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Tax & Legal
11 - 15 January 2021
Legislative Tracking
Be in the know
Legislative initiatives Media Review
Amending protocol to tax treaty with Luxembourg: suspended Federal Tax Service to issue free electronic signatures to companies and individual entrepreneurs
starting from 1 July 2021
Interest rate on soft loans for SMEs reduced
Initiative to reduce risks of foreign control over strategic Russian fishing companies
International tax news
List of Russian programs for pre-installation on electronic devices approved
Foreign highly qualified specialists to be allowed to bring families to Russia
Eurasian Economic Commission Panel approves approach to VATisation of e-services in EAEU
Rules for maintaining register of companies providing services for design and development of European Commission sets about to develop carbon border tax
electronic component base and electronic products approved
Netherlands publishes own list of low-tax jurisdictions
Saint Petersburg Government adopts third package of COVID-related turnaround measures
Regulatory Clarification
Ministry of Finance comments on calculation of VAT on software licensing starting from 1 January
2021
FTS explains how to validate profit of tax-exempt CFC resident in EAEU
FTS clarifies certain issues related to traceability of goods in EAEU and Russia
© 2020 Deloitte Consulting LLC. All rights reserved. 1
Legislative initiatives Initiative to reduce risks of foreign control over strategic Russian fishing companies
Amending protocol to tax treaty with Luxembourg: suspended A respective bill was submitted to the Russian State Duma.
To remind, Russia and Luxembourg signed the Protocol of Amendments to the tax treaty, which According to the document, pre-approval will be required for foreign investors wishing to acquire
generally increases the WHT tax rate for dividends and interest income to 15 percent. interests in Russian fishing companies exceeding 25 percent – down from the current 50 percent.
For the Protocol to enter into force, the parties must notify each other of completing the Within 365 days from the date of entry into force of the law, foreign investors holding a 25- to 50-
necessary domestic procedures: the document becomes effective on the date when the last such percent interest in a Russian fishing company will have to request approval of such controlling
notification is received and applies from 1 January of the year following the year of entry into interest or bring it down to below 25 percent.
force.
Non-compliant investors may be deprived of the right to vote at the general meeting of
Such entry into force was expected on 1 January 2021. shareholders (participants) of the fishing company in question.
On Russia’s side, all necessary prerequisites have been complied with: the Protocol was ratified by Official Website of the Russian State Duma
Federal Law No. 486-FZ of 30 December 2020.
However, in January 2021, it became clear that Luxembourg had not yet finalised its ratification List of Russian programs for pre-installation on electronic devices approved
procedures, which means that the amended treaty will not apply until 1 January 2022 andthe
taxpayers will be able to claim the existing tax benefits (a reduced tax rate of five percent on In particular, smartphones and tablet computers will have ICQ (a messenger), Marusya (a voice
dividends and exemption on interest) for at least another year. assistant), VKontakte and Odnoklassniki (social networks), MirPay (payments), and Kaspersky
Internet Security.
No clarifications/official comments have been extended by the Ministry of Finance yet.
Personal computers will have MyOffice Standard. Home Edition; smart TVs will have Wink, IVI,
At the same time, amending protocols with Cyprus and Malta signed in 2020 will apply as planned KinoPoisk, OKKO, etc.
as of 1 January 2021.
The rules will enter into force on 1 April 2021.
Unlike the Protocol with Luxembourg, they contain a temporary clause setting forth that the
amendments will apply starting from 1 January 2021, regardless of completion of domestic Source: Consultant Plus
procedures.
Izvestiya Foreign highly qualified specialists to be allowed to bring families to Russia
To do that, their employers need to submit requests to the Federal Security Service and the
Interest rate on soft loans for SMEs reduced Ministry of Internal Affairs.
According to the new rules, the maximum rate on soft loans must not exceed the key rate of the Family members will be able to cross the border with or without a visa, depending on their
Central Bank of Russia increased by 2.75 percentage points. citizenship, subject to a negative coronavirus test.
With the current key rate, soft loans will be accommodated at seven percent per annum (4.25 Official website of the Russian Government
percent + 2.75 percent) vs. 8.5 percent previously.
