One of the main measures to support business is the postponement of payment of taxes and fees, as well as the postponement of submission of tax returns (the latter - for all taxpayers).
- Deferred payment of taxes and contributions, the period of transfer to the budget which falls on the period until May 1 (taxes on special modes of STS and UST, advance payments on taxes (except for VAT) for the 1st quarter of 2020, income tax - for 6 months, advance payments for the 2nd quarter and the first half of 2020 - 4 months). This measure can be relied upon by organizations included in the list of systemically important, as well as small and medium-sized businesses (the main OKVED of which coincides with the list of industries approved by the Russian Government).
- System-forming companies that do not belong to small and medium-sized businesses can get a delay of less than 6 months under a simplified procedure - without collateral, surety or bank guarantee.
There are no problems with obtaining tax preferences for the affected companies, as detailed information on the procedure and possibility of obtaining tax deferral/payment is available on the website of the Federal Tax Service of Russia. Also, the service in automatic mode allows to check compliance with all the criteria for obtaining subsidies by an SME operating in the affected industries. It is important that the wording of the Federal Law of 22.04.2020 № 121-FZ has been amended in paragraph 60 of paragraph 1 of Art. 251 of the Tax Code, allowing the tax agent to not withhold PIT from the amount of this subsidy.
Many companies experience difficulties in paying regular payments due to the actual lack of revenue. To assist in this regard, the authorities have provided for deferral of rent of non-residential premises owned by the state and municipalities. The deferral covers the period from 01.04.2020 to 01.10.2020 and is provided to companies from the most affected sectors of the economy (hotel business, air transportation, etc.). However, many companies are not able to take full advantage of this measure, because the developed rules do not take into account some aspects of financial and economic relations.
For example, companies that are subleaseholders of non-residential state and municipal property face the problem of obtaining a deferral of rent payments because this measure does not apply to lease transactions through intermediaries. Despite the fact that the lessor is a party to the civil law transaction (because it agrees to enter into a sublease agreement to recognize the transaction as valid), it cannot affect the payment terms between the sub-lessor and the sub-lessor. Until amendments and clarifications are made to the Resolution No. 439 dd. 03.04.2020, this problem will remain.
Reducing administrative pressure
Administrative pressure on business is traditionally quite strong in Russia. In crisis conditions such pressure has a particularly negative impact on companies, therefore it was decided to suspend field tax audits until 01.06.2020.
In such a case, it is possible to obtain a delay in the submission of documentation and explanations for a maximum period of time as a general rule by submitting a request under Art. 93 TAX CODE OF THE RUSSIAN FEDERATION. In current conditions overstatement of term of a delay usually does not involve refusal in prolongation even if on the company anticrisis measures do not extend. The tax authority admits that the argument of the taxpayer that it is impossible to submit documents for the previous three-year tax period in time due to the lack of access to the primary documentation due to the established regime of remote work is justified.
Economic recovery will largely depend on the activity of business lending, so the government plans to issue interest-free loans to pay salaries to companies most affected by the decline in consumer demand. This is a necessary measure, as business in the absence of demand actually has no cash flow, and loans are the only way to save staff and restart all processes.
Unfortunately, in practice many companies have problems with obtaining such loans. In particular, this is due to the requirement to have salary projects at a particular bank (for example, Sberbank and VTB have such a requirement), which would ensure control over the receipt of funds into employee accounts. The solution to this problem is to formalise a salary project before obtaining a loan, but banks often delay this process.
It is also worth noting such a measure as a moratorium on bankruptcy for 6 months. It applies to systemically important organizations and strategic enterprises. The list of these organizations is published by the Federal Tax Service of Russia.
There are no practical problems with the implementation of this anti-crisis measure for the companies, as the service of the Federal Tax Service of Russia allows to automatically check the criteria for the spread of the moratorium or get information about the persons who have been declared to have refused to apply this right. In addition, information on the status of the company in the public domain is placed on services to verify the reliability of counterparties (contour-focus, Sparq and similar).
At the same time, this measure is, in fact, a delay that business can use to stabilize its financial position and take measures to maintain relationships with counterparties. But the effectiveness of this measure is questionable, as creditors during this period analyze accounts receivable and decide to file for bankruptcy after the moratorium. And in the absence of revenues, the financial position of the company will not improve, so for many it will only be a delay of actual bankruptcy.
Efficiency of measures
First, the effectiveness of business support measures directly depends on the amount of budget funds allocated to them. This amount is determined on the basis of the received GDP, and the Russian economy does not have a leading position in terms of GDP per capita, respectively, and the funds allocated for a quick recovery from the crisis are simply not enough. Secondly, the mechanism for implementing support measures in practice plays a major role. Thus, the main problem faced by companies is the lack of promptness in supporting business by the banking sector. Until recently, there were problems with obtaining interest-free loans due to a significant number of applications and lack of control over the actual use of loan funds.
To address this issue, the Government has introduced daily monitoring of programme implementation and expanded the list of credit institutions to process applications for interest-free loans for salary projects. As a result, many companies were forced to downsize due to lack of funds for salary payments. It is also worth noting that the State has not timely regulated the provision of compensation payments in the form of MRTs to employees of the affected companies, which has exacerbated the unemployment problem in the country.
Analysis of support measures
The anti-crisis measures developed by the government are generally in line with the global trends, in particular, in terms of tax and credit holidays, interest-free loans and subsidies for companies. Thus, Spain also postponed the deadlines for submitting tax returns, established installments for payment of taxes and quotas in the social security system, there is preferential crediting for payment of taxes, rent, salaries and other fixed expenses.
Among the Russian measures that do not exist in most developed countries, it is worth highlighting the postponement of federal property rent for small and medium-sized businesses. But this measure should be complemented by assistance to commercial property tenants, who also have difficulties in paying regular payments. Thus, it would be necessary to reduce the cost of renting private property by affected companies during the period of restrictive measures. At the same time, we should not forget about the interests of landlords, who in such a case would need compensation payments to avoid loss of income.
Forecast for the future
The stabilization of the Russian economy depends on the development of effective post-crisis measures. The decline in consumer demand under conditions of instability has affected all sectors of the economy to some extent, so government support measures should be provided for all economic entities.
For post-crisis recovery and stimulation of domestic consumption, it is important to extend the period of direct payments and concessional lending to the population, and to eliminate disruptions in financial markets. At the same time, it is not excluded that after the stabilization of economic activity, the tax burden will increase due to higher tax rates and introduction of new tax administration facilities.
Mikhail Begunov will participate in Pravo.ru conference "Development and construction: legal issues"12.10.2021