§I. Shift of tax filing deadlines
The non-working period has been extended to April 30 (by the President Order of April 02, 2020, No. 239). The Order does not however apply to the business sectors specified in the Order or resolutions issued by local supreme executive authorities of constituents of the Russian Federation.
Earlier, amendments were made to the Tax Code (Section 6.1) to introduce the definition of “non-working day” and to shift the filing deadline to the next working day where the filing deadline falls on a non-working day. Thus, generally, the deadline for filings which should have otherwise been made during the period starting from the “non-working month” will be May 6, 2020.
§II. Tax measures to support small and medium businesses
§III. Grandfather clause for investors
According to the recently introduced provision, taxpayers who are parties to a bilateral investment agreement will be exempt from further changes to the tax legislation, other than tax benefits (Federal Law of April 1, 2020, No. 70-ФЗ). This means that taxpayers are given guarantees that their tax situation will not worsen in the course of activities related to performance of their agreement.
§IV. Strengthening tax burden since 2021
Rate increase for tax at source on payments of interest, dividends or royalty in jurisdictions recognized as transit jurisdictions
The RF Government is preparing changes to its existing double taxation treaties with a number of jurisdictions which the RF Ministry of Finance regards as jurisdictions used for transit withdrawal of funds. According to the information available, such changes should include increase of the rate for tax at source on dividends, royalty and interest to 15%, regardless of whether or not the recipient of income is its beneficial owner. Cyprus, being traditionally in the focus of attention of Russian tax authorities, is the first jurisdiction which has received Russia’s proposal to revise the tax rates. The Government plans to prepare by April 25 proposals on further measures to increase tax burden on outgoing cash flows from the country.
Individual income tax on interest income
Effective as of 2021, the individual income tax will be levied on bank deposit interest where the yield rate exceeds 1% per annum. The permitted tax-exempt minimum will be equal to income calculated as follows: Central Bank’s interest rate at the tax period start multiplied by RUB 1 million. The tax rate will be 13%. The 35% rate for interest income exceeding the Central Bank’s refinancing rate will no longer apply.
Also, the exemption from individual income tax on coupon yield derived from government or municipal bonds will no longer be in effect.