Controlled Foreign Companies in the Russian Federation and the Republic of Turkiye

In the Russian Federation, legal regulation of the taxation of controlled foreign companies is undergoing significant changes due to the impact of unprecedented illegal sanctions imposed on our country by unfriendly countries. In response to foreign economic challenges, Russian tax legislation has focused on mitigating the consequences of sanctions and adapting the tax system for individuals and legal entities controlling foreign entities.This article analyzes the corrective measures introduced in the Russian Federation in 2022 to support taxpayers managing foreign companies. It is concluded that the essence of the changes is to encourage voluntary disclosure of information and simplify the calculation of the tax base. At the same time, regulatory amendments have increased the level of legal and financial liability, requiring taxpayers to pay particular attention to structuring their foreign asset ownership. A comparative analysis of the legal regulation of liability for violating CFC rules in the Russian Federation and the Republic of Turkey revealed comparable grounds and measures of liability, aimed at protecting the fiscal sovereignty of each state. At the same time, violations of the CFC rules in the Republic of Turkey often result in criminal sanctions, which serves as a powerful preventative tool for curbing tax abuses involving foreign entities. The updated Russian model of regulations has a distinctly anti-offshore focus.