Tax Overview for March 2023

Regulatory developments

The law on denunciation of the treaty between Russian Government and Government of Malta for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital has been published.

The Russian President has signed the law on the inclusion of full payment of arrears, default interest and fines in the list of grounds for a refusal to initiate criminal proceedings/to terminate such proceedings under articles 198-199.1 of the Russian Criminal Code. The timeframes of the maximum penalty in the form of imprisonment and the statute of limitations have also been reduced.

In connection with the introduction of the unified tax account, the Russian Government has increased the period for submitting tax claims and making a decision on their collection

The Russian Ministry of Finance's sub-commission has clarified that the “voluntary” contribution to the budget from transactions on the sale of assets by “hostile” foreigners will amount to 5% of the market value of the business.

The Russian Ministry of Foreign Affairs and the Ministry of Finance proposed to the Russian President have to suspend the double taxation treaties with hostile countries until the violated rights of Russia are restored.

In order to attract partners and technologies from friendly countries, international advanced development areas will be created in Russia (a package of draft laws has been prepared by the Russian Ministry for the Development of the Far East and the Arctic).

A new stage of digital labelling of drinking and mineral bottled water has begun in Russia.

Mandatory labelling of bicycles will begin in Russia on 1 September 2024 instead of March this year.

The Parliament of Kazakhstan has ratified the protocol on amendments to the EAEU Treaty on taxes. The goal is to ensure the achievement of equal conditions for the collection of VAT in the free economic zones of Russia.

Practice

The Russian Federal Tax Service:

• has developed a Manifesto on “Reasonable requesting”;

• has issued Letter No. Sh-4-13/2691@ dated 9 March 2023 on taxation of foreign companies receiving income from sources in Russia and on the procedure for applying the provisions of double tax treaties.