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New accounting rules for intangible assets from 2024

Starting January 1, 2024, new rules for accounting for intangible assets (IA) introduced by the Federal Accounting Standard (FAS) 14/2022 “Intangible Assets” become mandatory. The currently applicable Russian Accounting Regulation “Accounting for Intangible Assets” (“PBU 14/2007”) is canceled with the introduction of the new rules.

Compared to PBU 14/2007, the new rules established by FAS 14/2022 add some significant changes:

  • Licenses for certain activities and non-exclusive rights are now classified as IA. Means of individualization (logo, trademarks) under FAS 14/2022 are not included into IA if created by an organization independently.
  • The value limit of IA is set by the organization independently (for accounting purposes only).
  • Depreciation is allowed from the date of acceptance of IA into accounting records, etc.

There are two options for transition to FAS 14/2022: retrospective and alternative:

  • The retrospective approach recalculates the comparative figures of the accounting statements for previous years as if the rules of FAS 14/2022 had always been applied. This method will most accurately and reliably reflect information on items of IA;
  • In case of the alternative approach recalculation of previous years’ figures is not performed (only figures as of January 1 of the year when FAS 14/2022 has become applied are recalculated).

An organization has the right to choose the approach of switching to FAS 14/2022 based on the principles of materiality and rationality of accounting.

Companies that have the right to apply simplified accounting methods apply the new rules only to newly acquired IA, and do not restate previous figures at all (so called “prospective” method). They may also choose not to apply certain provisions of the FAS 14/2022 (paragraph 3 of FAS 14/2022).

At the same time from January 1, 2024, the changes in the rules of accounting for capital investments in IA introduced in the FAS 26/2020 “Capital Investments” by the Order of the Russian Ministry of Finance No. 87н dated 30.05.2022 must be applied.

To transit to the new rules of accounting for IA it is necessary to make changes to the accounting policy for accounting and tax accounting purposes for 2024, namely:

  • specify the method of transition to FAS 14/2022 (retrospective, alternative or, for certain companies, prospective);
  • specify the method of transition to FAS 26/2020 (retrospective, alternative or prospective);
  • establish the value limit of IA;
  • establish the accounting procedure for low value IA;
  • make a classification, indicating types and groups of IA necessary for choosing the method of valuation and depreciation method;
  • choose the method of valuation of IA: at historical cost or at revalued cost (the latter applicable only to IA for which there is an active market)
  • prescribe provisions on depreciation of IA, etc.

KBK Accounting is ready to offer you our expertise and support in the preparation of relevant accounting policies, reflection of operations on transition to FAS 14/2022 in accounting, as well as on other issues.

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Russian Government published the explanations of the temporary rules for the compulsory sale of foreign currency proceeds.

On October 19, 2023, the Russian Government published a Resolution on measures to implement Presidential Decree No. 771 of October 11, 2023 on the mandatory sale of foreign currency revenue (the “Decree”). The Decree was signed on October 11, 2023 and provides for the return for 6 months for a number of Russian exporting companies of the mandatory repatriation of foreign currency proceeds and their sale in the Russian Federation. At the same time, both the Decree itself and the list of exporting companies to which it applies have not been published in the public domain.

According to the published Resolution of the Government of the Russian Federation exporters are obliged from October 16, 2023 within 60 days from the date of receipt of funds to credit to their accounts in Russian banks not less than 80% of all foreign currency received in accordance with the terms of their export contracts. They are also required to sell on the domestic market within two weeks at least 90% of foreign currency proceeds credited to their accounts with Russian banks (but at least 50% of the funds received – regardless of the currency – under each export contract, within no more than 30 days of receipt).

The Resolution also grants the Government Commission for Control over Foreign Investments in the Russian Federation the right to issue permits to certain companies not to make compulsory sales of foreign currency on Russia’s domestic currency market.

The Resolution is valid until April 30, 2024.

Link: http://publication.pravo.gov.ru/document/0001202310190051

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Environmental fee 2022: the deadline is approaching.

