Provisions of Federal Law «On Customs Regulation in the Russian Federation and on Introduction of Amendments to Certain Legislative Acts of the Russian Federation» concerning electronic interaction of customs authorities and payers came into effect on January 1, 2019. Provisions of law concerning electronic consulting provisions will come into effect on January 1, 2020, provisions on filing complaints in electronic form against decisions, actions or omissions of customs authorities – on January 1, 2022.
From January 1, 2019, in accordance with the Federal Law No. 231-FZ from July 29, 2018, auditors are obliged to submit information to the Federal Tax Service (FTS of the RF) at the first request within a ten-day period based on the decision of the head of the FTS of the RF or his deputy. Upon receipt of such request, auditors have the right to inform the person in respect of whom the request was received.
Since January 31, 2019 the amendments to the Federal Law No. 218-FZ «On credit histories» ated December 30, 2004 came into force. Following these amendments, the borrowers, including natural persons, can make a free-cost query twice a year or unlimited number of chargeable queries on credit reports through credit institutions having agreements for information services with credit bureaus. This can be carried out in the form of electronic documents signed with ordinary or enhanced unqualified electronic signature.
In accordance with the Federal Law No. 444-FZ from November 28, 2018 «On Amendments to the Federal Law «On financial accounts», beginning from the financial accounts for 2019, all companies are obliged to file accounts only in electronic form. Small business entities will file accounts in electronic form since 2020.
The Federal Law No. 322-FZ dated August 03, 2018 amended the Federal Law “On insurance of deposits of individuals in banks of the Russian Federation” and extended the system of insurance of bank deposits to small business funds. That is, entrepreneurs, having funds in the accounts of bankrupt credit institutions can return them in the amount of not more than 1 400 000 rubles.
In addition, amendments were made to the Federal Law No. 127-FZ «On Insolvency (Bankruptcy)» dated October 26, 2002. Now, the deposit agreement requirements of small business companies transferred to the Deposit Insurance Agency included in the number of claims of third-priority creditors.
By the Federal Law No. 480-FZ from December 25, 2018 amendments were made to the Federal Law «On protecting rights of legal entities and individual entrepreneurs during the execution of the public control (supervision) and municipal control». The moratorium on scheduled inspections of legal entities– small business entities and individual entrepreneurs was extended to 2019 – 2020.
The Federal Law No. 533-FZ from December 27, 2018 with the amendments to articles 76.1 and 145.1 of the Criminal Code the Russian Federation and amendments to the Criminal Procedural Code of the Russian Federation entered into force on January 8, 2019. The Law expanded the list of crimes, criminal cases of which should be terminated upon condition of reparation for damages. In addition, the amendments established the conditions that allow the head of organization to avoid the criminal liability for non-payment of wages.
The Federal Law No. 335-FZ from November 27, 2017 “On amendments to the Part One and Part Two of the Tax Code of the Russian Federation and certain legislative acts of the Russian Federation” established that since January 1, 2019, foreign providers of electronic services for legal entities and individual entrepreneurs in Russia are obliged to pay value added tax (VAT). ). In this regard, all foreign providers are required to register for tax purposes until February 15, 2019.
The Federal Law No. 327-FZ from August 03, 2018 «On the amendments to the Federal Law «On credit histories» came into effect on January 31, 2019.
According to the adopted amendments, a personal credit score is now assigned to Russian consumers and each Russian individual is now authorized to request two free credit history reports annually.
The Russian President’s Decree No. 8 from January 14, 2019 established the Russian Ecological Operator, a public nonprofit entity for creation of a comprehensive municipal solid waste management system. 69 regions have switched over to the new MSW treatment system since January 1, 2019.
From June 1, 2019, the Federal Law No. 527-FZ «On the amendments to Articles 46 and 54 of the Federal Law On communications» dated 27.12.2018 came into force. According to the Law, domestic national roaming is canceled, i.e. operators of mobile radio-telephone communication are obliged to establish equal terms in their networks for the provision of services to each subscriber, regardless of the region of his/her/its location.
