Valery Narezhny
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29 February 2024
A new procedure for taxation of payments to remote employees, established in Federal Law No. 389-ФЗ dated 31 July 2023, was adopted in 2023 and came into force on 1 January 2024. From the changes introduced by clause 35 of article 2 of this new law that the personal income tax rate of 30% (which is standard for this category of taxpayers) does not apply to remote non-resident employees any longer.
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2 September 2022
On 1 July 2022, an experiment was launched in Russia to introduce a new procedure for paying and crediting taxes to the budget through the unified tax payment (UTP) mechanism. Currently, participating in the experiment is voluntary, but if the experiment is successful, at least a number of taxpayer categories are highly likely to be switched to making the UTP on a mandatory basis from 1 January 2023.
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6 May 2022
In early April 2022, Parliament adopted a law to create VAT exemptions for the transfer of exclusive rights if a fee for the transfer of exclusive rights to IP items is allocated in the franchise agreement price.
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26 November 2021
In September 2021, the government approved the second set of measures to support the national IT industry. The first set of measures that provided IT companies with significant tax preferences was adopted in 2020.
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30 July 2021
Federal Law 139-FZ came into force on 26 May 2021, thereby denouncing the agreement between Russia and the Netherlands on double taxation avoidance and tax evasion provisions relating to income and property tax.
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4 June 2021
In 2018 Russia adopted Federal Law 290-FZ on International Companies and International Funds, which introduced the possibility for foreign companies to 'redomicile' for the first time. A foreign company can transfer its activities to Russia in accordance with its legislation, retaining its status, structure, property and other rights and contractual obligations.
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2 April 2021
In recent years, intragroup services provided by foreign parent companies to their Russian subsidiaries have come under the scrutiny of the tax authorities.
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12 February 2021
On 1 January 2021 a number of tax law amendments introduced by Federal Law 374-FZ of 23 November 2020 entered into force. Now, the law directly states that property rights, along with other property, are exempt from taxation.
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18 September 2020
In 2020 Russia launched an intensive process of revising its bilateral tax agreements with numerous jurisdictions, including Cyprus, Luxembourg, Malta and the Netherlands.
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17 July 2020
On 23 June 2020 President Vladimir Putin announced the next set of measures to amend tax legislation to help the Russian economy overcome the crisis caused by the COVID-19 pandemic. The proposed change will be relevant for large IT companies, which due to their size cannot use special tax regimes that replace the payment of a number of taxes.
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1 May 2020
The COVID-19 pandemic and the measures taken to combat it will have a significant impact on both the global and Russian economies. The government has taken a number of measures to stop the spread of the virus, such as suspending the activities of most Russian businesses, including service providers, from 27 March until 30 April 2020. As such, the government has also had to adopt a comprehensive support programme for affected businesses, which is currently being implemented by the Russian authorities.
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13 December 2019
Over the past year, Parliament has adopted several laws amending the Tax Code regarding the taxation of legal entities. This article examines the most significant tax innovations expected in the corporate sector in 2020.
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19 July 2019
The Multilateral Convention to Implement Tax Treaty-Related Measures to Prevent Base Erosion and Profit Shifting of 24 November 2016 - also known as the Multilateral Instrument (MLI) - was drafted by an ad hoc group of the Organisation for Economic Cooperation and Development (OECD) within the framework of the Base Erosion and Profit Shifting (BEPS) Action Plan.
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10 May 2019
The Duma provides incentives to encourage businesses to operate in Russia. For example, it recently passed a law which permits Russian exporters and Russian subsidiaries of foreign companies that provide services to foreign clients and other companies within such client's groups to deduct the full amount of value added tax (VAT) for these services.
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1 March 2019
On 20 December 2018 the Federal Tax Service (FTS) approved a form of inquiry which it will use to request information from legal entities regarding their beneficial owners (Order ММВ-7-2/824).
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18 January 2019
As of l January 2019, the basic value added tax (VAT) rate has increased from 18% to 20%.
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2 November 2018
The Federal Tax Service (FTS) recently began publishing information concerning the various obligations of Russian taxpayers (ie, legal entities) and their financial reporting on its website. This practice is new in Russia, as such information was previously classified as tax secrets and, by virtue of the Tax Code, could not be disclosed. Following amendments to the legislation, the tax authorities will now actively publish this information in order to help genuine companies choose counterparties.
