Overview of tax events for December 2020

Regulatory developments

The Russian President has signed the following laws:

• a law amending the procedure for tax control in the form of tax monitoring;
• a law detailing the procedure for applying the zero rate of corporate profit tax when shares are sold;
• a law that ratifies the Protocol on amending the DTT between Russia and the Grand Duchy of Luxembourg;
• a law that ratifies the Protocol on amending the DTT between the Government of Russia and the Government of the Republic of Cyprus.

Something to consider:

Russia “will not depart from its course” with regard to the denunciation of the double tax treaty with the Netherlands, according to the Minister of Finance Anton Siluanov.

The Russian Government:

• has put before the State Duma a draft law whereby digital currency is acknowledged as property and is subject to personal income tax;
• is planning to restore movable property tax, which has been abolished since 1 January 2019.

The Finance Ministry has prepared proposals on how to expand the “exchange of secret information” between the Russian Central Bank and Federal Tax Service.

Case law

The Federal Tax Service has approved:

• the List of foreign states (territories) with whose competent authorities it automatically exchanges country reports;
• the List of states (territories) with which it automatically exchanges financial information.

The Presidium of the Government’s commission for digital development, the use of information technologies for improving the quality of life and the conditions for conducting entrepreneurial activities has approved the Concept of an electronic document management system for business and the action plan to implement it. The Concept has been developed by the Federal Tax Service together with stakeholders including public authorities and representatives of the business community.

On labelling:

• a rule on labelling tyres came into force on 15 December 2020;
• rules for labelling dairy products have been approved;
• the testing has begun of the system for labelling jewellery items;
• Russia will conduct an experiment involving the labelling of biologically active supplements.

Over the three years that article 54.1 of the Tax Code has been in force, which determines criteria for an unjustified tax benefit, only 22% of court disputes involving this article have been resolved in favour of businesses. It is in extremely rare instances that tax authorities agree to tax reconstruction.

During the XIII Plenary Meeting of the OECD’s Forum on Tax Administration the head of the Russian Federal Tax Service D.V. Yegorov presented a draft report Tax Administration 3.0 with the changes of the tax functions and services that are anticipated to take place in the next 10 years, and reported on the work of the Digital Transformation Community.