Russians no longer have to report movements on their Bulgarian accounts to the tax authorities

Laws relating to anti-money-laundering measures have made life much harder for Russians in Bulgaria, since it has now become difficult to open an account with a local bank. There is good news too, however. Interfax reports that in the third and final reading the State Duma of the Russian Federation has passed a law under which the country’s citizens may refrain from reporting movements of funds on foreign accounts to the Federal Tax Service. The law is expected to be signed by the President of the Russian Federation, after which the document will be published. The law will enter into force at the beginning of 2020.

As a reminder, Russians may currently open accounts with foreign banks, but they are obliged to notify the Federal Tax Service of this within a month. They must also report the closure of such accounts or changes to their details. Only non-residents, i.e. citizens of the Russian Federation living outside the country for more than 183 days in a calendar year, are exempt from reporting movements of funds on foreign accounts. Everyone else must submit reports to the tax authorities by 1 June of the year following the reporting year. If an account with a foreign bank is closed, the Federal Tax Service must be notified within a month, with a report submitted at the same time. Various ways of submitting the documents are provided for – in person, through a representative, by post or via the personal account on the Federal Tax Service website.

From the beginning of next year Russians may refrain from reporting on accounts opened in other countries provided the following conditions are met:

• if the accounts are opened with banks located in the territory of the OECD (Organisation for Economic Co-operation and Development) and the FATF (the intergovernmental Financial Action Task Force on money laundering);
• if the account balance or the total amount of movements on the account during the year does not exceed 600000 roubles.

The introduction of a system of automatic exchange of information between different countries allows the tax authorities to obtain the information they need without additional reports from individuals. On the one hand this is good – there is no longer any need to prepare reports for the Federal Tax Service. On the other hand, it should not be forgotten that from 2020 the tax authorities will have full information about Russians’ accounts with foreign banks even without those reports. So it is still necessary to be vigilant and to comply carefully with the law.

The Federal Tax Service of Russia currently exchanges information with the tax services of 75 countries, including Bulgaria. The list also includes Germany, Austria, France, Denmark, Greece, Poland, Belgium, Argentina, the Czech Republic, China, Lithuania, Latvia and other states.

Links:

Long-term residence permit in Bulgaria

Company registration in Bulgaria

Accounting services for your company in Bulgaria.