The State Duma on Tuesday adopted a number of bills in the first reading.
In particular, a bill was adopted that clarifies the areas of activity in which the patent taxation system (PSN) can be applied, first of all, the amendments relate to the retail trade and catering services, outdoor advertising and parking lots, and a tax deduction is also provided.
The bill (N973160-7) was introduced to the State Duma by the government in June.
Under the current legislation, under the patent system, retail enterprises can operate in stationary facilities with a sales area of no more than 50 sq. m. This threshold rises to 150 sq. m. m. A similar increase in area from 50 sq. m. m up to 150 sq. m will affect catering services. At the same time, the regions are given the right to reduce the specified maximum dimensions of the trading floor area and the area of the customer service hall.
The list of services that can be provided under the PSN is changing, now the list includes the washing of vehicles, motorcycles, machinery and equipment, the repair of non-residential premises (previously, the Supreme Court clarified that the PSN cannot be applied in relation to activities for the repair of buildings not related to residence citizens – IF). The PSN perimeter includes services for the care of pets, the production of meat products, vegetable oils and fats. Also, the patent system can be used in the provision of services for the storage of vehicles in paid parking lots, the distribution of outdoor advertising using advertising structures, the placement of advertising using the external and internal surfaces of vehicles.
“The draft federal law also provides the right to taxpayers of the PSN to reduce the amount of tax paid in connection with the use of the PSN, on insurance payments (contributions) and benefits accrued for the tax period,” the explanatory note says.
If adopted, the law will enter into force one month after its official publication, but not earlier than the 1st day of the next tax period for the tax paid in connection with the application of the PSN.
The patent taxation system (PSN) can only be applied by an individual entrepreneur and only for certain types of activities. PSN can be combined with any taxation system. The average number of employees at PSN should be no more than 15 people, and income from all patent activities should not exceed 60 million rubles per year. The patent replaces personal income tax and VAT. Property tax for real estate used for activities on a patent must be paid only at the cadastral value. An individual entrepreneur on a patent pays insurance premiums for himself, as well as personal income tax and contributions for employees according to general rules. You can get a patent for a calendar year or for several months during the year.
In the first reading, a bill was also adopted that allows municipalities to issue each other “horizontal” budget loans for up to 3 years in 2020. Previously, this measure was introduced for regional budgets.
The bill (N986957-7) was introduced to the State Duma in July by a group of senators.
According to the current Budget Code of the Russian Federation, budget loans for up to 3 years can be issued from the budgets of municipal districts only to the budgets of urban and rural settlements – “vertical” loans. The draft law, adopted in the first reading, makes it possible to issue budget loans for up to 3 years from the budget of a municipal formation to the budget of another municipal formation – “horizontal” loans.
Both municipalities should be part of one constituent entity of the Russian Federation, the practice of providing these loans should be enshrined in regional legislation.
At the end of April, the State Duma adopted a law that introduced the practice of providing “horizontal” loans for 2020 for regional budgets. Prior to this, the regions could receive budget loans from the federal budget for a period of up to 5 years and provide loans to local budgets for a period of up to 3 years.
In the first reading, amendments to the Tax Code (TC) were adopted, which lead to uniformity of law enforcement practice in relation to taxation of controlled foreign companies (CFC).
The bill (N990129-7) was introduced to parliament by a group of deputies in July.
“The bill has been developed to settle issues in respect of which there is no uniform law enforcement practice or there is uncertainty that requires elimination by improving tax legislation, as well as maintaining and stimulating business activity of economic entities and creating competitive conditions for business development,” the explanatory materials to document.
It is proposed, in particular, to exclude dividend income and the corresponding amount of withholding tax from the calculation of the effective tax rate for CFC profits in cases where the actual recipient of dividends is the controlling person – a Russian tax resident. “In this case, the CFC does not have the right to dispose of such dividends in the course of its economic activities and does not bear the tax burden in connection with their receipt,” the materials to the bill say.
The amendments make it possible to move from a special to a general procedure for adjusting a CFC's profit in relation to transactions with derivative financial instruments (PFIs).
The document clarifies the concepts of a foreign holding (sub-holding) company, the criteria for exemption of CFC profits from taxation if the foreign holding company is recognized as active.
The procedure for determining CFC expenses when selling shares in the authorized capital of organizations, shares in mutual funds of cooperatives and mutual investment funds, securities, and derivatives is being unified.
The government earlier in its opinion supported the draft law, proposing to amend some of the rules to suppress the practice of manipulating the conditions necessary to exempt CFC profits from taxation. “In particular, when changing the conditions for recognizing a foreign organization as a foreign holding company (HC), the criterion for the share of participation in another foreign organization must be set in relation to each foreign organization at a level of at least 15%, the taxpayer must be obliged to confirm the fact of payment of the tax calculated in relation to the profits of a CFC in a foreign state, “the conclusion says. In addition, the government believes that it is necessary to determine that the projected changes will apply to CFC profits starting from 2020.
Also on Tuesday, in the first reading, the State Duma adopted amendments to the Tax Code (TC), which enshrine the creation in the Russian Federation from January 1, 2021 of a mandatory national system of traceability of goods (NSP), now it is working as part of an experiment. There is a phased introduction of fines for violations from January 1, 2022 and July 1, 2022.
The bill (N991147-7) was submitted to the State Duma at the end of July. The Tax Code introduces the definition of NRS, it is an information system that accumulates the collection, accounting and storage of information about goods that are subject to traceability. The list of such goods will be determined by the government, the goods will be identified by codes (OKPD-2 and TNVED). As a general rule, goods will have to enter the system from the moment they are released into the territory of the Russian Federation for domestic consumption. Also included are goods imported from the territory of the EAEU member states, with the exception of goods within the framework of customs transit. Goods – also as a general rule – fall out of the system when they are sold to individuals, when they are exported, as well as when they are transferred to production, burial, disposal, irrevocable loss, confiscation and export to the EAEU countries.
As part of the implementation of this law, the Federal Tax Service will be able to conduct a cameral tax audit with the demand from the taxpayer of the invoice, primary and other documents.
Types of tax violations are supplemented. So, from January 1, 2022, for failure to submit or untimely submission to the Federal Tax Service of a report on transactions with goods within the framework of the EPT, in the absence of signs of tax violations, it assumes a fine of 1,000 rubles for each non-submitted or late submitted document. Failure to submit an invoice or document on the shipment of goods – 200 rubles per document. By July 1, 2022, the system for forming the NRS will be completed, then all the fines provided for by the new legislation will come into force.
Information about the end of the traceability of the goods in the event of its disposal, processing or sale to individuals who are not individual entrepreneurs, taxpayers are required to include in a specialized quarterly report submitted to the tax authority. Information on transactions of sale and purchase of traceable goods between taxpayers will be included in the VAT declaration (for VAT taxpayers) or the specified report (for persons who are not VAT payers) and also submitted to the tax authority on a quarterly basis.
The explanatory note emphasizes that the traceability of goods is carried out on a documentary basis without applying control and identification marks to the goods. This is the difference between the NRS and the product labeling system that is currently in effect for a number of goods on the territory of the Russian Federation.
The NRS is now working in the Russian Federation as part of an experiment, the timing of it is from July 1, 2019 to December 31, 2020. The information system is being tested for the collection, accounting, storage and processing of information about goods to counter illegal import. Participation in the system is voluntary.