Gérard Depardieu, icon of French cinema, recently became a Russian citizen by Vladimir Poutine. If he has not yet confirmed his move to Russia, or to Belgium, he still remains at the heart of the political debate on fiscal expatriation.
What advantages does Russian taxation offer?
The tax rate in Russia is based on a very simple principle: everyone pays the same percentage of his income, whether they are rich or poor. The rate is 13%, and for non-residents: 30% (given that one must live on the national territory for 6 months and a day to be considered a resident). The difference is significant compared to France, where it is possible to be taxed at 75%. On paper it would certainly seem more beneficial to choose Russian taxation. A word of caution however, Russian tax laws only concern income earned in Russia. . .
A partial expatriation
If Gérard Depardieu actually lived in Russia, Russian tax authorities would only levy taxes on income gained from his activity in the country. Income derived from his French heritage will always be payable to the French state and taxed according to the Nation’s tax rates. A detail that is far from negligible because the actor possesses a country house in the Val-de-Loire, a villa, a mansion in Paris, un vineyard and shares in many restaurants. All of these possessions will remain taxable at the legal rate in France.
The actor’s move to Russia comes into focus in terms of fiscal gain with respect to his income from the cinema. In 2012, the actor paid 787,350 euros of taxes to the French government, uniquely on his income from the cinema. To be eligible for Russian taxes from now on, the actor will be obliged to work with foreign producers. A move that will generate considerable savings, even if the modalities may not necessarily be so ideal. Time will tell. Perhaps the decision of Gérard Depardieu to leave France was not based solely on economic motives?
This controversy reminds one that it is always important to be informed about the tax requirements of the destination country when opening an offshore account.