internal offshore with zero tax on dividends are unable to reverse the river of money leaving Russia. According to the Bank, for five years Amnesty a net outflow of capital amounted to 189,6 billion.
It was maximum in 2018 (63 billion dollars), and at the end of last year slowed to 2.3 times – up to 27 billion dollars. In 2015, the private sector exported 57 billion in 2016, the 18 billion in 2017-m – 24 billion.
Figures for outflows fluctuate, but this is mostly a reflection of the movement of speculative foreign money in the financial market, points out chief economist at ING in Russia and CIS Dmitry Dolgin. In 2018, fearful of sanctions against “Rusala” the NRA dropped Russian government bonds and shares of Russian companies, and the outflow was a record in 2014.
And last year, on the contrary – has invested $ 20 billion in debt securities of the Finance Ministry, when it became clear that the trump is not willing to go to drastic measures.
While structural capital outflows from Russia stable in all policies: from one year to the 20-30 billion dollar business displays the country in the form of “direct investment” abroad, says Dolgin. This is money that the company sent to capital, offshore structures, Parking profits outside the country.
Last year these outflows totaled 26 billion dollars, a year earlier to 30 billion in 2017-m – 36 billion in 2015-16 – 20 billion In total for five years of Amnesty, 136 billion dollars.
The most popular destination is Cyprus, where on 1 July 2019 the Russians invested of 200.2 billion dollars – the amount of 9.5 times higher than the GDP of the island. In comparison with the beginning of the Amnesty of capital, it grew by 84 billion dollars, or 74%.
In second place is the Netherlands ($47 billion), the third – Austria (26.6 billion dollars).
“Households and corporations are likely to remain net exporters of capital until, until you see signs of structural transformation” of the economy, predicts Dolgin.