On 31.05.2023, Draft Law No. 369931-8 (hereinafter - the Draft Law) was introduced to the State Duma, which proposes a number of large-scale amendments to the Tax Code of the Russian Federation (hereinafter - the Tax Code of the Russian Federation). The said draft Law as of 11.07.2023 was adopted in the first reading. Its next consideration is scheduled for 19.07.2023.
Based on the results of familiarization with the text of the draft Law, the following key changes in tax legislation can be identified, which may come into force if the draft law under consideration is adopted.
VALUE ADDED TAX
Exempt from VAT
Developer services provided on the basis of a contract for participation in shared construction, related to non-residential premises (including garages and parking spaces) in an apartment building.
Abolition of VAT exemption
Services of the developer, provided on the basis of a contract for participation in shared construction, in the construction of premises intended for temporary residence (without the right to permanent registration).
- The limit of expenses for the purchase or creation of a unit of advertising materials for VAT exemption has been increased to 300 rubles.
- Participants in tax monitoring will be able to receive a refund of VAT and excise taxes in the general manner in case of refusal of the declarative procedure.
- When refunding VAT and excise taxes, the institution of an electronic bank guarantee will become available, which will be received by the tax authorities directly from the guarantors, which is designed to reduce the time and financial costs of taxpayers.
CORPORATE INCOME TAX
Accounting for losses of previous years
The possibility of recognising losses incurred in previous tax periods for tax purposes, subject to the 50% limit, has been extended until 2030.
Taxation of residents of special economic zones
The income tax rate to be credited to the federal budget is set at 2%.
Regional investment project
Since a regional investment project cannot be aimed at the production of excisable goods, it is proposed to establish appropriate exceptions for participants in regional investment projects.
Special Investment Contract
- The constituent entities of the Russian Federation have the right to establish reduced tax rates on income tax for organizations that are a party to a special investment contract without the participation of the Russian Federation.
- The definition of taxpayers participating in special investment projects who have already been granted reduced income tax rates in accordance with the Tax Code of the Russian Federation is being clarified.
- Establishment of an open list of types of insurance contracts for which expenses for tax purposes will be taken into account.
- Assets transferred to unitary enterprises from owners include property rights that are not included in income.
- Rules are introduced for the formation of the tax value of property or property rights for cases where at the time of their receipt the taxpayer did not make expenses, and their receipt led to the recognition of non-operating income. It also establishes the procedure for accounting for the residual value of depreciable property upon termination of its use without its actual liquidation or sale.
- The provisions of Chapter 25 of the Tax Code of the Russian Federation are clarified to eliminate contradictions and bring terminology in line with changes in sectoral legislation (Articles 25.9, 25.16, 251, 284, 286, 286.1 of the Tax Code of the Russian Federation).
- The procedure for confirming the conditions for the application of the multiplying factor for research and development (R&D) expenditures is simplified.
- The list of non-operating income, which is the difference between the amount of tax deductions from the amounts of excise tax accrued when using grapes owned by the taxpayer on the right of ownership for the production of wine, sparkling wine, etc., sold in the tax period, is specified.
- In the distribution of corporate income tax between the constituent entities of the Russian Federation, where the separate divisions of the taxpayer are located, the accounting of labor costs is excluded.
TAXATION OF CFC PROFITS
Tax rate for employees of Russian companies working remotely
It is proposed not to take into account the profit of a foreign structure without the formation of a legal entity in the tax base of the controlling person, if the latter does not have the opportunity to determine the amount of profit of the foreign structure due to the peculiarities of its creation and conduct of activities established by its personal law. However, the controlling person must submit a notification of the controlled foreign company to the tax authority.
PERSONAL INCOME TAX
Tax rate for employees of Russian companies working remotely
From January 1, 2024, Russian employing companies will withhold personal income tax at a rate of 13% or 15% from the income of employees working remotely under employment contracts or civil law contracts, regardless of their loss of tax residency in the Russian Federation (if they stay outside Russia for more than 183 days a year).
