105120, Moscow, 1st Syromyatnichesky per. 1, BC "Delta Plaza", 1st floor
+7 (495) 025 02 66
info@alpinetax.ru
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CFC Profit vs IFRS Profit
CFC reporting under IFRS without adjustments under the Russian Tax Code - a serious additional charge or overpayment.
Is this my obligation?
The legislation requires the declaration of profit of a CFC when the threshold of 10 million roubles is exceeded.
Can I declare the IFRS profit as CFC profit and pay tax?
No, the tax is not calculated on IFRS profits.
What is the risk of incorrect calculation?
An incorrect calculation may result in a substantial overpayment or an additional charge and penalties.
Is this my obligation?
The legislation requires the declaration of profit of a CFC when the threshold of 10 million roubles is exceeded.
Can I declare the IFRS profit as CFC profit and pay tax?
No, the tax is not calculated on IFRS profits.
What is the risk of incorrect calculation?
An incorrect calculation may result in a substantial overpayment or an additional charge and penalties.
What do we offer?
Calculate CFC profit and make adjustments under the Russian Tax Code
Prepare a cover letter to the Federal Tax Service concerning CFC's profit
Determine the tax to be paid on CFC's profit
It will be possible to fill in line 051 in 3-NDFL and correctly declare the CFC's profit
It is important for us to warn you about your tax obligations in time!
Case 1. Risk of overpayment of RUB 7.5 million
Case 2: The risk of an additional payment of RUB 2.5 million
Case 1. Risk of overpayment of RUB 7.5 million
A client had an IFRS profit of USD 800K. The plan was to declare this amount as personal income and pay personal income tax. Based on our adjustments, we determined that the CFC's profit did not exceed the established threshold of RUB 10 mln and there was no corresponding personal income tax payable.
Case 2: The risk of an additional payment of RUB 2.5 million
A client incurred an IFRS loss and did not plan to pay personal income tax on the CFC's profit. After accounting for adjustments for provisions, the CFC's profit exceeded the 10 mln roubles threshold; accordingly, it was necessary to declare the full amount of the CFC's profit (16.3 mln roubles) and pay personal income tax (2.2 mln roubles).
We will be glad to help you!
Sergei Gerasimov
Managing Partner
М.: +7 916 733 39 83
Maxim Klyuchnikov
Partner
М.: +7 916 220 97 77
Anastasiya Markova
IFRS Manager
М.: +7 916 303 70 92