Legal alerts

Legal alerts

23 June 2021
New Amendments to the Tax Legislation.

Legal alerts

The State Duma adopted several amendments to the Tax Code of the Russian Federation. They relate to VAT, personal income tax, and some other issues. The changes will oblige Russian residents to withhold and pay VAT from foreign suppliers who do not have a tax registration in Russian Federation It also introduces a list of taxable income of foreign companies that are not related to carrying out business activities within Russia.

The draft law makes adjustments to excise taxes for 2024, taking into account the expected inflation rate, and excise taxes on gasoline and clarifies the procedure for the reverse excise duty on liquefied petroleum gases.

In addition, it clarifies the procedure for transmitting information about interest payments on deposits to the tax authorities for calculating personal income tax.

Now, additional tax deduction criteria will also include gratuitously rendered services and gratuitous transfer of property by state and municipal authorities, and SME development corporations.

On top of that, the draft exempts food service establishments from VAT. To be able to use the exemption, a company's income for the previous calendar year should not exceed 2 billion rubles and more than 70% of its total income should account for public food services.

The State Duma Adopted the Investment Protection Law.

On June 16, the draft law passed through the third final reading: it will enshrine in law the concept of Investment and Pre-investment Stages of a project and clarifies other criteria for concluding an agreement on investment protection.

The investment stage means the period of time from the beginning of construction work on a real estate unit to its commissioning or from the beginning of work on the item of intellectual property to its registration.

The pre-investment stage of the project will begin from the moment when a decision on the implementation of the project is made and lasts until the start of the investment stage.

The document additionally specifies the criteria that an investment project should meet in order to be qualified as related to culture, sports, environmental protection, etc. If the project can be attributed to several areas, the area for which the largest amount of investment is set should be applied when concluding an investment protection and promotion agreement.

The draft law contains a number of criteria for reimbursement of investors' expenses related to the conclusion of such agreements, a list of purposes for which funds can be allocated, the procedure for applying stabilization clauses, etc.

The Federal Antimonopoly Service Will Get Access to the System for Monitoring Labeled Goods.

The FAS will get access to the state system for monitoring the turnover of goods subject to mandatory labeling. The agency has signed an information cooperation agreement with the Ministry of Industry and Trade and the operator of the state information system for monitoring the turnover of goods subject to mandatory identification labeling.

Thus, the agency plans to conduct market research in digital form, without additional burden on business, as well as more effectively monitor compliance with antitrust laws. This step will also allow monitoring the conclusion of anti-competitive agreements and price manipulation in the markets of turnover of goods subject to mandatory labeling.

All Individual Entrepreneurs Have to Use Cash Registers from July 1, 2021.

On July 1, the deadline assigned to individual entrepreneurs for the implementation of cash register equipment by Federal Law No. 129-FZ of 6/6/2019 will end. Therefore, all individual entrepreneurs who sell goods of their own production and who do not hire employees will have to use cash registers.

After July 1, 2021, the deferral cannot be used anymore.

Grounds for Refusing to Accept Tax Returns Are Introduced to the Tax Code.

The Federal Tax Service has stipulated in the Tax Code the cases when inspectors may refuse to accept tax returns:

• A company submitting the tax return is excluded form Unified State Register of Legal Entities;
• There is an error in the calculation of insurance premiums;
• The registry office has a record of the death of the signatory;
• The tax return is submitted or signed by a person who does not have the authority to sign it;
• The VAT declaration does not correspond to the control ratios of the Federal Tax Service.

At the moment, the grounds for refusal are stipulated in the Administrative Regulations of the Federal Tax Service. Until the changes come into force, the Federal Tax Service has more reasons to refuse to accept tax returns, for example, if the submitted statements do not conform to the established form or if the tax statements do not have the signature of an authorized person, etc.

Draft Law on Activities of Foreign IT Companies Introduced to the State Duma: What Russian Business Should Know in This Regard.

It is planned to regulate foreign companies in the Runet (Russian Internet) by a separate law. It will affect those resources that have a daily traffic of more than 500 thousand users from Russia.

The owners of such services will have the following obligations:

• To establish a branch, representative office, or Russian legal entity. These structures will have to meet several requirements, such as restricting access to prohibited information (Article 7 of the draft law).
• To place a form on the resource for sending requests from Russian individuals and legal entities. The requirements for the form will be set by Roskomnadzor (the Federal Service for Supervision of Communications, Information Technology and Mass Media);
• To register a personal account on the Roskomnadzor website for interaction with government agencies.

If the service violates the law, the authorities may prohibit the distribution of advertising on the resource, block it, or restrict money transfers and the acceptance of payments from Russian payers.

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