Manufacturers and importers who do not dispose of certain product waste and packaging must pay the annual environmental fee and file special reports. Reporting must be submitted by March 31, 2023, the deadline for payment of the environmental fee for 2022 is April 14, 2023. Failure to submit reports on time can lead to fines of up to RUB 150,000 (EUR 1,800) for each form, failure to pay the environmental fee in due time – to a fine of RUB 500,000 (EUR 6,000) and more.

 

What is the environmental fee

The environmental fee is a mandatory non-tax payment payable by manufacturers and importers of certain types of goods (packaging) that must be disposed of / recycled if the manufacturers and importers do not recycle these goods (packaging) or do not meet the certain recycling limits.

The list of goods and packaging for which the environmental fee is payable was approved by Government Decree No. 3721-р of 31 December 2020. If the goods or packaging are not on the list, it is not necessary to pay the environmental fee. Manufacturers and importers are responsible for recycling the packaging from the list, in which they pack the goods, even if the goods themselves are not on the list.

The following companies do not pay the environmental fee:

  • manufacturers and importers if they dispose of their own product waste according to regulations;
  • exporters of goods and packaging;
  • manufacturers of packaging who sell it as a finished product so that other manufacturers pack their own products in it;
  • producers and importers of packaging that is later used for their own needs.

 

Payment of the environmental fee

The general deadline for paying the environmental fee is by April 15 of the year following the reporting year (clause 2 of the Government Decree of 08 October 2015 No. 1073). The fee for the year 2022 must be paid by April 14, 2023.

Important: when the last day of the deadline falls on a weekend, the environmental levy must be paid in advance. The general order about postponement established by Article 193 of the Civil Code of the Russian Federation does not apply in this case.

Producers transfer the environmental fee to the territorial department of Rosprirodnadzor (special state body responsible for the supervision of natural resources). Importers send the payment to the central office of Rosprirodnadzor.

 

Reporting

If the goods and packaging are not included into the on the list approved by Government Decree No. 3721-r of 31 December 2020, you do not have to file an environmental report. If the goods or packaging are on the list, at least three reports must be filed:

  • declaration of the amount of finished goods and packaging released into commercial trade in Russia;
  • a report on the fulfillment of the recycling limits from the use of goods;
  • calculation on the environmental fee.

 

The declaration of the amount of finished goods and packaging released into commercial trade indicates how many products or packaging a company sold or imported last year. The deadline for reporting is no later than April 1 of the following year (31 March 2023 for the reporting 2022).

In the report on the fulfillment of recycling limits indicate how much goods and packaging a company disposed of / recycled itself or with the help of intermediaries. The deadline for reporting is April 1 of the year following the reporting year (31 March 2023 for the reporting 2022).

In the calculation of the environmental fee reflect mandatory payment to the budget from the difference between the standards and the utilized amount. The absolute value of the normative is considered on the shipments of the year before last. The deadline for reporting is April 15 of the year following the reporting year (14 April 2023 for the reporting 2022).

 

Penalties

Failure to pay the environmental fee (or pay it in time), errors, and inaccurate data in your reporting forms can be punished by substantial fines. Detailed information on fines is given in the table below:

