Landlords that are owners of retail real estate will be able to obtain a deferral for the payment of property taxes

On 16 May 2020, the Russian Government’s Resolution No. 699, was adopted which amends the previously established Rules for granting a deferral (instalment plan) for the payment of taxes, advance payments on taxes and insurance contributions[1] (the “Rules”).

These amendments introduce support measures for landlords who own retail real estate and who have granted a deferral of rent to tenants from the affected sectors of economy.

Items to which a deferral applies

A deferral can be granted to companies or individual entrepreneurs who have granted a deferral of rent to tenants with regard to retail facilities pursuant to Resolution No. 439 of the Russian Government dated 3 April 2020 “On establishing requirements for the conditions and deadlines for the payment of rent under lease agreements for immovable property”. The deferral of rent should be provided to a tenant from the affected sectors until 1 October 2020.

The taxes with respect to which the deferral is granted

The deferral can be granted only with regard to property taxes and advance payments on them, the deadline for payment of which expired in the period from 1 January until 31 December 2020:

  • corporate property tax;
  • land tax;
  • personal property tax.

The deferral is not granted with regard to payments of profit tax, VAT, excise duties, mineral extraction tax, and insurance contributions.

Terms and conditions for obtaining the deferral

In addition to the grounds established by the Rules for landlords, the following requirements have been introduced for obtaining the deferral:

  • The code the principal activity of the taxpayer pursuant to the Unified State Register of Legal Entities or Unified State Register of Individual Entrepreneurs (abbreviated in Russian as EGRUL and EGRIP respectively) as at 1 March 2020 corresponds to code 68.2 “The renting out and management of one's own and of rented immovable property”
  • the taxpayer owns a retail real estate item located on a land plot of which the type of permitted use provides for the placing of the corresponding facilities.

comment.jpgLandlords owners of retail real estate in Moscow who in addition to granting a deferral of rent have decreased its amount may, in addition to a deferral of taxes, also claim grants from the Moscow city budget in accordance with the Moscow Government’s Resolution No. 574-PP dated 13 May 2020.

[1] Approved by Resolution No. 409 of the Russian Government dated 2 April 2020 “On measures to ensure the sustainable development of the economy”. 

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