Foreign organizations or their branches/representative offices after completing successfully the procedure of accreditation often make decisions on changing some important data. All the changes should be applied in the Register of accredited branches and representative offices.
The data that needs to be changed:
- information about the foreign legal entity;
- information about the bank in the country of registration (incorporation);
- information on the name of the branch/representative office;
- information about the address of the branch/representative office;
- information about the codes of activities in the Russian Federation;
- information about the Head of the branch/representative office;
- information on the number of foreign employees.
According to the legislation of the Russian Federation, documents confirming the appropriate changes must be submitted to the tax authority within 15 calendar days from the date of changing, and within 10 working days tax authority applies new data into the Register (Federal Law «On foreign investments» art. 21).
The problem of this procedure lies in the fact that not all organizations have time to submit the documents within the statutory period, as the procedure of making them meet the requirements of Rules of accreditation takes quite a long time. On this basis, the tax authority shall issue the refusal to amend.
According to the rules of accreditation, documents confirming the appropriate changes should be submitted to the tax authority, if legalized or apostilled, in Russian or in a foreign language, with the translation into Russian language certified as prescribed by the law (4).
Let us consider the following case study: an accredited Branch of a company from the UK has decided to change the Head of the Branch office. The decision was made in full accordance with Russian law (Sec. 2, Art. 278 of the Labor Code) and the Regulations of the Branch office. According to the Regulations: «The Company may revoke its appointment and appoint a new Head of the Branch office at any time at its own discretion».
Due to the fact that the procedure of bringing the documents in accordance with the requirements took more than 15 days, the tax authority issued a refusal to change the information.
Failure in changing data of the Branch/Representative office may have a negative impact on the company’s future. Art. 15.6 of the Administrative Code provides a penalty for non-submitting the information required for tax control, for citizens in the amount of 100 to 300 rubles, for officials — from 300 to 500 rubles.
n addition, it turns out that the registry contains «unreliable» information on the Branch/Representative office. Illegal un-informing (inconvenient informing), by the entity, of the data that the person must contribute to the tax authority shall entail a fine penalty of 5 000 rubles (Art. 129.1 of the Tax Code).
To avoid such situations, our company recommends to not delay the submission of the documents confirming the changes. Bringing documents into the accordance with the Rules of accreditation depends on how soon the documents will be obtained, and that helps to avoid receiving the refusal, saves your time and money.