Official website of the Russian Government
© 2020 Deloitte Consulting LLC. All rights reserved. 2
Rules for maintaining register of companies providing services for design and development of
• travel and transport SMEs that carry out bus transportation on a regular or chartered basis
electronic component base and electronic products approved
will be exempted from transport tax in 2020-2021
To remind, starting from 1 January 2021, as part of the ‘tax maneuver’, Russian IT companies
• organisations and individuals will be granted a five-year relief from transport tax in relation
included in the register will be entitled (subject to certain prerequisites) to the following tax
to new e-cars and gasoline-powered cars
benefits:
• the CIT rate will be preserved at the 2020 level until 2022 for IT and investment companies
• reduced CIT rate (three percent)
• the scope of activities qualifying for the patent taxation system has been extended.
• reduced social contributions’ rate (7.4 percent).
Official Internet Portal for Legal Information
The register will be maintained by the Ministry of Industry and Trade.
To be included in the register, a company must, independently or jointly with other companies, be Regulatory clarifications
engaged in at least one activity listed in the Government resolution:
Ministry of Finance comments on calculation of VAT on software licensing starting from 1 January
• design and development of electronic components 2021
• design and development of electronic (radio-electronic) products/their components The ministry reminded that, starting from 1 January 2021, the licensing of Russian and foreign
• design and development of complex functional units, etc. software not included in the register of Russian computer programs becomes VATable.
Companies are entered in the register based on an electronic request, to which the necessary If software licensing services are supplied by a foreign company tax-registered in Russia as an e-
documents are attached. Requests are to be considered within 10 working days. service provider, such company will be obliged to assess and pay VAT directly.
Official website of the Russian Government Consultant Plus
Saint Petersburg Government adopts third package of COVID-related turnaround measures FTS explains how to validate profit of tax-exempt CFC resident in EAEU
The following measures are envisaged: According to the recent amendments to the Russian Tax Code:
• hotels, health resorts, and tourism companies will be exempt from property and land taxes • the tax authorities are entitled to request documents validating the CIT exemption claimed
for two years (2020-2021) for a CFC and/or confirmation of the CFCs’ profit, if such were not originally submitted by the
taxpayer (amended Article 25.14-1 of the Russian Tax Code)
• landlords renting out premises of over 500 sq. m to hotels and resorts will be exempted from
property tax and land taxes in respect of such property for two years subject to certain • profit must be validated regardless of whether it is reported on the controlling owner’s tax
conditions (one of them being a rent reduction for the period from 13 March 2020 to 31 return, i.e. even when a tax exemption is claimed or the CFC reports losses (amended
December 2021) Paragraph 5, Article 25-15 of the Russian Tax Code).
• tourism companies will have the tax rate under the simplified tax regime reduced to one
percent in 2021
© 2020 Deloitte Consulting LLC. All rights reserved. 3
The regulator has actually reaffirmed that documents validating a CFC's profit must also be
• the ratification of the treaty on the traceability of goods imported into the EAEU was
submitted for the CFCs exempt from the CIT by virtue of being based in a EAEU country.
completed by Russia, Belarus, Armenia, and Kazakhstan; ratification by the Kyrgyz Republic is
Profit/loss can be confirmed by the following documents: pending
• financial statements or other documents validating the CFCs’ profit/loss • to avoid duplicate tracing of the same goods, the Government is planning to set forth that
the goods that are in scope of the national traceability system cannot be subject to other
• auditor’s report.
traceability controls, and vice versa – the goods subject to other traceability mechanisms are
Legal entities must submit the documents together with the tax return, individuals – together with out of scope of the national traceability system.
the CFC notification.
Consultant Plus
If the controlling owners are unable to provide financial statements for reasons beyond their
control, other documentary evidence may be submitted. Media Review
Yet, this situation will require the submission, within the established deadlines, of information and
documents confirming the existence of such reasons, which will be assessed by the tax authorities Federal Tax Service to issue free electronic signatures to companies and individual entrepreneurs
on a case-by-case basis. starting from 1 July 2021
The regulator underlined that since the CIT exemption for the EAEU-based CFCs does not need to The FTS reminded that as of 1 January 2022, it will be in charge of issuing qualified electronic
be confirmed, the tax authorities may not demand such documents from the taxpayers. signatures to legal entities (persons entitled to act on behalf of a legal entity without a power of
attorney), individual entrepreneurs, and notaries.
