Overview of Tax Events for December 2018

REGULATORY DEVELOPMENTS

The State Duma (the lower chamber of the Russian Parliament) has adopted the following laws:

• a law aimed at systematising and regulating the procedures of control, accounting and assessment of tax incentives within the budgetary process. The Russian Federation, regions and municipalities are obliged to make a list of tax costs and assess such costs annually;
• a law to establish a unified information system for labelling goods which will make it possible to control the movement of such goods from a producer to the end user.

Additionally:

The Russian Government has approved the Concept for the establishment and functioning of the system of labelling and tracking the movement of goods. Its goal is to reduce the volumes of illegal circulation of industrial products. It is necessary to combat counterfeit products in the context of improved collection of taxes, customs duties, etc.

The Russian Government has put before the State Duma a draft law to ratify the Protocol to amend the Convention between the governments of Russia and Sweden on the avoidance of double taxation with respect to taxes on income.

The issue of movable and immovable property was discussed during a meeting of the Russian President and business. The Russian Finance Minister reported that facilities in respect of which a construction permit has been obtained will be primarily classified as immovable property.

PRACTICE

The Performance Plan of the Russian Federal Tax Service has been approved for 2019. The main tasks include the following:

• implementing measures to establish a federal governmental information system for generating and maintaining a federal resource relating to the population;
• raising the efficiency of collecting and settling arrears in mandatory payments;
• improving the operations of tax authorities involving registration of cash register equipment and control over how such equipment is used;
• further work on improving information exchange between tax and customs authorities.

The Federal Tax Service has published its “Recommendations on how the business community should sign agreements, charters, memoranda and other documents in the area of combating illegal circulation of industrial products”. The goal is to establish an organisational and legal framework for combating illegal circulation of industrial products and to jointly implement measures aimed at reducing the volumes of illegal products.

The Federal Tax Service is ready to share, with business, data from the ASK-VAT-2 control system. Since disclosure of such information is protected by tax secrecy, it is possible with the consent of the company itself. Business will be able to do this starting from 25 October.

It is now possible to pay taxes for third parties on the official website of the Federal Tax Service.

The Federal Tax Service has been preserving a positive trend in reducing the number of tax disputes in 2018. The number of claims considered over the first 9 months of 2018 dropped by 9.5% as compared with the same period of 2017. The number of claims against decisions adopted based on desk and field audits declined by 16.6% and 21.3% respectively, as compared with the period from January to September 2017. At the same time, the number of judgments adopted by courts of first instance under tax disputes that underwent pre-trial settlement decreased by 6.4% as compared with the corresponding period of 2017.

The Russian Constitutional Court has supported business: reorganisation or affiliation of a company cannot serve as a ground for denying a corporate property tax benefit. Companies that have obtained movable property that is not taxable with the original owner cannot be denied the benefit.

The Chairman of the Russian Supreme Court has announced that the Supreme Court's Plenum will issue explanations in 2019 with respect to criminal liability for tax crimes.