Overview of tax events for October 2020

Regulatory Developments

The Russian President: has approved the Strategy for the development of the Arctic zone and ensuring national security until 2035.

The State Duma has adopted the law on a national product traceability system for products imported into the EAEU's customs territory.

The Russian Government by its Resolution No. 2570-r dated 6 October 2020 has approved the draft law on amending the Convention on the avoidance of double taxation between Russia and Luxembourg. The adjustments relate to the increase of withholding tax with respect to dividends and interest up to 15%. But Holland wishes to retain a number of other benefits as well and is not going to agree to these conditions.

The Russian Government:

• has prepared amendments to draft law No. 1022669-7 (the initiator being the Russian Government) “On amending part II of the Tax Code of the Russian Federation with regard to the taxation of income of individuals that exceeds RUB 5 million per tax period”. A number of exceptions are proposed;
• is discussing two options for the reform of property tax, the construction of which both officials and businessmen have not been able to determine for many years. The first option proposes to introduce a single reduced tax for all property of companies and to collect it not only on real estate, but also on equipment (currently this is exempted from tax). The second is to cancel property tax in full by increasing profit tax.

The Russian Government has submitted to the State Duma the following draft laws:

• No. 1026967-7 on extending the list of regional groups, residents of which who are legal entities will be able to obtain the status of international companies in a special administrative region (annotation);
• No. 1025680-7 on improving tax control over prices and the procedure for entering into pricing agreements.

Draft law No. 1025470-7 on improving tax monitoring has been submitted to the State Duma.

The Russian Ministry of Finance:

• has prepared amendments to the Russian Tax Code on informing taxpayers in advance concerning the suspension of transactions on bank accounts in connection with a failure to file a tax return;
• is discussing a transition to calculating corporate property tax based on cadastral value.

Practice

The Russian Government is launching a special institution: an agreement for the protection of and incentives for capital investments (an “APECI”), which guarantees that the conditions for implementing investment projects will not change.

The Russian President has ordered that experiments be conducted with regard to labelling drinking water, beer and low-alcohol beverages.

Digital labelling of tyres and covers started in Russia from 1 November.

Business has given notice of interruptions of supplies of footwear and perfume, which had begun after the mandatory labelling of this category of goods was introduced.

The Russian Prime Minister has singed Resolution No. 1779, which simplifies the procedure for working with the system for monitoring the movement of medicines.