ViolationPenalty for companies, RUBPenalty for the company officials, RUBReference to Code of the Russian Federation on Administrative Offenses
Environmental fee not paid or not paid on timeThree times the amount of the fee for each group of goods and packaging with a minimum fee of RUB 500,000 (EUR 6,000).RUB 5,000 to RUB 7,000 (EUR 60 to EUR 90)Art. 8.41.1
Report on fulfillment of recycling limits:   
– Not submitted on time;RUB 70,000 to RUB 150,000 (EUR 900 to EUR 1,800)RUB 3,000 to RUB 6,000 (EUR 40 to EUR 75)clause 1 Art. 8.5.1
– incompletely submitted, with mistakes or inadequate informationTwo times the amount of the environmental fee for each group of goods and packaging, but not less than RUB 250,000 (EUR 3,000)RUB 3,000 to RUB 6,000 (EUR 40 to EUR 75)clause 2 Art. 8.5.1
Declaration of the quantity of finished goods and packaging released into commercial trade:   
– Not submitted on time;RUB 70,000 to RUB 150,000 (EUR 900 to EUR 1,800)RUB 3,000 to RUB 6,000 (EUR 40 to EUR 75)clause 1 Art. 8.5.1
– incompletely submitted, with mistakes or inadequate informationTwo times the amount of the environmental fee for each group of goods and packaging, but not less than RUB 250,000 (EUR 3,000)RUB 3,000 to RUB 6,000 (EUR 40 to EUR 75)clause 2 Art. 8.5.1
Calculation of environmental fee was submitted with delays, errors or inaccurate informationRUB 20,000 to RUB 80,000 (EUR 250 to EUR 1,000)RUB 3,000 to RUB 6,000 (EUR 40 to EUR 75)Art. 8.5*

 

*There are no separate penalties for late, incorrect and inaccurate information in the calculation of the environmental fee. Rosprirodnadzor and its territorial bodies can use Art. 8.5 on concealment or distortion of environmental information

 

Our recommendations

Due to the significant amount of penalties for the violations related to the environmental fee and reporting, we strongly recommend that you verify whether your company is required to file environmental reports and pay the environmental fee. We would be happy to offer our many years of expertise and assist you with verifying said data, as well as with preparing and filing all required reports.

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Invitation to the “Russia Update” Video Meeting

On Wednesday, 22.03.2023, at 15.00 CET, in cooperation with Deutsch-Eurasischer Wirtschaftsbund e.V., the following video meeting will take place (in German language).

Topic: share sales, liquidity transfer, intercompany settlements, debt repayment, customs valuation, tax havens, DTTs, etc.

 

Presentations will be given by:

Thomas Brand
Attorney at Law, Partner

Valeria Khmelevskaya
Lawyer and Tax Advisor, Partner
Chairwoman of the Tax and Accounting Committee
German-Russian Chamber of Commerce Abroad (AHK)

 

You can register here and you will receive the link for free participation.

If you have any questions in advance, please send them to anna.schach@bbpartners.de.

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Unified tax account: how to pay taxes and contributions in 2023

Almost all taxes, levies and contributions will need to be transferred to a single date to a special account. How the new system of payments and reporting is arranged, we will tell in the review.

 

SUMMARY:

  • all taxes and social contributions, but for the exceptions described below, will be paid to the unified tax account (UTA);
  • the tax authorities themselves will offset the unified tax payment (UTP) against current tax liabilities (distribute the amounts received to UTA by type of tax);
  • the deadlines for submission of tax returns, calculations have changed (the reporting date will be unified – the 25th day of the month);
  • a single date for tax payments and social contributions has been introduced – the 28th day of the month;
  • a new obligation has appeared – to submit a notification of tax calculated if the tax is paid before the deadline for submission of a tax return/calculation or without a tax return/calculation.

 

UNIFIED TAX ACCOUNT AND UNIFIED TAX PAYMENT

As of January 1, 2023, all taxpayers in Russia (both legal entities and individuals) will switch to a so-called “unified tax account” (UTA). The UTA is not a bank account, but a special internal account with the Federal Tax Service, which will be opened for every organization and individual with a tax number.

The payment of almost all taxes, advance tax payments, social contributions, late fees, fines, and fees can then be made exclusively by transferring a “unified tax payment” (UTP) – as before to the bank account of the tax administration. Currently, an individual “budget classification code” (“KBK”) must be provided for each individual tax payment. Thus, the change in the law will result in simplification for taxpayers.

The UTA, which will function from January 2023, will show the tax administration both all transfers to the account and all liabilities of the taxpayer – i.e. the total amount of taxes, prepayments, insurance premiums, fees, penalties, interest and fines that the tax authority has determined.

