Overview of tax events for July 2020

Regulatory developments

The Russian President has signed the following laws:

• easing sanctions for breaching foreign currency legislation;
• on implementing a tax manoeuvre in IT industry: starting from 2021, corporate profit tax will be reduced from 20% to 3%, while the rate of insurance contributions will be cut from 14% to 7.6%;
• on establishing a preferential regime in the Arctic for companies that intend to implement new projects there.

The law has been adopted to change the rules of how cadastral value should be applied, including it being used for the taxation of real estate.

The Russian Government:

• does not discuss the introduction of a turnover tax;
• has submitted the following draft laws to the State Duma:
• No. 991147-7 on establishing a national tracking system for goods;
• No. 991161-7 aimed at supporting print outlets and book publishers;
• decided not to postpone the deadlines for introducing mandatory labelling of medicines, shoes and cigarettes (has been introduced since 1 July 2020);

For information:

The Russian Ministry of Industry and Trade is working through the proposal regarding digital labelling of toys.

The federal portal of draft regulatory acts has a draft law on supplementing the Tax Code with a section in connection with improvements made in exercising control over settlements. It is expected that Law No. 54-FZ regarding cash register equipment will be transferred into the Code.

The Russian Ministry of Finance:

• published a draft law with which it wants to close a loophole allowing for dividends to be transferred to offshore jurisdictions without any taxes – to make taxpayers pay such taxes as if the money was owed to a Russian company and take advantage of the benefits that are applied in Russia;
• refused to forgive VAT arrears to owners of office centres and shopping malls on the payments that were not received from the tenants.

Russia will not raise taxes, as opposed to countries that gave out so-called ‘helicopter money’, said Daniil Egorov, deputy head of the Russian Federal Tax Service.

The tax relationships between Cyprus and Russia will change starting from 2021. A new double tax treaty is expected to be signed in September.

Practice

The Russian Ministry of Labour allowed companies to refund their costs on purchasing medical masks and protective gloves for their employees out of insurance contributions.

The Russian Ministry of Finance is planning to increase the volume of collected taxes.

Experts have come up with three scenarios of a European climate tax being introduced for goods imported from Russia.

According to Resolution No. 38-P of the Russian Constitutional Court, the erroneous applications of citizens for tax refund cannot be treated as an offence (tax fraud).

The Federation Council has appointed I. Podnosova as deputy chairman of the Russian Supreme Court and a chairman of the Judicial Board for Economic Disputes.

The Resolution of the Russian Supreme Court’s Plenum orders that conclusions of first-level courts and of courts of appeal should be checked as to their consistency with the legal positions of the Russian Supreme Court.

Top 5 tax disputes for the first half of 2020.

According to the General of the Investigative Committee of Russia Elena Leonenko: the inevitability of punishment has never been revoked (interview).