The procedure for submitting a personal income tax notification
It is proposed to provide an opportunity for tax agents to submit notifications of the calculated amounts of personal income tax twice a month (on the 12th and 25th), which will allow transferring the amount of personal income tax paid to the budget system also twice a month.
Obtaining tax deductions
- The right to receive a standard tax deduction is given to taxpayers who have children or wards recognized as incapacitated.
- The procedure for granting social tax deductions is simplified.
- Establishment of the amount of compensation payment for the purpose of exemption from taxation - 35 rubles for each day of performance of the labor function by a remote worker when compensating for expenses associated with the use of own or rented equipment, software and hardware, information security tools and other means for performing the labor function.
- It is proposed to give families with children who sell a dwelling purchased with the help of state support the right to take into account the costs of its purchase in proportion to the share of each family member in the ownership of this dwelling when determining the tax base.
- Providing an opportunity for taxpayers to reduce the amount of taxable income by the amount of actually incurred and documented expenses related to the acquisition of property rights, instead of receiving a property tax deduction (within the limits of the income received from the sale of the relevant property rights);
- Empowering foreign legal entities with the functions of tax agents in respect of income paid to individuals performing work and services in the territory of the Russian Federation, including in the field of information technology, using the Internet, and establishing a tax rate in respect of such income for taxpayers who are not tax residents of the Russian Federation, in the amounts established for taxpayers who are tax residents of the Russian Federation.
SPECIAL TAX REGIMES
Expansion of the list of subjects of the automated simplified tax system
Empowering organizations and individual entrepreneurs engaged in the production of jewelry and other products made of precious metals or wholesale (retail) trade in such products with the right to switch to an automated simplified tax system.
Clarification of the procedure for calculating tax under the simplified tax system
It is proposed to clarify the procedure for calculating the tax when changing the location of the organization or the place of residence of an individual entrepreneur in the case when one of the constituent entities of the Russian Federation has established a reduced tax rate.
Improving the procedure for conducting mutual agreement procedures
Changes are made to the procedures related to the request for additional information from the taxpayer and tax authorities, as well as the procedure for implementing the decisions reached in the course of mutual agreement procedures in practice.
Exemption from transport tax
Wanted vehicles are exempt from taxation.
Termination of accreditation of a branch or representative office of a foreign organization
It is proposed to create a special notification by the tax authority on the calculated amounts of transport and land taxes in the event that a foreign organization submits an application for termination of accreditation of a branch or representative office. This will allow you to quickly calculate these taxes for previous periods and identify arrears before deregistration of a foreign organization.
Interaction of tax authorities with municipal land control bodies
Establishment of information exchange between tax authorities and municipal land control bodies to identify cases of misuse of land plots.
Changing the order in which the multiplying factor is applied
- The multiplying coefficient, which is used in the calculation of land tax for land plots intended for housing construction, will be applied from the moment of establishment or change of the permitted use of land plots, and not only from the state registration of rights to them.
- The use of a multiplying factor in the calculation of land tax will be excluded in the case of an agreement on the integrated development of the built-up area, which determines the deadline for development.
Bringing terminology in line with industry legislation
It is proposed to bring the terminology of the Tax Code of the Russian Federation in line with the current legislation in the field of urban planning and housing relations. In particular, the concepts of "apartment buildings", "garden houses" and "hired houses" will be included in the Tax Code of the Russian Federation with the application of taxation provided for residential buildings.
The procedure for calculating and paying insurance premiums
The procedure for calculating and paying insurance premiums is specified in the event that a homeowners' association has not been established in an apartment building or this house is not managed by a housing cooperative, and the relationship between the owners of the premises and the elected members of the council of an apartment building related to the payment of remuneration to such persons for the performance of their powers is carried out through the management organization.
- Maximum values (standards) of compensation payments are established when paying expenses associated with the use of own or rented equipment, software and hardware, information security tools and other means for performing the labor function of remote workers in order to exempt them from insurance premiums.
- The rationing of non-taxable insurance premiums for daily subsistence allowances to employees working on the road or having a traveling nature of work, and instead of daily allowances for rotational work (no more than 700 rubles per day), is established.
- The place of submission of the calculation of insurance premiums by payers of insurance premiums, which are the largest taxpayers, is specified.
