Overview of Tax events for January 2020

REGULATORY DEVELOPMENTS

Starting from 1 January 2020, it has become possible to adjust tax obligations for transactions with foreign persons further to a mutual agreement procedure.

The Russian Government has adopted:

• an access procedure with respect to the information contained in the state information system for monitoring the circulation of goods that are subject to compulsory labelling;
• a procedure for labelling perfume and scented water using means of identification and the specifics of introducing an information system for monitoring perfumery products;
• a procedure for marking tyres and covers using means of identification and the specifics of introducing an information system for monitoring these products;
• a procedure for labelling consumer goods using means of identification and the specifics of introducing an information system for monitoring these products;
• a procedure for marking photo cameras, speed lights and flash tubes using means of identification and the specifics of introducing an information system for monitoring photo products;

For information:

The Government’s 2020 Legislative Drafting Plan includes the development of draft laws on amendments to the Russian Criminal Code in relation to persons being held liable if they breach the requirements for labelling goods using means of identification.

30 June 2020 is the extended deadline for an experiment to be conducted in Russia that involves checking the traceability of goods released in the territory of Russia under the customs procedure of release for domestic consumption.

1 January 2020 saw the coming into force of the updated list of states and territories that do not ensure the exchange of tax information with Russia (the Russian Federal Tax Service’s Order No. ММВ-7-17/511@ dated 11 October 2019).

The Russian Ministry of Transport has presented a list of sea ports that will charge a levy from entering vessels (draft order).

The Russian Federal Security Service and Federal Tax Service have prepared a draft joint Order whereby the intelligence service will make the results of investigations available to tax authorities.

The Finance Ministry has prepared a draft of a Federal Law “On amendments to part one of the Tax Code of the Russian Federation (in terms of improving tax control over prices and the procedure for entering into pricing agreements for tax purposes)”.

The Russian Accounts Chamber has prepared legislative proposals for regulating non-tax payments.

The State Duma believes that commercial businesses should be exempted from taxes with respect to unsold products, and then they will be more forthcoming in donating such products to charity.

PRACTICE

The President of the Russian Federation has appointed Mikhail Mishustin, head of the Federal Tax Service as Chairman of the Russian Government. The latter, in turn, has allocated duties between the Deputy Chairmen of the Government.

The Prime Minister has appointed Alexey Sazanov, Director of the Finance Ministry’s Tax and Customs Policy Department, as Deputy Minister of Finance.

Daniil Egorov, former Deputy Head of the Federal Tax Service, has been appointedas the new Head of the Service.

The Russian Finance Ministry believes that in charging businesses arrears and fines for tax evasion the tax authoritiesdo not necessarily have to apply the reconstruction method.

The Russian Federal Tax Service has clarified to what extent a tax secret may be disclosed when a person agrees to release in the public domain information about unformed sources with respect to the chain of suppliers of goods (work or services) for VAT deduction purposes.

The special section of the Federal Tax Service’s website titled Disclosure of financial information in line with the standards of the Organisation for Economic Cooperation and Development (OECD) has been completed with new information about the categories of clients and contracts for financial services that should be reported in 2020.

The Commercial (‘Arbitration’) Court for the Moscow Circuit has upheld the judgments of two lower-level courts, which supported the tax authority’s decision to impose on Erich Krause Finland the obligation to pay an additional RUB 45 million in taxes and fines to the government. When calculating profit tax the company unlawfully overstated its expenses by an amount equivalent to the value of advertising services that had allegedly been supplied to it by a Cypriot offshore entity.

The Moscow City Commercial (‘Arbitration’) Сourt has published the judgments relating to the dispute between MTS, a Moscow telecommunications operator, and VimpelCom with Inter-District Inspectorate No. 7 of the Federal Tax Service for Major Taxpayers. The companies were fined for refusing to provide the tax authority with billing data in relation to specific telephone numbers.