Overview of tax events for May 2022

Regulatory developments

The State Duma:

• has adopted a law according to which from 1 January 2022 until the end of 2024 the profit tax benefit will be extended in respect of income in the form of intellectual property rights. For small and medium-sized enterprises and individual entrepreneurs, this benefit will be extended until the end of 2026.;

• a draft law (No. 106872-8) on the taxation of digital financial assets has been passed in the first reading. The document clarifies the procedure for collecting personal income tax, VAT and profit tax when issuing, recording and circulating digital assets and utilitarian digital rights;

• governmental draft laws ( No. 127389-8, 127370-8 и 127391-8 on uniting the Russian Pension Fund and the Social Insurance Fund have been submitted, for consideration. The new structure should be ready for work by 1 January 2023.

The Russian Government:

• has launched on its website a navigator on measures to support citizens and businesses in the face of external restrictions;

• has developed a draft resolution according to which the Federal Tax Service of Russia will be able to restrict access to information in the Unified State Register of Legal Entities and in the state information resource of accounting statements in respect of Russian legal entities to which sanctions are being or may be applied;

• has extended the deadline for financial market institutions to submit to the Russian Federal Tax Service the information required for international automatic exchange - from 31 May to 31 July 2022.

The Russian Ministry of Finance is developing changes to the system of the regional distribution of profit taxes for companies that have branches.

The Russian Ministry of Justice has registered the Order of the Federal Tax Service of Russia No. ED-7-26/236@ dated 24 March 2022, which approved the PDF/A3 format of the electronic contract.

Practice

Tax revenues in 1Q 2022 have exceeded last year's figures by 39 %.

Large businesses have expressed their readiness to switch to the Unified Tax Account (Russian acronym ‘ENS’) from 2023; many of them have already switched to the ENS in 2022.

The Russian Federal Tax Service:

• has extended the moratorium on blocking accounts until 1 July 2022 and ordered an expansion of its effect;

• local bodies continue the transition to a two-level management system.