Money laundering regulations (нормативно-правовые акты) and the effect on international tax and financial planning

It has become quite apparent that, due to the introduction of new tough US laws and European Union directives against money laundering, this will have an effect on international tax and financial planning, as there is an enormous pressure on tax havens and other low-tax jurisdictions to respond to various international initiatives to combat money laundering, otherwise they will be blacklisted (попадут в черный список).

To be successful, it is necessary to be in line with international standards and have a high level of banking supervisory and regulatory standards (соответствие международным стандартам качества, строгость надзора за банковской деятельностью и регламентирующих ее норм / высокие стандарты банковского надзора и регулирования) which apply to the international banking and financial services sectors.

The current climate shows that there will be a shift in international tax and financial planning to those respectable, safe, reputable jurisdictions that have in place not only a high level of banking supervisory and regulatory standards and strict money laundering laws, but also to those that have an extensive network of Double Tax Treaties (Договоры об избежании двойного налогообложения) with other countries and offer low tax rates (низкие ставки налогообложения) and other tax incentives (налоговые льготы). One should not operate anywhere but these safe jurisdictions.

5. Double Tax Treaties are an important product of the efforts made worldwide to promote and stimulate international trading and investment activities. An international enterprise doing business in more than one tax jurisdiction significantly increases the cost of its operations (повышение стоимости затрат / стоимости деятельности предприятия). To remedy this, many countries have concluded bilateral agreements (заключили двусторонние договоры), called Double Tax Treaties, for the allocation of fiscal jurisdiction (определение налоговой юрисдикции). More specifically, the objectives of Double Tax Treaties are to clarify and determine the taxing rights of each contracting country (страны-участницы Договора), to reduce or avoid double taxation and to introduce mechanisms to prevent tax evasion.

Ex3. Decipher the following abbreviations and translate the resulting terms/terminological collocations. Make use of specialized dictionaries. Explain the meanings of (1) the English terms in Russian and (2) the Russian terms in English for other students to translate in class.

1) VAT, CGT, GST, CTT, IHT, TESSA, TIN, TDA, TAB, TAN, GAAP, FASB, OECD, IMF, EITC, HMRC, EBITDA, SE, EPT, AMT, EAT, IRS.

2) НДФЛ, ФОТ, ФНС, НДПИ, НДС, ИНН, ЕСН, ОНА, НК РФ.

Ex.4. Look up the meaning of the terms below in specialized dictionaries. Insert the terms into the blank spaces in the text. Summarize the information both in English and in Russian.

Terms: a) higher tax brackets; b) indexed to inflation; c) effective tax increases; d) collected; e) federal payroll taxes; f) the amount of tax withheld; g) expected annual salary; h) refunded by the government; i) individual income; j) underpayment of estimated tax; k) impose tax on their citizens; l) taxable income; m) double taxation; n) income limits; o) tax deductions or tax credits; p) spending from the account; q) receipts.

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