The following are transferred as the UTP:

  • corporate profit tax,
  • VAT,
  • personal income tax,
  • social contributions. The exceptions are contributions for injuries. They are transferred to the Social Fund of Russia, created on the basis of the Pension Fund and Social Fund,
  • property tax,
  • land tax,
  • transport tax,
  • excises etc.

Companies may transfer UTP to their UTA either as a lump sum or in several instalments throughout the year. The main condition is to have time to make the payment (part of it) before the due date of this or that tax.

When transferring UTP, a company must indicate only the amount of payment and personal tax ID in the payment order. Both payers themselves and any third parties will be able to make a single payment to their account. Money will be accumulated in the account and debited as specific taxes are due. The tax authorities will calculate and set off the necessary part of the single tax payment against the payment of a particular tax. Offsetting the payment against taxes and contributions is performed in the following sequence of payment obligations:

  • arrears (starting from the earliest date of its detection),
  • taxes, advance payments on taxes, fees and insurance premiums (starting from the date of the obligation to pay them on the basis of tax declarations, calculations and notifications),
  • penalties,
  • interest.

Money transferred to a UTA and exceeding the total amount of due taxes may be at any time either refunded or offset against the payment of taxes of another person at the request of the taxpayer. The refund shall be made within one month of the date of receipt of the relevant application from the company, and the decision on the refund shall be made by the tax authorities within 10 days of its receipt.

The tax authorities will determine the open balance of the UTA as of January 1, 2023. Overpayments for which the time limit for refunding has been missed and any uncollectible arrears should not be taken into account.

Instead of the standard reconciliation, certificates may be requested from the tax authorities about the following:

  • the existence of a positive, negative, or zero balance of the UTA,
  • belonging of money transferred as UTP,
  • fulfillment of obligation to pay taxes, fees, penalties, fines, interest.

 

SINGLE PAYMENT DEADLINE

The deadline for most taxes and contributions to the UTA is the 28th of the month.

The most significant change has affected personal income tax. According to the new rules, its due date is not tied to the type of payment from which the withholding was made.

The tax, which was withheld from the 23rd of the previous month to the 22nd of the current month, must be paid no later than the 28th of the current month.

The exceptions are December and January. In December (for the first time in 2023) PIT must be remitted twice:

  • no later than December 28 – the tax withheld for the period from November 23 to December 22,
  • no later than the last working day of the year (December 29 in 2023) – the tax withheld for the period from December 23 to December 31.

PIT withheld for the period from January 1 to January 22 should be transferred no later than January 28.

 

SINGLE DEADLINE FOR SUBMITTING REPORTS

The deadline for tax and insurance contributions reporting is the 25th of the month.

So, for example, the calculation of social contributions for 2022 must be submitted no later than January 25, 2023.

The frequency of submitting reports does not change.

 

NEW REPORTING: NOTIFICATION OF TAX CALCULATED

For taxes, contributions and advance payments which are paid before or without filing a declaration, it is necessary to submit a notification of the calculated amounts. The deadline is no later than the 25th of the month of payment.

There is a special deadline for notification of personal income tax, which will be withheld from December 23 to 31 – the last working day. Thus, in December 2023 with regard to personal income tax must be sent two notices: one no later than December 25, and the second – up to and including December 29.

In 2023, an organization or individual entrepreneur has the right to submit a payment order instead of a notification. The inspectorate must unambiguously identify the budget to which the funds are sent, the date of payment and other necessary details. The rule ceases to apply as soon as a taxpayer submits a notification for the first time.

 

WHAT YOU NEED TO DO

We recommend that you do reconciliations for all taxes as soon as possible to make sure that the company data is up-to-date and that the initial balance of the UTA is formed correctly.

KBK Accounting is ready to help with the practical application of the new rules, in particular with confirming overpayments and reconciling the opening balance of the unified tax account.

