КИК reporting — where the notification is owed even when the profit is not.
Russia's CFC rules catch more people than they expect, particularly residents who kept foreign company ownership after relocating. The notification is required whether or not the company made a profit, whether or not tax is due — and the trap is assuming that no profit means no filing. We handle the notification, the profit calculation where it bites, and the lump-sum election where it saves money.
Russia's Controlled Foreign Company rules — КИК in Russian — have been in force since 2015, and they catch more foreign-connected residents than expect to be caught. The most common trap is simple: the annual notification is required whether or not the foreign company made a profit, whether or not any tax is due. "We made no money, so there was nothing to file" is not a defence — it is the precise fact pattern that generates penalties.
You control a CFC, and owe the obligations, if you are a Russian tax resident and any of the following is true. The third is the one people miss.
You hold, directly or indirectly, more than 25% of a foreign entity — or more than 10% where Russian residents together hold more than 50%.
You exercise de facto control regardless of formal percentage — real influence over decisions through contract, shareholder agreement or otherwise. This catches people below 25%.
The rules reach companies, partnerships, trusts and foundations alike; foreign trusts with Russian-resident settlors or beneficiaries are covered.
The notification is always required — filed annually with the FTS by any resident who owns or controls a foreign entity, profit or none. Profit reporting is separate: where the CFC's profit under Russian rules exceeds RUB 10 million in a year, that profit is added to your Russian tax base. Individuals can instead elect a fixed lump-sum payment of RUB 5 million a year covering all their CFCs — which stops making sense above roughly RUB 38.5 million of profit, and never removes the notification obligation.
We establish whether you are a controlling person at all — including the de facto question — file the notification that is always due, calculate CFC profit where it crosses the threshold, and model the lump-sum election against actual reporting. Where there is history to clean up, particularly for residents who kept structures after relocating, we handle the disclosure.
Whether you are a controlling person at all — the 25% and 10%/50% tests, and the de facto control that catches people holding far less on paper.
The annual notification every controlling person must file — the obligation that exists regardless of profit and whose omission generates most CFC penalties.
CFC profit computed under Russian rules where it exceeds the threshold, from statutory accounts or Russian tax accounting, with the available exemptions applied.
The fixed RUB 5m annual election modelled against actual profit reporting — it covers all your CFCs but stops paying above roughly RUB 38.5m of profit.
You relocated after 2022, kept a foreign company, and are not sure your CFC obligations ended.
Your foreign company made no profit and you assumed there was nothing to file.
You hold under 25% but effectively run the company, and are not sure that counts.
You have several CFCs and want to know if the lump-sum election saves money.
Recognise your situation? The CFC notification is owed even with zero profit — and "we made no money so we didn't file" is exactly the position that generates penalties.
30 minutes with a senior adviser — or send a note instead, if you would rather write.
The client had moved abroad, kept a dormant foreign holding company, and filed nothing for two years on the reasonable-sounding basis that it earned nothing. They had remained a Russian tax resident for one of those years, which meant a notification was owed — profit or none. We filed the outstanding notification, established that the dormant company fell below the profit threshold so no tax arose, and disclosed the position before it was found. The exposure was procedural and we closed it cleanly.
Whether you are a controlling person — ownership and the de facto question both.
The annual notification filed, because it is owed regardless of profit.
CFC profit computed where it crosses RUB 10m, exemptions applied.
Lump-sum election modelled against actual reporting and filed if it wins.
Yes. The CFC notification is required of every controlling person annually, regardless of whether the company made a profit or any tax is due. Assuming that no profit means no filing is the single most common CFC error, and it generates penalties. Profit reporting is a separate obligation that only arises above RUB 10 million.
Possibly. Beyond the 25% test (and a 10% test where Russian residents together hold over 50%), the rules apply to anyone exercising de facto control — real influence over the entity's decisions through contract, shareholder arrangements or otherwise — regardless of formal percentage. Control, not just ownership, is the test.
Russian individual residents can elect a fixed RUB 5 million annual payment in lieu of calculating and reporting actual CFC profit. It covers all your CFCs and removes the profit-calculation burden, but not the notification obligation. At the 13% rate it corresponds to about RUB 38.5 million of profit — above that, actual reporting is cheaper. It must be actively elected and applies until you opt out.
If you remained or became a Russian tax resident for the year, yes. Many people who relocated after 2022 and retained foreign ownership still have CFC obligations, and the notification requirement in particular does not disappear because you left. It is worth checking the position for each year rather than assuming.
Yes — we prepare disclosures and filings to bring your position current and mitigate penalties where possible.
By email, WhatsApp, Telegram or WeChat. Describe your situation briefly — we don’t need everything upfront.
A named adviser replies — not a generic inbox. We confirm whether we can help and propose a call if needed.
We ask about your situation, Russian entity structure and what you need. No charge. In English, Russian or Chinese.
Clear scope, fee and timeline. We start on receipt of the signed letter. No retainer lock-in on project work.
Practical support for international business in Russia.