Developments in tax legislation review

June 08, 2020 amendments in tax legislation came into force. Remarkably, the amendments apply to relations have arisen since January 01, 2020. Amendments related to exemption from taxes for affected sectors businesses apply to relations have arisen since April 01, 2020.

TEAM provides a brief overview of the developments.

VAT

• You do not have to pay VAT on transfer of property without compensation, if it was made in order to counter the spread of coronavirus. Such transfer should be addressed to state authorities, local governments, state (municipal) institutions or enterprises. In this case, the tax previously accepted for deduction does not need to be restored.
• Organizations have the right to recognize the costs for acquiring the above mentioned property and transferred free of charge as non-operating expenses.

Corporate income tax

When determining the tax base for Corporate income tax you may not take into account income in the form of debt relief on loans taken to support employment, and accrued interests.

Personal income taxes

The following personal incomes are exempt from income taxes for citizens:

• in the form of written off debt on loans taken to support employment, and interest accrued on them;
• in the form of a monetary incentive payment for specific working conditions and additional workload due to the COVID-19,
• in the form of a subsidy (grant) in the amount corresponding to the amount of paid professional income tax for 2019

Insurance premiums

Insurance premiums for individual entrepreneurs from the most affected sectors of the economy have been reduced to 20,318 rubles for the billing period of 2020.

Exemption from taxes

Partial exemption from paying taxes for accounting periods (from 01.04.2020). Individual entrepreneurs and small and medium-sized enterprises (SMEs) that operate in the most affected sectors of the economy are exempt from a number of taxes and advance payments. Periods are set depending on the specific type of tax.

Reduction to 0% of insurance premium rates.

Reduction to 0% of insurance premium rates for payments to individuals accrued for April - June 2020.

This benefit applies to individual entrepreneurs and small and medium-sized businesses (SMEs) that operate in the most affected sectors of the economy, for the following types of insurance:

• mandatory pension insurance.
• compulsory social insurance in case of temporary disability and in connection with maternity.
• compulsory health insurance.

Author: Julia Dogadina, Associate of TEAM