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Presentation: accounting and tax bookkeeping – special aspects during the mobilization

On 12 October 2022 the meeting of the Committee on Taxes and Financial Reporting of the German-Russian Chamber of Commerce was held, where the partner of KBK Accounting Ruslan Nizamov made a presentation on special aspects of accounting and tax bookkeeping during the partial mobilization, announced in Russia on 21 September 2022.

Ruslan’s presentation covered several important topics concerning all companies whose employees were mobilised, what they should do and how these events affect the companies’ accounting and tax accounting.

The presentation is available for download by clicking here.

October 25, 2022

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Benefits for IT-companies in Russia

Various benefits for Russian IT companies have been introduced in 2022 in order to develop and support the IT industry, which include the following:

  1. 0% corporate profit tax rate for 2022-2024.

For Russian IT-companies the profit tax rate for the years 2022-2024 is reduced to 0% if the following conditions are met:

  • The company has received a certificate of accreditation for carrying out IT-activities.

A Russian IT-company has only one condition for accreditation: the company’s code of activities, which is included into the trade register, should correspond to certain code groups related to IT field. Accreditation for IT companies, which is carried out by the Ministry of Finance, is valid indefinitely, and can be obtained online in one day.

  • The income share condition

Revenue for IT-services must amount to at least 70% of the company’s total income. The law also includes a list of the services which are deemed as IT-services for these purposes;

If a company loses its state accreditation or if the income share requirement is not met at the end of the year, corporate profit tax must be recalculated from the beginning of the year at the regular rates (20%).

Until July 2022 the legislation also contained a headcount requirement (with minimum of 7 employees) for the application of the reduced tax rates, but this condition has been abolished.

  1. Reduced rates of social insurance payments

Employers in Russia are responsible for paying the social insurance for their employees. Qualifying IT-companies (the same conditions as for income tax) can apply the reduced social insurance payments rates, which are set at a general rate of 7.6% (with the standard rate of 30%).

  1. Moratorium on inspections

An accredited IT-company cannot be subject to scheduled inspections by governmental agencies before the end of 2024. The moratorium applies to unscheduled inspections as well, which are prohibited until the end of 2022, but not only for IT-sector, but for all Russian companies.

  1. Simplified procedure for employment of foreign specialists

Accredited IT-companies may hire foreign specialists without any special permission (except for companies-residents of technological-innovative special economic zones).

  1. Soft loans

Accredited IT-companies may receive preferential credit at a rate not exceeding 3% p.a., if there is no lay off of the personnel and wages are indexed annually.

  1. Preferential mortgages for employees

From 13 May 2022 to 31 December 2024 employees of Russian IT companies aged 22 to 44 (inclusive) can obtain a mortgage loan with a rate of maximum 5% p.a. The credit limit depends on the region where the premises to be purchased is located.

The Ministry of Finance has prepared a special internet portal with detailed information on this support measure (https://www.gosuslugi.ru/ipoteka).

  1. Military deferment for employees

Graduates with at least 11 months of work experience in IT-companies during the year preceding the call-up date and up to 27 years of age will be able to get deferment.

  1. Eligibility for accelerated depreciation in

IT companies have the right to apply a coefficient not exceeding 3 for corporate profit tax to certain items from 1 January 2023.

 

At KBK Accounting, we are ready to help you with applying for the special accreditation for IT-companies, payroll and general accounting.

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KBK Accounting is included in the rating of the largest companies in accounting outsourcing in Russia for 2021

Biggest Russian rating agency RAEX has published its annual ranking of companies in the field of accounting outsourcing for 2021. The annual ranking is based on annual revenues of companies and includes major market players.

Having applied for the first time, KBK Accounting has already entered the list of the largest companies in the field of accounting outsourcing in Russia, taking the 35th place in the ranking in 2021.

KBK Accounting has been supporting international companies entering the Russian market since 2013 and provides accounting and tax support, consulting and financial management and control services.

Source: https://raex-rr.com/pro/b2b/outsoursing/outsourcing_of_accounting_functions_rating/2022/

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Who and why should choose accounting outsourcing?

