The automatic exchange of financial information is a multilateral obligation of countries that have acceded to the Multilateral Agreement to share information on the financial accounts of their respective residents on an annual basis.
As part of the automatic data exchange process competent authorities being parties to the Multilateral Agreement between jurisdictions will:

1. Receive information from financial institutions of their countries on the accounts maintained by individuals and legal entities being residents of other countries that are parties to the Multilateral Agreement;
2. Disclose that information to the competent authorities of other countries that are parties to the Multilateral Agreement;
3. Receive from the competent authorities of the countries that are parties to the Multilateral Agreement information on the accounts maintained by individuals and legal entities being residents of their country.

However, in addition to signing the Multilateral Agreement, the contracting countries must enter into bilateral agreements with each other to enable the automatic exchange of information. To date, more than 2,000 bilateral agreements have already been executed. No bilateral agreement has been executed by Russia so far.

In accordance with the Common Reporting Standard, an active company is a company whose passive income generated during the past calendar year was less than 50% and total assets generating passive income or intended to generate it were less than 50% over the same period. If passive income is more than 50%, then the company will be considered a passive one.

The competent authorities of a country in which an active company maintains an account will report information on its accounts only to the company’s country of domicile and to the country where the company is actually located. However, in case of a passive company, in addition to reporting information on the company’s account to its country of domicile, information on its beneficiary, who is an individual, must be reported to such person’s country of tax residence.
According to the Commentary to Section VIII of the Common Reporting Standard, passive income means a portion of total income that includes:

1. Dividends;
2. Interest;
3. Income similar to interest;
4. Rent payments and royalties;
5. Annuities;
6. Amount by which income exceeds losses as a result of selling or exchanging financial assets that generate passive income;
7. Amount by which income exceeds losses as a result of transactions in any financial assets (including future, forward, option and similar transactions);
8. Net income from swap transactions, etc.

Information about both newly opened and existing accounts (Preexisting Entity Accounts) will be automatically exchanged. The Common Reporting Standard exempts from the automatic exchange process existing accounts maintained by legal entities whose aggregate balance does not exceed $ 250,000 as of December 31 of the relevant year. Therefore, no information on such accounts will be reported.
There is no threshold for individuals; however, first of all, information will be collected on Higher Value Accounts, i.e., accounts whose aggregate balance is greater than $ 1,000,000 as of December 31 of the reporting year or December 31 of any subsequent year.

Information that must be automatically exchanged includes (Clause 2, Section 2 of the MCAA):

1. Name of individual, name of legal entity, TIN, date and place of birth of individual, address of legal entity as well as the names, TINs, dates and places of birth of individuals controlling the relevant legal entities (once the due diligence is completed by the competent authorities in accordance with CRS);
2. The account number (or functional equivalent in the absence of an account number);
3. The name and identifying number of the reporting financial institution (bank);
4. The balance of the account as at the end of the relevant calendar year or at the time the account was closed if the account was closed during that year;
5. Information on Custodial Accounts

The beneficiary of a foreign company, a resident of the Russian Federation, who has an account in a foreign bank, according to the legislation of the Russian Federation must notify the Federal Tax Service of the participation in a foreign organization, of the presence of the CFC and pay income taxes on such a company.

According to Article 129.6 of the Tax Code, in case of failure to notify, the beneficiary faces sanctions, namely:
1. For failure to notify of participation in a foreign organization or for a notification containing inaccurate information, the penalty is 50 000 rubles.
2. Failure by a controlling person to submit a CFC notification in due time or submission of a notification containing inaccurate information shall entail a penalty of 100,000 rubles.
Pursuant to Article 129.5 of the TC RF, failure to pay or incomplete payment by a controlling person who is a taxpayer - individual or organization, of the tax amounts resulting from failure to include the share of profit of the controlled foreign company in the tax base entails the imposition of a penalty in the amount of 20 percent of the amount of unpaid tax in respect of the profit of the controlled foreign company.

However, profit of a CFC shall be taken into account in the tax base of a controlling person only if it exceeds the threshold provided for by legislation for a tax period. Namely:
50 million rubles for 2015;
30 million rubles for 2016;
10 million rubles for 2017 and subsequent years.
The legislation also provides for several grounds for exemption of CFC profit from taxation. In particular, profits of active foreign companies are exempt from tax.