Tax code changes

The significant changes in the Russian Tax Code were made in accordance with the Federal Law №63-FZ as of April 15, 2019.

The amendments improve the procedure of income and property tax collection, granting benefits on transport and land taxes as well as simplify fiscal management, reduce tax return and the administrative burden on taxpayers.

In particular, since January 1, 2020 mandatory declarations on transport and land taxes will be canceled. Tax authorities will inform entities, which have vehicles and land plots, about the charged taxes. The Tax service gets such information automatically from registration authorities. Notifications must be sent no later than 6 months after the due date for tax payment. In case of difference between the tax amount and actually paid taxes, entities may submit the explanations and relevant documents within 10 days after receiving such notifications. After the consideration of explanations, the tax authorities may update the notifications within a month or will require to pay taxes.

The mandatory settlements of advance payments on property tax are cancelled. Besides, the entities are given the right to choose the authority, in which they can submit the unified tax return, in case the entity has multiple objects in the same region.

In addition, a VAT deduction is provided for the "export" of services and works. In case Russia is not recognized as the place of sale of works or services, "input" VAT can be deducted.

The transfer of property on a free-of-charge basis to the ownership of the Russian Federation for the purposes of organization or for scientific research in Antarctica is also exempt from VAT payment.

The property transferred to the treasury of the region, municipality or to the ownership of the Russian Federation is not the subject to VAT.

Provisions regarding the investment tax deduction on income tax were clarified. This refers to deductions for expenditure on infrastructure.

Since 2020, individual entrepreneurs will not be obligated to submit a preliminary declaration 4-NDFL (personal income tax). Instead of it, there will be advance payments on the basis of the actual income. The Federal law came into force on April 15, 2019, with the exception of some provisions that will come into force on other dates.