The Government of the RF adopted the Order No. 158 «On Approval of the Regulation on the Classification of Hotels» dated 16.02.2019. According to the Regulation, all types of hotels are classified according to the system of stars, which provides for 6 categories: from five stars - to no stars.
In the beginning of 2019 amendments regarding state registration of LLC and Individual Entrepreneurs came into force.
Concept of digital rights is determined by the legislation as an object of civil rights. The Federal Law No. 34-FZ from March 18, 2019 «On Amendments to the First, Second and Article 1124 of the Third Parts of the Civil Code of the RF» came into force on October 1, 2019.
In order to reduce external sanctions pressure, a list of information that listed companies have the right not to disclose has been determined by the Resolution of the Government of the Russian Federation dated 04.04.2019 No. 400.
The significant changes in the Tax Code of the Russian Federation were made in accordance with the Federal Law No. 63-FZ from 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.
Since June 1, 2019 starts the prolongation of capital amnesty that provides relief from responsibility for currency and tax violations for Russian citizens who have returned their assets to the country voluntarily.
On July 1, 2019, the Federal Law No. 71-FZ from May 01, 2019 with amendments that improve the contract system of public procurement, entered into force.
Data from the Unified State Register of Legal Entities (EGRUL) on companies under sanctions and Crimean legal entities will be closed. The Resolution of the Government of Russia No. 729 from June 06, 2019 entitles not to disclose shareholders, management and licenses of mentioned legal entities in EGRUL.
According to the amendments, made by the Federal Law No. 105-FZ from May 29, 2019 to the Articles 11.1 and 20 of the Federal Law «On Banks and Banking Activities» and to the Article 189.64 of the Federal Law «On Insolvency (Bankruptcy)», the amount of creditor`s claim is defined without reference to minimum wage. In case of claim`s nonfulfillment the Central Bank of the RF is obliged to revoke license of a credit institution.
On October 1, 2019 the «Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting» entered into force in Russia.
A new chapter 22.2 «Investigation of cases on Protection of Rights and Legal Interests of group of people», was entered to the Civil Procedural Code of the RF by the Federal Law No. 191-FZ from July 18, 2019. That makes it possible for individuals and companies to apply to the court for protection of rights and legal interests of group of persons. Amendments came into force on October 1, 2019.
The amendments to the Law On development of small and medium-sized businesses were introduced in accordance with the Federal Law №245-FZ from July 26, 2019. The changes approved the concept of social enterprise and social entrepreneurship.
Assignment of the right or demand on the collection of overdue debts on payment of residential premises and for utility services to third parties is prohibited in Russia from the moment of publication of the Federal Law №214-FZ dated 26.07.2019, which amended the Housing Code of the RF, the laws «On the protection of rights and legal interests of natural persons in cases of debts collection» and «On microfinance activities and microfinance organizations».
New settlement arrangements were set within the legal proceedings in general jurisdiction and arbitration courts. The changes came into force on October 25, 2019. The relevant changes were made to the Code of Administrative Judicial Procedure, Arbitral and Civil Procedural Codes of the Russian Federation by the Federal Law No.197-FZ from July 26, 2019.
On July 26, 2019, the Federal Law No. 47-FZ from July 26, 2019 entered into force with amendments to the law «On financial accounts» and other legislative acts related to regulation of accounting.
Since August 13, 2019, the purchase from citizens of products made from precious metals and stones, the processing of scrap from them are subject to obligatory licensing. This provision is contained in the Federal law No. 282-FZ dated 02.08.2019.
The minimum size of equity of microcredit organizations was changed. It is regulated by the Federal Law No. 271-FZ from August 2, 2019.
In order to create the Unified register of small and medium-sized supported enterprises, the Federal Law No. 279-FZ from August 2, 2019 amended the Law "On development of small and medium-sized enterprises in the Russian Federation".
The Federal Law No. 59-FZ from April 15, 2019, that made amendments to the Article 17 of the Housing Code of the RF, came into force on October 1, 2019. Therefore, according to the amendments, activities of hostels on providing hotel services in residential houses are forbidden.