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21 September 2018
On 1 January 2019 Federal Law 231-FZ of 29 July 2018 will come into force, enabling the tax authorities to request client-related documents from auditors which constitute 'auditing secrets'. This law's introduction will mark the end of years of struggle by the Russian tax authorities to gain access to audit documents.
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17 August 2018
In April 2018 the Federal Tax Service (FTS) issued a letter providing an extensive explanation of the tax authorities' application of the beneficial owner of income (BOI) concept.(1) This concept was previously referred to only in the international tax treaties between Russia and other states, but has - in recent years - been actively implemented into Russian tax legislation. In this regard, the FTS's letter is of great interest, as it summarises the approach of both the courts and the tax authorities with regard to resolving BOI issues.
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1 June 2018
In April 2018 the Ministry of Finance issued an important clarification regarding the taxation of a foreign parent company's property rights to a trademark as a contribution to the charter capital of its Russian subsidiary.
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6 April 2018
Since the beginning of 2017, Russia has had a special procedure for imposing value added tax (VAT) on services provided in electronic form by foreign companies that have no branch or representative office in Russia. Such taxation features are informally known as the 'tax on Google', as they apply primarily to large internet companies.
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5 April 2018
Considerable attention is currently being paid to stimulating scientific developments in Russia, with extensive fiscal incentives offered to research & development (R&D) engineers. According to Russian tax legislation, the costs of creating new or improved products or services, which includes the costs of engineering, are included in R&D expenses.
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2 February 2018
At the end of 2017, a number of amendments to the Tax Code (Federal Law 340-FZ of November 27 2017) came into force which significantly increased the scope of information and documents that Russian divisions of some international companies must submit to the tax authorities. Through the amendments, Paragraph 13 of the Base Erosion and Profit Shifting Action Plan concerning the provision of country-b y-country reporting was implemented into national tax legislation.
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1 December 2017
The legislature is in the process of adopting a number of tax benefits intended to stimulate the development of innovative companies and marquee investments in Russia.
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18 August 2017
On June 7 2017 Russia, alongside 68 other states and jurisdictions, signed the Multilateral Convention to Implement Tax Treaty-Related Measures to Prevent Base Erosion and Profit Shifting (BEPS), which was developed to implement Action 15 of the BEPS Plan.
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The convention contains provisions that are binding for each signatory. It also contains numerous optional provisions, the application of which with respect to a particular double tax treaty (DTT) is at the discretion of each party to the DTT. -
23 June 2017
On March 23 2017 the Federal Tax Service issued a notification entitled On Identifying the Circumstances of an Unjustified Tax Benefit (ED-5-9/547@), which summarises the law enforcement practice associated with assessing the validity of a tax benefit in disputes relating to bad-faith contracting parties.
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25 April 2017
Companies may borrow necessary monetary funds – in particular, in the form of credits and loans, commodities and commercial credits. In this regard, under certain conditions, the company may have a controlled indebtedness, for which the accounting of expenses for profit taxation purposes should be made according to the special rules regarding so-called 'thin capitalisation' stipulated in Article 269 of the Tax Code.
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10 March 2017
The procedure for transferring previous years' losses to future tax periods for the purpose of calculating corporate income tax has changed substantially for 2017. Under Article 283 of the Tax Code, taxpayers that incurred losses in previous years can reduce the present year's tax base for all or part of the amount of the losses.
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22 December 2016
During 2015 and 2016 the dispute between taxpayers and the tax authorities regarding the exclusion of multinational enterprise (MNE) groups' Russian subsidiaries from the requirement to pay corporate income tax on so-called 'intra-group expenses' came under scrutiny.
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12 October 2016
Price is an important element of all contracts, and IP transactions are no exception. Due to the unique character of most transferable IP assets, it is vital to define the contractual price clearly as, in case of disagreement, it is difficult to apply civil mechanisms to determine it.
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22 July 2016
On June 15 2016 the State Duma of the Federal Assembly adopted in its third reading the Federal Law on the Amendment of Part One and Part Two of the Tax Code of the Russian Federation.
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