The tax authorities in Russia classify foreign real estate owners who collect rent into foreign accounts as individuals engaged in entrepreneurial activity. This interpretation has been reported by Vedomosti, a respected business paper.
According to the publication, a Moscow resident who owns six commercial properties in Germany faced a financial penalty after renting them out and receiving payments through a foreign banking channel. The arrangement triggered scrutiny under currency control rules.
The Federal Tax Service treated this as an illegal currency transaction because the funds did not flow through a Russian bank. The individual was fined thirty percent of the gross rent received.
Officials argue that repeatedly earning income from rentals abroad constitutes business activity. In their view, a person operating in this way is treated as an individual entrepreneur, and the same regulations that apply to legal entities are extended to individual entrepreneurs. By current rules, earnings in foreign currencies should be redirected to an authorized Russian bank for reporting and settlement.
The expansion of oversight stems from growing challenges in exchanging financial information with other countries, which complicates the tracking of cross-border income and currency flows.
Earlier, the Bi-2 music group was fined 588 dollars in Thailand for related financial irregularities, marking another instance of how cross-border earnings are scrutinized by authorities.
In related enforcement activity within Russia, broader penalties have also been issued in other high-profile cases, underscoring the seriousness with which foreign-source income is approached by regulators.