Accounting outsourcing is the transfer of in-house accounting functions to outside specialists. The accounting outsourcing market in Russia is still at an early stage of development. According to the latest analysts’ data, only about 15-20% of companies in Russia use outsourced accounting (compared to 80-90% in Europe and the USA).

In many cases, companies do not fully understand all the benefits of accounting outsourcing, looking at outsourcing only in terms of costs, or believing that outsourcing is not suitable for them for whatever reason. We will try to tell you what the benefits of outsourcing are and for which companies it may be suitable the most.

Advantages of accounting outsourcing

1. Focusing on core objectives and business processes

The main advantage of accounting outsourcing, in our opinion, is the opportunity to gain a competitive advantage, moving the non-core functions out of the company and focusing entirely on the business. Accounting outsourcing allows you to spend more time developing your business, leaving the “paperwork” to us. You don’t need to be distracted by bookkeeping, submitting reports, controlling compliance with different legal requirements – all that is taken care of by KBK Accounting.

2. Reduction of non-core expenses

The second most important benefit of accounting outsourcing is the opportunity to reduce costs. When you outsource the bookkeeping, you avoid additional costs of maintaining an in-house accounting department, such as

  • Renting a larger office;
  • Accountants’ salaries and social contributions;
  • Purchase of specialised software and database accesses;
  • IT services related to maintaining and updating the necessary software;
  • HR services related to recruitment and hiring.

In addition, you will not encounter a leave of absence for your accountant, KBK Accounting is always available to you.

3. Reducing the financial risks associated with accounting errors

Choosing a qualified accountant in Russia, especially one who speaks foreign languages, is always a long and complicated process. Moreover, sometimes it is very difficult to assess his professionalism during initial interviews. By choosing KBK Accounting for accounting outsourcing in Russia, you are insured against such risks, as our specialists have already passed the necessary screening.

For your convenience, in addition to Russian we also work in German and English.

4. Contacts with public authorities

Our accountants have years of experience in dealing with various public authorities (Tax Service, Pension Fund, Social Security Fund etc.).

We will take part in all audits. We take upon ourselves the preparation of all documents required for an audit, minimising the cost of your time.

The benefits listed above apply to absolutely all companies, but at the same time accounting outsourcing is most suitable for certain types of business.

Who is suitable for accounting outsourcing?

Startups. Launching a new business in Russia is a rather costly undertaking, requiring a complete focus on business development from the owners. Accounting outsourcing allows you to concentrate on the core processes and at the same time to be sure of the quality of accounting, which is also particularly important in Russia, where there are no accounting simplifications for companies just starting out.

Foreign business. As we noted above, overseas accounting outsourcing is a ubiquitous long-standing practice, and businesses understand its benefits. This is the main reason why, when entering a new market in Russia, foreign companies are more willing to outsource bookkeeping, since they understand perfectly well that it is easier to entrust bookkeeping, tax and payroll calculations to professionals than to immerse themselves in the subtleties of Russian legislation, accounting and the specifics of business processes.

Small and medium-sized enterprises. For these companies, the opportunity to optimise non-core expenses is particularly important. Accounting outsourcing will allow not to keep a staff of accounting department without any loss in quality and control of business processes.

Holdings. Despite the size which implies having an in-house accounting department, large and complex businesses also often resort to accounting outsourcing, but for such companies it is most relevant to outsource certain areas of the accounting. As a rule, these are the most routine and labour-intensive, such as HR and payroll.

Micro-enterprises and individual entrepreneurs. For businesses of this size, accounting outsourcing is the most appropriate solution, as they cannot afford to have an in-house accountant. Often, they resort to the services of a third-party solo accountant, but such accountants tend to service dozens of similar companies, which of course affects quality accordingly. Outsourcing the bookkeeping to an outsourced company is in this case optimal.

Companies that have specific activities. These or other companies have activities which require specific knowledge of the certain areas of accounting and legislation. In outsourcing companies, there are always specialists with experience in supporting specific firms.

