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The Federal Tax Service reports that from 1 January 2018, Federal Law dated 28 December 2017 N 427- FZ “On Amendments to the Federal Law “On Currency Regulation and Currency Control” (hereinafter, Law N 427- FZ), amended the concept of currency residency for individuals and eliminating certain excess burdens for individuals - residents when performing currency operations using accounts (deposits) opened in banks outside the territory of the Russian Federation (hereinafter referred to as foreign accounts (deposits)).

Law N 427-FZ introduces a new version of subparagraph "a" of clause 6 of Part 1 of Article 1 of the Federal Law of 10.12.2003 N 173- ФЗ "On Currency Regulation and Currency Control" (hereinafter, Law N 173- FZ), providing for the extension of the concept "currency resident" on all individuals who are citizens of the Russian Federation, regardless of the duration of their stay in the territory of a foreign state.

The new wording of part 2 of article 12 of Law N 173-FZ supplemented the definition of a tax authority to which a resident is obliged to provide a notification of opening (closing) accounts (deposits) and on changing account (deposit) details (hereinafter referred to as notification), including when an individual has no place of residence (stay) and (or) real estate in the territory of the Russian Federation.

The Federal Tax Service of Russia, on the website regulation.gov.ru, has posted the text of the draft order of the Federal Tax Service of Russia "On the tax authority, to which notifications of opening (closing), on changing account (deposit) details in a bank located outside the territory of the Russian Federation, on the existence of a bank account outside the territory of the Russian Federation, opened in accordance with a permit, which has been terminated, are to be submitted by a resident individual in the absence of his / her place of residence (place of stay), real estate in the territory of the Russian Federation."

From 1 January 2018, resident individuals, whose stay outside the territory of the Russian Federation during the calendar year amounted to more than 183 days in total, according to the new wording of part 8 of article 12 of Law N 173-FZ, are exempt from the obligation to notify tax authorities of the opening (closure, change of details) of foreign accounts (deposits), as well as from the obligation to submit reports on the movement of funds on foreign accounts (deposits) (hereinafter, reports). In addition, this category of resident individuals is entitled to carry out currency operations on their foreign accounts (deposits), including among themselves, without any restrictions.

At the same time, a procedure has been established for submitting notifications and reports of resident individuals, whose stay outside the territory of the Russian Federation in the past calendar year was less than 183 days in aggregate, and which had not previously provided notifications and reports.

These changes, according to part 2 of article 2 of Law N 427-FZ, are extended, including, for the period of 2017. Law N 427- FZ introduced amendments in the third paragraph of part 4 of article 12 of Law N 173- FZ with regard to the exclusion of the obligation of resident individuals to present, when making the first transfer of funds to their foreign accounts (in deposits), to the authorized bank notifications of the tax authority of opening an account (deposit ) with a mark of acceptance of the specified notice.

In addition, Law N 427-FZ expanded the list of allowed cases, specified in part 5.1 of article 12 of Law 173-FZ, for crediting funds to foreign accounts of resident individuals from selling to non-residents under sales agreements of vehicles that has been in their ownership, as well as real estate located outside the territory of the Russian Federation, provided that such real estate is registered (located) in the territory of a foreign OECD or FATF member state and such foreign state has joined the Multilateral Agreement of Competent Authorities for the Automatic Exchange of Financial Information of 29.10.2014 or has with the Russian Federation an international treaty providing for the automatic exchange of financial information, and in this regard the account (deposit) of resident individual is opened in the bank located in the territory of such foreign state.

According to the new wording of the second paragraph of Part 6 of Article 12 of Law N 173-FZ, resident individuals have the right to carry out currency operations without restrictions using funds credited in accordance with Law N 173-FZ to foreign accounts (deposits) except for the prohibited currency operations between residents.

Law N 427-FZ amended paragraph 14 of part 4 of article 23 of Law N 173-FZ to supplement the right of currency control agents, within their competence, to request and receive from residents and non-residents documents (copies of documents) related to the conducting of currency operations, opening and maintenance of accounts in terms of requesting documents confirming the fact of the presence of resident individuals outside the territory of the Russian Federation; documents confirming the facts of entry into the Russian Federation and (or) departure from the Russian Federation.

The departments of the Federal Tax Service of Russia for the regions of the Russian Federation are instructed to bring this letter to the lower tax authorities.