Consultant Plus
The function will be performed starting from 1 July 2021 to ensure a seamless transition from the
fee-based signature issuance by accredited commercial certification centres to the free-of-charge
FTS clarifies certain issues related to traceability of goods in EAEU and Russia government service.
In particular, the following clarifications were offered: A qualified electronic signature of a legal entity, individual entrepreneur, or a notary can be
obtained personally by an officer acting without a power of attorney on behalf of such
• enhanced electronic signatures issued in a foreign state can be recognised in Russia as organisation, individual entrepreneur or notary at the FTS’s accredited certification centre
enhanced unqualified electronic signatures and be legally binding under an international (obtainment of signature on the basis of a power of attorney is not permitted by law).
treaty
Qualified electronic signatures of individuals, including those acting on behalf of a legal entity
• there are no legislative barriers in Russia for the use of electronic signatures for the seamless under a power of attorney, can be obtained from commercial certification centers after they
integration of labelling and traceability of goods in the EAEU renew their accreditation in accordance with the new the electronic signature regulations.
• cash register equipment interfaces with the digital traceability and labelling systems through Official Russian Federal Tax Service website
Tag 162 Product Code (fiscal document versions FFD 1.05 and FFD 1.1; starting from FFD 1.2,
Tag 1163 Product Code will be used)
• the EAEU member states do not exchange fiscal data; measures are currently being taken to
enable obtaining of the anonymized data by the government authorities and other
stakeholders
© 2020 Deloitte Consulting LLC. All rights reserved. 4
International tax news Netherlands publishes own list of low-tax jurisdictions
On 31 December 2020, the Netherlands published an updated list of low-tax jurisdictions. In an
Eurasian Economic Commission Panel approves approach to VATisation of e-services in EAEU effort to combat tax avoidance, a number of measures are applied to transactions with companies
The EEC Panel approved amendments to the Treaty on the Eurasian Economic Union to establish from such jurisdictions:
uniform collection rules for indirect taxes on electronic services. • starting from 2019 – additional measures on controlled foreign companies and ruling
The key development is the VATisation of electronic services at the place of consumption. restrictions
The document has been sent for internal approval to the EAEU member states. • starting from 2021 – conditional withholding tax on interest and royalties.
After the amendments come into force, all EAEU member states will have to bring their national The list includes jurisdictions that have a corporation tax rate under nine percent (Anguilla, the
rules regulating the payment of VAT on electronic services in line with the EAEU law. Bahamas, Bahrain, Barbados, Bermuda, the British Virgin Islands, the Cayman Islands, Jersey,
Turkmenistan, the Turks and Caicos Islands, the United Arab Emirates, and Vanuatu) and
Official Eurasian Economic Committee website jurisdictions that do not cooperate with the EU in tax matters (a total of 12 jurisdictions).
Official website of the International Bureau of Tax Documentation
European Commission sets about to develop carbon border tax
The parameters of the carbon border tax on imported goods are expected to be finalised by June
2021.
The tax is one of the key tenets of the EU's Green Deal – a set of policy initiatives by the European
Commission with the overarching aim of making Europe climate-neutral by 2050.
The strategy implies an increase of CO2 emission costs and reduction of free allocations of
emission allowances to European industry players.
Yet, the carbon tax will not be charged before 1 November 2023.
Kommersant
© 2020 Deloitte Consulting LLC. All rights reserved. 5
Deloitte publications
Federal law on changes in the regulation of remote work, including temporary work, enters into Russia is getting ready to ditch the tax treaty with the Netherlands
force in January 2021
The start of denunciation procedures was officially communicated by the Ministry of Finance and
On December 08, 2020, the President of Russia signed the Federal Law No. 407-FZ of 8 December a respective bill was announced on the Federal Draft Legislation Portal.
2020 (‘the Law’), which regulates remote work including temporary remote work.
Read on for more details in our LT in Focus of 7 December 2020
Read on for more details in our LT in Focus of 11 January 2021
New guidelines for man-made and natural emergencies training
BEPS 2.0. International tax overhaul
The Russian Government has approved new rules for training Russian and foreign nationals and
The OECD continues its work towards overhauling the international tax system, its main areas stateless persons in emergency preparedness and response to natural and man-made disasters.
The new rules replace the current Government Resolution No. 547 of 4 September 2003 and will
of focus being:
apply from 1 January 2021 to 31 December 2026.
