In 2022 the government introduced a lot of tax benefits, and the biggest ones went to IT companies. Nikita Zharov, Senior Tax Consultant at Tax Compliance, tells what the Russian IT-business can expect in his article for Delovoy Mir
The sanctions imposed by Western countries have contributed to the fact that at present the IT industry is considered by the state to be one of the key drivers of growth of the domestic economy. This fact determines significant preferences for the IT-industry, including in the field of taxation. Therefore, it is important for IT-businesses to be aware of the key changes and understand what tax benefits can be applied to their activities.
Tax maneuver in the IT sphere
In 2020, the government took a serious step towards the IT-industry. The set of support measures was called the "tax maneuver". In order to support IT-specialists and ensure the competitiveness of Russian companies, the IT-business was entitled to apply the following tax benefits.
- On corporate income tax. For accredited IT-companies, the tax rate was reduced from 20% to 3%.
- On insurance premiums. IT-companies were given the opportunity to apply reduced insurance contribution rates in the total amount of 7.6%.
- On VAT. Transactions on the sale and transfer of rights to programs from the Russian software registry were exempt from VAT.
2022: further liberalization
After the introduction of Western sanctions, the government decided to further reduce the tax burden on IT-business. In particular, the following targeted initiatives were implemented.
Moratorium on tax audits
Until 3 March 2025, the tax authorities will not conduct on-site (repeated on-site) audits in respect of accredited IT-companies. The audits scheduled prior to the issuance of the Federal Tax Service clarifications will be completed in the standard manner.
At this, during the moratorium, tax authorities will be able to conduct desk audits, commissions to clarify the tax liabilities and other control measures (interrogations, request of documents, etc.). In addition, the moratorium on field audits applies to previous tax periods. This means that in 2025 the tax authorities will be able to appoint an audit for the period falling in 2022-2024.
Therefore, businesses should be careful about taxation even during the moratorium.
Exemption from currency control
The Federal Tax Service of Russia instructed territorial tax authorities to suspend the appointment and conduct inspections of compliance with currency legislation.
Business reorganization for tax purposes
Reorganization of a business solely for tax purposes is usually considered by the tax authorities as a "business splitting" scheme. Until recently, law enforcers made no exceptions for the IT sphere. For this reason, many entrepreneurs have been conservative in their approach to the issue of reorganization of business in order to take advantage of tax benefits.
In March 2022 the Federal Tax Service significantly softened its position. In fact, the territorial tax authority indicated that the reorganization of the IT-business in order to obtain tax benefits should not be regarded as a "scheme for splitting" the business.
There is reason to believe that this measure is aimed at stimulating big business and individual entrepreneurs to use tax benefits for IT companies more actively.
"Zeroing" the income tax rate
By Decree No. 83 of March 2, 2022, the President of Russia decided to take measures aimed at establishing a "zero" profit tax rate for IT companies until 2024. This initiative was implemented by Federal Law № 67-FZ of March 26, 2022.
Therefore, IT-companies which meet certain criteria can now apply a "zero" profit tax rate for the period 2022-2024.
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