The amendments to the Arbitration Procedure Code began to act since October 1, 2019. Now only persons with higher legal education or degree in legal profile could be representatives of the parties during trial of civil and arbitration cases. The provision is included in the Federal Law No. 451-FZ from November 28, 2018.
By Resolution of the RF Government No. 1216, the amendments to the fire prevention rules were made. These amendments are mainly concern the buildings wherein trading companies, medical, cultural and educational institutions are based.
Amendments were made by the Order of the Federal Tax Service of Russia (FTS) as of September 27, 2019 № ММВ-7-22/487@ to the corresponding formerly published orders, regarding criteria for being qualified as the largest taxpayers and subjected to tax administration in the specified interregional inspectorates of the FTS.
The Federal LawNo. 377-FZ from November 12, 2019 FZ adopted amendments to legislative acts relating to the entry of information into the Unified State Register of Legal Entities (EGRUL), the Unified State Register of Sole Entrepreneurs (EGRIP), the Unified Federal Register of Information on the Facts of the Activities of Legal Entities (Fedresurs). From November 12, 2019, legal entities are obliged to disclose information in Fedresurs concerning sale and transfer of the company for rent, liquidation, reorganization and reduction of the amount of the authorized capital.
Financial statements in the Federal Tax Service (FTS), “regulatory guillotine”, fight against hybrid tax reduction schemes, the last year of the single tax on imputed income, new deductions, and goods traceability.
What changes in laws are awaiting the business in 2020?
I. FINANCIAL STATEMENTS
- Financial statements for 2019 have to be submitted to the FTS alone. The companies are no longer obliged to submit financial statements to the Federal State Statistics Service (Rosstat).
- Since January 1, it is allowed to keep e-accounts certified with digital signature. Paper form is not required, but may be necessary if it is submitted to the counterparty or a government agency.
- The following organizations are exempted from submitting a mandatory copy of financial statements to the FTS: budget-financed organizations, the Central bank of Russia, religious organizations, organizations submitting reports to the Central bank of Russia, organizations reports of which contain information classified as state secret; if there are cases established by the Government of Russia.
Source: Federal law No. 444-FL as of November 28, 2018
- A line on obligatory audit has been added to the forms of 2020 financial statements; income tax is divided into current and deferred; a new line “Income tax on operations result, not included in net profit (loss) of the period” has been added; changes were made to the financial results report form for small and medium-sized businesses.
Source: Order of the Ministry of Finance of Russia No. 61n as of April 19, 2019
- New forms of invoices and the universal transfer document (UPD) are fully applied. From January 1, the use of old forms is not allowed.
Source: Order of the FTS of Russia No. MMV-7-15/820@ as of December 12, 2018
- Since 2020, organizations hiring foreign workers must submit information to the Ministry of Internal Affairs in a new form.
Source: Order of the Ministry of Internal Affair No. 363 as of June 04, 2019
- Starting from the 1st quarter of 2020, organizations must provide the FTS with the calculations of Insurance premiums in a new form.
Source: Order of the FTS of Russia No. MMV-7-11/470@ as of September 18, 2019
- Since the new year, Rosstat has updated many forms of statistical accounting and reporting for the corporate sector.
Source: Orders of Rosstat No. 404 as of July 15, 2019, No. 410 as of July 18, 2019, and No. 421 as of July 24, 2019
II. ACTIVITY OF COMPANIES
- From 2020, the Russian companies should take into account the provisions of the International Convention, which prevents the erosion of the tax base and withdrawal of profits from taxation, for any payments to foreign counterparties or non-resident individuals. The Convention addresses issues related to hybrid tax reduction schemes. Since 2020, the rules of the Convention apply to double taxation avoidance agreements, and since 2021, for all other taxes.
Source: Federal law No. 79-FL as of May 01, 2019; “ ” 01.05.2019 No 79-ФЗ; "Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting" (concluded on November 24, 2016 in Paris)
- At the end of 2020, as part of the development of AIS “TAX 3”, the FTS plans to introduce the “Climate Control” service, which will allow the taxpayer to evaluate the business or check the counterparty’s integrity.