• a fundamentally new approach to the allocation of taxing rights with respect to business
Adherence to established emergency response practices has become especially important in
profits in the digital age (Pillar 1)
2020 due to the persistent spread of coronavirus and continued state of high alert in Russia. In
• global minimum taxation (Pillar 2) April 2020, the Russian Code for Administrative Offences was supplemented with Article 20.6.1,
The Inclusive Framework released a package consisting of the Report on the Pillar One Blueprint which establishes liability for individuals and corporate officers for failing to comply with the rules
and the Report on the Pillar Two Blueprint for public consultation. in an existing or potential emergency, and in particular, when a state of high alert has been
declared.
The reports reflect the convergent views on many of the key policy features, principles, and
parameters of both Pillars. Read on for more details in our LT in Focus of 28 October 2020
The members of the G20/OECD Inclusive Framework recognisedthe reports as a solid foundation
for building a new approach to taxing profits in the digital economy and a solid basis for a MET Increase in tax rate on ores and chemical Minerals
systemic solution that would address the remaining base erosion and profit shifting. According to
On 15 October 2020, Federal Law No. 342 FZ , which provides for an increase of the tax burden
the conservative estimates of experts, the total global effect from the implementation of these
on mining companies, entered into force.
initiatives will amount to USD 60–100 billion of additional corporate income tax revenues per
year. One of the Law’s objectives is to increase effectiveness of MET collection, compensating and
preventing the shortfall in the federal budget’s revenues.
Many questions still remain open, but it is already clear that the changes may affect both
international companies operating in Russia and foreign operations of Russian companies. Read on to learn more in our LT in Focus of 23 October 2020
Read on for more details in our LT in Focus of 23 December 2020
© 2020 Deloitte Consulting LLC. All rights reserved. 6
Contacts Tax & Legal Svetlana Meyer Anna Kostyra Irina Androncheva Tamara Arkhangelskaya Emil Baburov Pavel Balashov Managing Partner Managing Partner Director Director Director Partner Tax & Legal Deloitte Legal iandroncheva@deloitte.ru tarkhangelskaya@deloitte.ru ebaburov@deloitte.ru pbalashov@deloitte.ru smeyer@deloitte.ru akostyra@deloitte.ru Dmitriy Bespalov Oleg Berezin Svetlana Borisova Veronika Varshavskaya Artem Vasyutin Vladimir Elizarov Digital Director Partner Partner Director Partner Partner dbespalov@deloitte.ru oberezin@deloitte.ru sborisova@deloitte.ru vvarshavskaya@deloitte.ru avasyutin@deloitte.ru velizarov@deloitte.ru Oksana Zhupina Anton Zykov Gennady Kamyshnikov Tatiana Kiseliova Anna Klimova Elena Kovalevich Partner Partner Partner Partner Director Partner ozhupina@deloitte.ru azykov@deloitte.ru gkamyshnikov@deloitte.ru tkiseliova@deloitte.ru aklimova@deloitte.ru ekovalevich@deloitte.ru © 2020 Deloitte Consulting LLC. All rights reserved. 7
Contacts Tax & Legal Oxana Kozhina Tatiana Kofanova Yulia Krylova Natalia Kuznetsova Dmitry Kulakov Yuliya Menshikova Director Partner Director Partner Partner Director okozhina@deloitte.ru tkofanova@deloitte.ru ykrylova@deloitte.ru nkuznetsova@deloitte.ru dkulakov@deloitte.ru ymenshikova@deloitte.ru Yulia Orlova Andrey Panin Leonid Pechernicov Maria Podosenova Dmitry Pozharniy Ekaterina Portman Partner Partner Director Director Director Director yorlova@deloitte.ru apanin@deloitte.ru lpechernikov@deloitte.ru mpodosenova@deloitte.ru dpozharniy@deloitte.ru eportman@deloitte.ru Yulia Sinitsyna Alexey Sobchuk Elena Solovyova Oleg Troshin Yuriy Khalimovskiy Director Director Partner Director Director ysinitsyna@deloitte.ru asobchuk@deloitte.ru esolovyova@deloitte.ru otroshin@deloitte.ru yukhalimovskiy@deloitte.ru © 2020 Deloitte Consulting LLC. All rights reserved. 8
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