Seasonal business. It is not profitable for companies operating in the season to maintain accounting during a downturn in activity. Therefore, companies in the agro-industrial complex, some food production, hotel business outsourcing of accounting services is in demand.

At the same time there are a small number of situations where accounting outsourcing is ineffective and even contraindicated:

1. Willingness to do bookkeeping with irregularities. We don’t work with clients running a non-“white” non-compliant business.

2. Management’s tendency to micromanage. Accounting outsourcing is not suitable for the companies where management is used to controlling all processes, giving orders personally and having direct contact with accountants. Accounting outsourcing in today’s world is the services of high-tech accounting companies. KBK Accounting has almost 10 years’ experience in accounting outsourcing in Russia, and our range of services includes all areas of bookkeeping, tax, and management accounting, which are incredibly difficult for an individual business to replicate with the same quality by an in-house accounting department, both in terms of time and cost. That is why it makes sense to maintain only those competencies that are key and determine its competitiveness, while we will do our best to ensure that your business takes full advantage of accounting outsourcing in Russia.

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VAT on B2B e-services: back to reverse-charge

 

From 1 October 2022, the procedure for paying VAT on electronic services provided by foreign entities in the Russian Federation changes.

19.07.2022

Federal Law No. 323-FZ of 14 July 2022 introduced important changes concerning the procedure for paying VAT on electronic services provided by foreign entities.

Since 2019, foreign organisations, when providing B2B electronic services for Russian companies and individual entrepreneurs, were obliged to register under a special simplified procedure with the Russian tax authorities and to pay VAT on such transactions on their own.

The Federal Law No. 323-FZ amends this approach with effect from 1 October 2022 and brings back the procedure that was applicable before 2019: according to the new wording of Article 174.2 of the Tax Code of the Russian Federation, VAT on electronic B2B services must be paid by Russian buyers acting as tax agents. Self-payment of VAT by a foreign organisation will remain only in cases of providing e-services to Russian individuals (B2C).

Corresponding changes have been made to the conditions for deducting VAT on electronic services. While previously a simplified procedure was applied under which only an invoice/agreement (stating the Russian VAT number of the foreign company) and a payment slip to confirm payment for the e-services of a foreign company with an allocated VAT amount were necessary for deduction, starting from October 1, 2022, the general procedure of deduction using a VAT-invoice will apply. At the same time, in accordance with the amendments, tax agents will be obliged to issue VAT-invoices within 5 calendar days of the month following the quarter in which payment for e-services rendered by foreign companies was received.

We also note that the Federal Law No. 323-FZ does not change article 83 of the Tax Code of the Russian Federation stipulating an obligation of foreign companies rendering e-services to get tax registration in the Russian Federation as well as article 174.2 para 8 which stipulates an obligation of foreign companies to regularly submit VAT declarations.

In case you are a foreign company providing electronic B2B services in Russia or – on the contrary – a Russian buyer of such services, we recommend that you contact your counterparties to change the approach to paying VAT from Q4/2022. KBK Accounts is ready to assist you in connection with tax registration in Russia as well as with the preparation of regular VAT returns.

Source: Federal Law No. 323-FZ of 14 July 2022

 

 

http://publication.pravo.gov.ru/Document/View/0001202207140129

 

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PERSONNEL ADMINISTRATION: INTRODUCTION OF ELECTRONIC EMPLOYMENT RECORDS FROM 2020

PERSONNEL ADMINISTRATION: INTRODUCTION OF ELECTRONIC EMPLOYMENT RECORDS FROM 2020

The employment record is one of the most important HR documents in Russia containing the entire employment history of an individual (incl. positions, dates of hiring and termination, as well as any disciplinary sanctions). According to the Labor Code of the Russian Federation, an employer is obliged to maintain the employment record for every employee employed for more than 5 days. The employment records are held by the employer during the employment. Upon termination of the labor contract, the employment record must be handed over to the employee on the last working day.

On December 16, 2019 Russian President signed two laws passed by the Russian parliament aimed at a gradual transition to electronic employment records.

