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Overview of tax events for November 2020

01.12.2020
2 min read

Regulatory developments

The Russian President:

  • has signed a law amending the Russian Tax Code. It covers a variety of rules, from the conditions for filing tax returns to the taxation of dividends;
  • has signed a law raising the rates of personal income tax from 13 to 15% for persons earning more than RUB 5 million per year.

The State Duma:

  • has adopted in the first reading a draft law (No. 1025470-7) on the further development of tax monitoring;
  • has adopted in the first reading a draft law (No. 1025680-7) on changes in part one of the Tax Code about improving tax control over prices and the procedure of entering into a pricing agreement.

The State Duma:

  • has received a draft law (No. 1044568-7) on the VAT exemption granted to Russian online service providers.
  • has received for ratification a Protocol on amending the double tax treaty with Cyprus (Draft Law No. 1062979-7);

The Russian Government has approved a draft law to be put before the State Duma that is aimed at introducing into Russian legislation rules governing the taxation of digital currency.

Owners of digital currency may be imprisoned if they have failed at least twice over three years to report to the tax authorities transactions with digital currencies for an amount of RUB 45 million or greater.

Practice

The Government has extended by three months tax holidays for small and medium enterprises from the industries most affected by the spread of coronavirus.

The President has held a working meeting with the head of the Russian Federal Tax Service Daniil Yegorov. The Head of the tax authority informed the President about the current activity of the tax service, see this (video).

The Federal Tax Service is creating a new digital system that will make transactions of businesses so transparent for the state that the tax authorities will be able to calculate companies’ taxes by themselves and issue an invoice. This was what the Head of the Federal Tax Service talked about at the Plenary meeting of the Tax Forum of the Russian Chamber of Commerce and Industry. Next year it is expected that new tax treatment will emerge for retail companies involving an automatic payment of taxes.

In 2021, the Federal Tax Service of Russia is planning to exchange with taxpayers documents on entering into pricing agreements in electronic form (Order No. ED-7-13/768@ of the Russian Federal Tax Service dated 21 October 2020).

Subsidiaries of multinational corporations and wholesale suppliers of imported goods have complained about mass refusals of Russian tax authorities to deduct expenses on paying interest under loans. Inspectorates regard the return of funds borrowed within the group with interest as a withdrawal of funds from taxation.

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