The tax service of Russia has acquired the right to request data on bank customers

The tax service of Russia has acquired the right to request data on bank customers

In the near future, the tax service will be able to request all customer data from any credit institution. Read the full article about the threat.

The end of banking secrecy

On February 17, Vladimir Putin signed a law amending the Tax Code and thereby opened the FTS access to banking secrets of individuals. The amendment to Article 86 of the Tax Code of the Russian Federation obliges any credit organization to provide access to all information and documents about their clients within 3 days after the request. It includes:

  • Copy of client’s passport
  • A copy of the power of attorney for the disposal of the client’s funds by a third party
  • Data on the agreement for opening or closing an account (application, copy of the agreement)
  • Sample signatures and seal impressions
  • Information on operations performed (including for a certain period)

Previously, the FTS could only request information from banks as part of a tax audit

Thus, the FTS will integrate more strongly with banks, and this will necessarily entail obtaining all information about clients, its thorough analysis and the identification of unscrupulous taxpayers. Ever since the time when Mikhail Mishustin was the head of the Federal Tax Service, the trend has been towards the digitalization of the work of tax officials, as well as increasing the automated capacities of the service. In the near future, we should expect that inspectors are unlikely to send requests to the bank “manually”.

Talks about the “abolition of banking secrecy” have been going on since October 2020 – then the Russian government only proposed to expand the tax authorities’ access to banking secrecy. It was understood that the initiative “Will help whitewash the economy without affecting the interests of bona fide taxpayers.”

Expedited adoption of amendments

It is worth noting that amendments to Article 86 of the Tax Code of the Russian Federation were adopted almost at the click of a finger – the amendments were made on January 26, on the same day the bill passed the second reading, and on January 27 it was already approved. On February 10, it was approved by the Federation Council, and a week later it was signed by the GDP.

In this case, we can only praise the lightning-fast work of the legislative apparatus of the Russian Federation. Moreover, a public discussion of amendments to Article 86 of the Tax Code of the Russian Federation was avoided due to the fact that initially they concerned tax control over prices and the procedure for concluding pricing agreements.

The Ministry of Justice opposed the initiative:

It is not clear for what purposes the tax authorities are empowered to request the above list of documents and information at the bank’s disposal, since the submitted materials do not contain arguments for the provisions introduced by the draft amendments.

Bonus: Russians are willing to pay additional taxes

On February 18, 2021, the Higher School of Economics published a study that claims that 60% of Russians are willing to pay additional taxes and fees, but on the condition that they go to health care, education, pensions or road construction under public supervision.

* The research was conducted in the last months of 2020 among 6,000 respondents aged 15 to 72 years from 173 settlements of the Russian Federation.

According to open data for 2020, 4.5% of the federal budget of the Russian Federation was allocated for health care and 4% for education. For comparison, spending on national defense, national security and law enforcement activities amounted to 38% in total (4.8 / 6.6 / 26.6%, respectively).

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