Federal Law 439-FZ introduces the necessary changes into the Labor Code of the Russian Federation by adding Article 66.1 Information of the Employee’s Employment History from January 1, 2020, which provides the basis for maintaining the employment history for the employees in electronic form.

By June 30, 2020, all employers must notify the employees of the law changes related to the electronic employment records. By December 31, 2020, each employee must decide and notify the employer whether he/she wants to continue using a hard copy employment record or not. In the former case, the employer will have to duplicate the information in both the hard copy and electronic versions of the employment record.

An exception is made for the employees who begin their career after January 1, 2021 – information on their employment history will be recorded only in electronic form.

If an employee has not informed the employer about his/her choice by December 31, 2020, the employer will be obliged to continue to maintain a hard copy employment record. An application for a full transition to an electronic employment record can be submitted later at any time. In this case, the original hard copy employment record will be handed over to the employee.

When starting at a new job, the employee will have to present the hard copy employment record only if it exists. If the employee has previously applied for a transition to an electronic employment record, an excerpt from it will have to be provided. The excerpt can be obtained in hard copy either from the last employer or at any office of the Pension Fund of the Russian Federation, at multifunctional centers, or on the Gosuslugi Public Services Portal (https://www.gosuslugi.ru/).

All information about the employment history of the employees will be kept by the Pension Fund. To record information on the employees’ employment history for subsequent transfer to the Pension Fund Federal Law No. 436-FZ, also signed by the President on December 16, 2019, introduces SZV-TD, a new mandatory report for all employers.

From January 1, 2020 the SZV-TD report will have to be submitted to the Pension Fund on a monthly basis no later than on the 15th of the month following the reporting month. If there are no changes in the information reflected in the SZV-TD report during the month, the report for that month is not required. If there are no changes throughout 2020, the first report as of January 1, 2020 must be submitted by February 15, 2021.

Starting from January 1, 2021, the SZV-TD report must be submitted no later than the working day following the day of a new hiring or termination.

If the staff consists of more than 25 people, the SZV-TD report may be submitted only in electronic form.

Draft Law No. 748758-7 amending the Code of Administrative Offences the Russian Federation was also adopted in the first reading on December 3. Until the final adoption of the law, we assume that violating the deadlines for submission of the above-mentioned information or failure to submit it will be penalized under Article 5.27 of the Code of Administrative Offences, which specifies a fine of 30,000 to 50,000 rubles for legal entities for a violation of the labor laws.

KBK Accounting Recommendations:

We recommend that you analyze all the transition steps to electronic employment records in advance, including:

  • Familiarizing yourself with the introduced changes and new obligations of the employers, e.g. obligation to provide information on an employee’s employment upon the employee’s request;
  • Adopting or adjusting the local regulations and agreements (if necessary) to comply with the updated legislation and reflect the use of electronic employment records;
  • Checking the technical readiness for submitting the SZV-TD report electronically;
  • Notifying each employee in writing about the changes in labor legislation by June 30, 2020.

We will be happy to assist you in the transition to electronic employment records, including the development of the necessary internal documentation.

/ December 19, 2019

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Steuerliche Vergünstigungen für Produkte Made in Russia

Steuerliche Vergünstigungen für Produkte Made in Russia

Die Wirtschaftskrise in Russland bietet einen zusätzlichen Anreiz für die Entwicklung der inländischen Produktion. Neben Anziehung von Direktinvestitionen sollen zusätzliche steuerliche Vergünstigungen zur Förderung der heimischen Produktion beitragen cialis en pharmacie. In den Hauptrichtlinien über die Steuerpolitik der Russischen Föderation für 2016 und für den Planungszeitraum 2017 und 2018, veröffentlicht Ende Juli 2015 durch das Ministerium für Finanzen, werden aus diesem Grund Maßnahmen zur Schaffung der Investitionsanreize durch steuerliche Instrumente sowie Optimierung der Steuerverwaltung als Hauptziele definiert.

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Article is temporarily available in German only.

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