Tax law and tax disputes

The ‘coronavirus’ support measures have been adjusted

The Russian Government’s Resolution No. 1032 dated 11 July 2020 introduced amendments to the support measures for socially oriented non-for-profit organisations which were ‘adversely affected’ by the coronavirus restrictions.

The Government has approved the possibility to cut the tax residence period in 2020 down to 90 days It was approved today at the session of the Russian Government that individuals who stay in the Russian Federation from 90 days up to and including 182 days may recognise themselves as Russian tax residents in 2020 and, consequently, pay personal income tax at the rate of 13%, rather than the rate of 30% as established for non-residents. 

The Federal Tax Service of Russia has launched a service for paying subsidies on preventing Covid-19

 Starting 15 July, organisations and entrepreneurs from “affected” industries and also socially-oriented not-for-profit organisations will be able to receive a subsidy of RUB 15.000 and on top of that RUB 6.5 for each employee for reimbursing expenses on the prevention of coronavirus.

The Russian Constitutional Court has limited recovery from individuals if no arrears can be recovered from a taxpayer

By its Resolution No. 32-P dated 2 July 2020 the Russian Constitutional Court has banned recovery from individuals under a civil law procedure (article 1064 of the Russian Civil Code) of damage caused to the state in the amount of arrears provided that the impossibility to recover such arrears in the manner established by tax legislation is not connected with the actions of the individual.

The list of affected sectors has been supplemented with water-borne and rail transportation The Government's Resolution No. 927 dated 26 June has added passenger transportation by rail (i.e. a long haul service), marine and inland water-borne transport to the list of sectors “affected” by the spread of the coronavirus infection.

Review of new regional measures for tax support of owners of commercial real estate We continue to monitor the news concerning the adoption of benefits in Russian regions with respect to property taxes for owners of real estate who are landlords. Please find below an overview table as at 29 June 2020.

The Regulation on the register of socially-oriented not-for-profit organisations has been approved

As we previously advised, Russian lawmakers continue to adopt regulations aimed at clearly defining the circle of not-for-profit and religious organisations to which property can be transferred for no fee and when relevant costs can be deducted for profit tax purposes.

Denunciation of the DTT with Malta Yesterday the Russian Ministry of Finance published on the government’s portal information that the development and discussion has started with regard to a draft law to denounce the Convention between Russian Government and Government of Malta for the avoidance of double taxation from 1 January 2021. 

The President’s address of 23 June: tax measures

On 23 June the President addressed the public regarding new initiatives to amend tax legislation. Please find below the specified initiatives with our comments.

Review of new regional measures for tax support of owners of commercial real estate

We continue to monitor the news concerning the adoption of benefits in Russian regions with respect to property taxes for owners of real estate who are landlords. For the period starting from 5 June, our list has grown by six more regions.

A draft law extending the application of the patent taxation system The Government has developed amendments to the Tax Code relating to the application of the patent taxation system (the “PTS”) and has submitted them to the State Duma. 

Expenses of a free-of-charge transfer to not-for-profit and religious organisations

Russian lawmakers continue to adopt regulations aimed at clearly defining the circle of not-for-profit and religious organisations to which property can be transferred for no fee and when relevant costs can be deducted for profit tax purposes.