Notification of Tax Authorities of the Republic of Belarus and the Russian Federation Regarding the Bank Account Opening of a in a Foreign Bank

Taxpayers in the Republic of Belarus and the Russian Federation are required to notify the tax authorities of the respective states about the opening of a bank account in a foreign bank.

Is this notification mandatory for all taxpayers, and what are the consequences of failing to fulfill this obligation? REVERA lawyers explain.

Republic of Belarus

Basis: Sub-clause 1.9.2, clause 1, Article 22 of the Tax Code of the Republic of Belarus (hereinafter referred to as the “Tax Code of Belarus”) establishes the obligation for a taxpayer to notify the tax authority at the place of registration about the opening or closing of a bank account or other credit organization account outside the Republic of Belarus from the date of opening/closing of such account.

Procedure and deadlines for notification:

1.  Only Belarusian organizations are required to notify tax authorities about the opening of a bank account in a foreign bank. o    Reference: A “Belarusian organization” is recognized as an entity whose place of incorporation is the Republic of Belarus (clause 1, Article 15 of the Tax Code of Belarus).
2. As of the publication date of this article, individuals are not subject to this obligation.
3. Notification must be submitted no later than 10 business days from the date the account is opened.
4. The notification form is outlined in Appendix 30 of Resolution No. 14 of the Ministry of Taxes and Levies of the Republic of Belarus dated April 26, 2013, “On the Administrative Procedures of Tax Authorities and the Establishment of Document Forms” (hereinafter referred to as “Resolution No. 14”).

Liability: A fine of up to 20 base units (≈ €221.42). Failure to submit documents and other information to the tax authority within the established deadline, which taxpayers are obligated to provide in accordance with tax legislation, international agreements of the Republic of Belarus, or upon request from the tax authority for tax control purposes, including if committed by a legal entity’s official or individual entrepreneur, may result in a fine of up to 20 base units (Part 1, Article 14.6 of the Administrative Offenses Code of the Republic of Belarus).

Additionally, a Belarusian organization is required to submit information on the movement of funds in bank accounts or other credit (financial) institutions outside the Republic of Belarus, except for correspondent accounts:

• No later than March 31 of the year following the reporting year,
• To the tax authority at the place of registration,
• In accordance with the form set out in Appendix 34-8, as per Resolution No. 14.

Russian Federation

Basis: In accordance with Part 2, Article 12, and Part 10, Article 28 of Federal Law No. 173-FZ “On Currency Regulation and Currency Control” dated December 10, 2003 (hereinafter referred to as “Law No. 173-FZ”), taxpayers are required to notify tax authorities about the opening (closing) or changing of bank account (deposit) details in a bank located outside the territory of the Russian Federation (hereinafter referred to as “RF”).

According to Articles 207 and 246.2 of the Tax Code of the Russian Federation, taxpayers include:

• Individuals who have been in the territory of the RF for more than 183 days within any consecutive 12 months,
• Individuals receiving income from sources within the RF and abroad,
• Russian organizations,
• Foreign organizations recognized as tax residents of the RF,
• Foreign organizations managed from the RF.

Procedure and deadlines for notification: Taxpayers (individuals and legal entities) must notify the Russian Federal Tax Service (FNS) no later than one month from the date of opening or changing the details of such accounts in banks located outside the territory of the Russian Federation.

The forms, formats, and methods of notifying tax authorities about the opening of a foreign bank account are established by FNS Order No. ED-7-14/272@ dated April 24, 2020 (Appendix No. 1). Methods of document submission include:

• Direct submission to the tax office,
• By post with a return receipt,
• Through the taxpayer’s personal account.

Liability: For violation of the provisions of Law No. 173-FZ regarding the obligation to notify the tax authority of the opening of a foreign bank account, Article 15.25 of the Administrative Offenses Code of the Russian Federation provides for the following penalties:

• Late submission of the notification (or not in the required form): a. For individuals – RUB 1,000–1,500 (≈ €9.64 – €14.46), b. For legal entities – RUB 50,000–100,000 (≈ €482.08 – €964.15).
• Failure to submit the notification at all: a. For individuals – RUB 4,000–5,000 (≈ €38.57 – €48.21), b. For legal entities – RUB 800,000–1,000,000 (≈ €7,713.22 – €9,641.53).
• Violation of the procedure for submitting a report on the movement of funds in a foreign account: a. For individuals – RUB 2,000–3,000 (≈ €19.28 – €28.92), b. For legal entities – RUB 40,000–50,000 (≈ €385.66 – €482.08).

FNS Letter No. AC-4-2/12519 dated July 12, 2013, “On the Provision of Clarifications” defines situations that constitute violations of currency legislation: A violation of the procedure for submitting a resident’s report on the movement of funds in a foreign bank account may include:

• Inaccurate information in the report,
• Incomplete report submission,
• Failure to provide supporting bank documents or submission of improperly formatted documents,
• Report submission by an unauthorized person.

Thus, in the Republic of Belarus, only Belarusian organizations are required to notify the tax authority of the opening of an account in a foreign bank/credit (financial) institution, while in the Russian Federation, this obligation applies to both legal entities and individuals. Administrative liability for failure to notify is provided for in both countries.