The Federal Tax Service of Russia (“FTS”) has prepared a draft update of the “black list” of jurisdictions subject to the law on controlled foreign companies (“CFCs”). The list is supposed to come into force on April 1, 2016.

The list is generally comprised of countries that do not have agreements on information exchange with Russia as well as jurisdictions that do not reply to all queries, though such agreements are present, and have not established practice of information exchange with Russia.

Please note that the “black list” is applied under the law on CFCs that obliges shareholders of CFCs established in the “black list” jurisdictions to pay taxes on undistributed profits (13 and 20 per cent for natural persons and legal entities, accordingly).

Initially, 119 countries and 18 territories were on the list, including even such non-offshore jurisdictions as Austria, the United Kingdom, Switzerland, and Brazil.

The updated list consists of 111 countries and 22 territories and no longer includes Austria, the United Kingdom, and Switzerland. Abkhazia, Israel, Lebanon, Malta, and South Ossetia are neither “black-listed” any more. However, Angola, Greenland, Taiwan, the Faroe Islands, Guam, Puerto Rico, and the Virgin Islands (USA) will be on the “black list.”

The full update on the list of offshore jurisdictions (in Russian) may be found on http://regulation.gov.ru/Files/GetFile?fileid=e27e7334-2491-4d62-adeb-15dbc94025f8