Conducting business through foreign structures is becoming increasingly fraught with risk: regulatory scrutiny is intensifying, and the likelihood of disputes with the Federal Tax Service and exposure to sanctions is growing. This article provides a detailed examination of the concept of a Controlled Foreign Company (CFC), the key legislative amendments introduced in 2025, alternative tax treatment models, practical recommendations for optimising the tax burden, and an analysis of case law relating to CFC-related disputes.
As of 1 January 2025, new rules governing the taxation of controlled foreign companies (hereinafter referred to as “CFCs”) came into force in the Russian Federation, as enacted by Federal Law No. 176-FZ. The objective of these amendments is to enhance the transparency of transactions carried out by Russian residents through foreign jurisdictions, to prevent the diversion of income into the “grey zone,” and to ensure that CFC profits are subject to an equitable tax burden. The changes affect the scope of tax liabilities, filing deadlines, and the penalties applicable for late submission of reports.