TAX ON ADDITIONAL INCOME FROM THE EXTRACTION OF HYDROCARBONS
Extension of the tax to additional income from the extraction of hydrocarbons
The tax on additional income from the production of hydrocarbons additionally applies to 3 subsoil plots located in the Khanty-Mansiysk Autonomous Okrug - Yugra.
Reduction of the amount of state duty
With regard to the accreditation of branches and representative offices of EAEU organizations established on the territory of the Russian Federation.
Empowerment of tax authorities
- The Federal Tax Service is empowered to determine the specifics of accounting for the largest taxpayers, in particular, to develop criteria for classifying persons as the largest taxpayers. Now these powers are assigned to the Ministry of Finance of Russia.
- It is proposed to oblige taxpayers to resolve property disputes arising from the implementation of acts of tax authorities or actions (inaction) of officials, within the framework of mandatory pre-trial appeal.
- Officials of tax authorities may gain access to the territory or premises of a tax monitoring participant for inspection as part of tax monitoring.
- The tax authorities have the right to partially cancel (replace) the interim measure taken in the event of partial execution of the decision to prosecute for committing a tax offense or collecting mandatory payments.
- The tax authorities have the right to apply interim measures in the form of a ban on the alienation (pledge) of property and the suspension of operations on bank accounts in accordance with the established sequence of their application, based on the actual availability of the payer's property.
Automation of tax administration
In order for the tax authorities to obtain information about lawyers, it is proposed to change the procedure for obtaining information. The information will be transmitted through the automated integrated information system of the Bar of Russia (hereinafter referred to as the CIS AR) while maintaining the information independence of the Bar, while the operator of the CIS of the Republic of Azerbaijan is the Federal Chamber of Lawyers of the Russian Federation.
Toughening of liability for tax offenses
- When the tax authority takes interim measures in accordance with paragraph 10 of Article 101 of the Tax Code of the Russian Federation, liability for non-compliance with the established procedure for possession, use and disposal of property will apply to the violator in accordance with Article 125 of the Tax Code of the Russian Federation.
- Toughening of liability for tax agents for failure to submit a tax calculation on the amounts of income paid to foreign organizations and withheld taxes, as well as for violation of tax payment obligations in case of payment of income to a foreign organization.
The procedure for converting the amount of tax calculated in foreign currency into the currency of the Russian Federation
The mechanism for converting the amount of tax calculated in foreign currency into the currency of the Russian Federation will be subject to adjustment on the date of payment of income. At the moment, tax agents are recalculating on the date of payment of tax.
- Clarification of the methodology for registration with the tax authorities of foreign citizens receiving income from deposits in Russian banks, where the interest rate does not exceed 1% per annum, and on escrow accounts.
- The possibility of notifying the taxpayer of the tax authority about empowering an individual with the powers of a taxpayer's representative before entering into tax legal relations, which will make it possible to refuse to regularly confirm by an authorized representative his rights to represent the interests of the taxpayer.
Based on the results of the analysis of the draft Law, it can be concluded that the proposed amendments, in many respects, are aimed at automating tax administration, as well as expanding both the powers of tax authorities and the subjects of disputes subject to mandatory pre-trial settlement.
In addition, the draft Law introduces a number of changes to the procedure for collecting property taxes, insurance premiums and state duties, taxation of CFC profits, changes the procedure for conducting mutual agreement procedures, expands the list of entities that can switch to an automated simplified taxation system.
Separately, it should be noted the amendments, which make a number of important changes to federal taxes:
- VAT - in terms of clarifying the procedure for taxing the services of developers.
- Personal income tax - in terms of setting tax rates of 13 or 15%, regardless of the loss of tax residency of the Russian Federation.
On the one hand, this approach means a potential reduction in the tax burden for these employees, because previously it was proposed to impose such income at a rate of 30%.
On the other hand, as the Russian Ministry of Finance considers the suspension or cancellation of international double taxation treaties with unfriendly states, there is a risk of double taxation of income of such employees.
The position of the Federal Tax Service on excise taxes on petroleum products in terms of mixing of different types of fuels20.09.2021