"Passport of the Priority project "Development of the Automated Information System of the FTS of Russia (AIS "Tax-3") regarding the creation of an integrated analytical data warehouse and modernization of the information and analytical subsystem for the purposes of control work" ("Information and analytical subsystem for the purposes of the control work of the FTS of Russia")" (approved by the minutes of the meeting of the project committee No. 2 from March 27, 2018)
- Small and medium-sized businesses will be able to receive payment under contracts concluded under the 223-FL within up to 15 days, instead of 30 days. The rule is effective from January 1, 2020. This will significantly improve the company's financial planning and increase the attractiveness of procurement for participants.
Source: RF Government Decree No. 1205 as of September 18, 2019
- By December 20, 2020, the FTS should create a Unified register of small and medium-sized enterprises - recipients of state and municipal support. The new register will be placed on the FTS of Russia official website.
Source: Federal law No. 279-FL as of August 02, 2019
- By the end of 2020, amendments to the legislation should be prepared, repealing the several thousand normative legal acts adopted in the USSR and the RSFSR and still in force in Russia - the “regulatory guillotine”. Instead of them many new by-laws are being developed, including those related to industry regulation.
Source: The action plan (“Road Map”) for the implementation of the mechanism of the “regulatory guillotine” (approved by the Government of the Russian Federation on May 29, 2019 No. 4714p-P36)
- From June 1, 2020, with dairy products will be added to the list of goods subject to mandatory labeling. Mandatory labeling of goods should completely cover the “gray” imports into Russia. On December 31, 2019, the FTS experiment on introducing a “traceability” mechanism ended, within which tax specialists worked out a system for tracking the movement of each unit of marked goods.
Source: RF Government Decree No. 515 as of April 26, 2019 26.04.2019 N 515; "Agreement on the traceability mechanism of goods imported into the customs territory of the Eurasian Economic Union" (concluded on April 29,2019 in Nur-Sultan); RF Government Decree No. 792-r as of April 28, 2018
- Profit tax
From January 1, tax is payable on income paid by a foreign organization to its Russian shareholder, regardless of the taxation of such payment in a foreign jurisdiction.
Source: Federal law No. 325-FL as of September 29, 2019
From January 1, companies will be able to receive VAT deductions from purchases to create trademarks, patents and other intangible assets. To get the deduction, organizations do not need to wait for the actual use of the asset.
Source: Federal law No. 325-FL as of September 29, 2019
- Corporate property tax
From January 1, organizations will pay real estate tax, regardless of whether the property is accounted for as fixed asset or not. The maximum rate amount is 2%.
Source: Federal law No. 325-FL as of September 29, 2019
From January 1, the list of objects of taxation on the cadastral value has been expanded: residential premises; garages; car parking spaces; construction in progress; residential buildings; garden houses.
Source: Federal law No. 379-FL as of November 28, 2019
- Single tax on imputed income
From January 1, a ban is imposed on the use of the single tax on imputed income by organizations and entrepreneurs engaged in retail sale of mandatory labeling goods: medicines, shoes, and fur products. Recall that from January 1, 2021 the single tax on imputed income is canceled for all organizations.
Source: Federal law No. 379-FL as of November 28, 2019; Order of the Ministry of Economic Development of Russia No. 684 as of October 21, 2019
Organizations involved in the integrated development of the territory will be able to return up to 100% of the amount of expenses for the creation of transport and communal infrastructure objects, and up to 80% of the amount of expenses for the creation of social infrastructure objects from January 1. One can use the investment deduction until 2027.
Source: Federal law No. 210-FL as of July 26, 2019
In 2020, it is planned to develop important bills aimed at combating the artificial reduction of the tax base, which so far remains an urgent problem for the economy. Serious changes are being prepared related to inspections of the corporate sector, in connection with which the business community hopes to simplify audit procedures. The Federal Tax Service plans to begin to develop a mechanism to identify gray salaries in companies, for which it intends to use its experience in foreign exchange and financial control. We will continue to inform you about these and other innovations in the legislation and analyze the consequences of their application. We hope that the changes will have a positive effect on the business climate and the economy in the country.