Frequently asked questions to Russian tax support measures

08/04/2022

Can a foreign company forgive a loan provided to a Russian company?

Yes, it’s possible. Moreover, if borrowings were made before 01.03.2022 it is possible to forgive liabilities, including debt and interests, free of the CIT, if this happened during 2022.

Can my Russian company accelerate the refund of VAT?

Yes, but only limited period of time and if your company is not in the process of reorganization/liquidation, insolvency procedure. If the amount of such refund exceeds the total amount of taxes and duties, it will be needed to receive a bank guarantee under the standard refund procedure to the return of excessive amount.

Can state authorities control our activity?

Tax field audits are frozen for accredited IT companies. Regular currency control is on hold, except for special control of operations with foreign currencies caused by the newly imposed restrictions; scheduled inspections are on hold for SMEs.

Is it possible for us not to prepare transfer pricing documentation and TP notification for our Russian company?

No exclusions are provided in the legislation. However, starting from 2022, transactions are considered controlled if total value exceeds RUB 120 mio. This may change the situation in future.

We want the Russian IT company to apply the zero CIT rate. What are the pitfalls?

Additional tax incentives were granted to IT companies making the so-called IT maneuver more attractive. To apply the incentive it is needed to receive accreditation, employ at least 7 persons and track the structure of revenue, because at least 90% of income must be from specific IT activities.

Why is payment of advanced CIT payments beneficial, if it’s based on profits actually received during a reporting period?

This allows keeping money for the needs of your Russian company and not spending much time for refund or offset against future payments in the future periods.

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