Overview of tax events for January 2018

REGULATORY DEVELOPMENTS

Russia has approved a draft Protocol to amend the Convention between the Russian Federation and the Kingdom of Belgium on the avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income and property.

The Convention was signed on 19 May 2015 in Brussels.

The Russian Government has submitted to the State Duma a draft law “On amending the Russian Tax Code in connection with the improvement of tax administration” (No. 346805-7).

‘Special advance contributions’ are proposed to be introduced for individuals in order to make early payment of property taxes. The legislature described the procedure of sending tax documents to those owners of real estate who do not use a ‘User account’, do not reside in the Russian Federation and have provided no contact address to the tax authorities. In such cases tax notices will be sent to the address where the property is located.

The Prime Minister of Russia has instructed the Russian Ministry of Finance and the Ministry of Economic Development together with the Russian Government Expert Council to provide the Government with proposals on how to include non-tax payments in the Russian Tax Code. The deadline is 28 February 2018.

The Russian Ministry of Finance and the Ministry of Economic Development believe that non-tax payments should be united in a separate law.

A Draft law on amending the tax system is planned to be submitted for consideration to the State Duma this spring.

Introducing VAT for foreign online stores, which has been requested by the Russian retail, is reasonable, but we need to prepare for its tax administration in order not to do harm to business, says Vice Prime Minister Arkady Dvorkovich. At the same time the threshold for duty free trade should be lowered for foreign online stores.

The Russian President took part in the meeting of the working group on the monitoring and analysis of law enforcement practice in private enterprise. The main issue was how to humanise the criminal penalty for businessmen.

PRACTICE

The Russian Federal Tax Service, in its letter No. SA-4-18/45@ dated 9 January 2018, interprets and expands upon the provisions of Resolution No. 39-P of the Russian Constitutional Court dated 8 December 2017 on collecting a company’s taxes from individuals, including its employees who have been convicted of tax offences or have been released from criminal prosecution on non-exonerative grounds.

See also: The Russian Federal Tax Service explained the procedure of recovering arrears from the company’s management.

The experiment on the labelling of medicines has been extended until 31 December 2018.

The experiment on the labelling of tobacco products commenced on 15 January 2018.

Swiss company Global Blue and entrepreneur Ruben Vardanyan will establish a joint venture in Russia to implement a tax free system in premium shopping malls.