What's coming up for business in Russia?
Tax Accounting For Employee Vacation-Related Expenses
Draft Law #162100-7, passed the First Reading in the State Duma on September 22, 2017.
The draft law would allow employers to categorize as "expenses aimed at profit-making" the costs of services related to organizing tourism and recreation in the Russian Federation for employees and members of their families (source: General Ledger (magazine), 2017, No. 10, p. 92).
The following restrictions on the amount would apply:
- no more than 50 thousand rubles. per year per person;
- cannot constitute more than 6% of total labor costs (including costs of voluntary personal insurance and medical services).
The draft law is expected to undergo further development to clarify how the amounts would affect income taxes for employees' family members. Currently, the employer would have to report the impossibility to withhold taxes on the income of these natural persons; employees' family members would then have to independently declare the amounts as income and pay personal income tax on that income.
Bank Deposit Insurance For Small Business
Draft Law #194162-7, passed its First Reading in the State Duma on September 27, 2017.
The draft law would extend the system of bank deposit insurance for private persons to bank deposits and accounts for small enterprises (source: General Ledger (magazine), 2017, No. 12, page 95). Companies with an average number of up to 100 employees and annual revenues of up to 800 million rubles would qualify. The maximum amount of an insurance disbursement would be the same as for entrepreneurs as for ordinary citizens: 1.4 million rubles.
By the next reading, the deputies will discuss how changes in the status of a small enterprise will affect insurance disbursements.
Tax Breaks After 2018
Draft Law #274631-7, submitted by the Government for consideration by the State Duma on September 29, 2017.
The draft law proposes several important changes for taxes and insurance premiums:
- Registered private entrepreneurs would pay fixed insurance premiums next year for themselves with no reference to the minimum wage: for pension insurance – 26,545 rubles (if profit exceeds 300,000 rubles - 26,545 rubles plus 1% of the income, but a maximum of 212,360 rubles), for medical insurance - 5,840 rubles. These amounts would be indexed in subsequent years.
- The property tax exemption for movable assets registered in 2013 and after, set to expire this year, would be extended for next year. After January 1, 2019, regions would have the option to locally re-introduce the tax.
- Organizations would be granted profit tax deductions (from advance payments) for expenses related to the acquisition or modernization of fixed capital that falls under depreciation groups 3-7. Fixed capital categories that this would apply to would be decided by each region. Use of the deduction would be mutually exclusive to the use of amortization premiums.
30% Insurance Premium Rate Extended To 2020
Draft Laws #274632-7 and 274633-7, submitted by the Government for consideration by the State Duma on September 29, 2017.
The current insurance premiums would be extended to 2020. The total rate is 30% (pension insurance - 22%, social insurance - 2.9%, medical insurance - 5.1%). These rates are currently specified for use only in 2017 - 2019.
In addition, lawmakers will delay the transition period for direct payments of benefits to citizens by Social Insurance Fund offices from 2021 to 2025. Therefore, the current procedure under which beneficiaries pay for benefits through assessed insurance premiums will be applied until the end of 2024.
Expansion Of Exemptions From Cash Register Use Requirements
Draft Laws #273256-7 and 274232-7, submitted by the Government for consideration by the State Duma on September 29, 2017.
The first draft law would postpone the end of the transition period during which some organizations and individual entrepreneurs retain the right to not use cash registers. This period would end July 1, 2019 rather than July 1, 2018 for those:
- using unified tax on imputed income
- using the patent system of taxation;
- conducting business through vending machines;
- rendering services to the public.
The second draft law would allow cash registers to not be used in certain low-margin kiosks. Specifically, this would apply to those selling bread and bakery products as well as those selling ice-cream and bottled, non-alcoholic drinks.
Translated by Alinga Consulting Group.
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| ||Source: Журнал «Главная книга», 2017, №20|| |