Gorodissky & Partners updates

Russia revises double tax avoidance agreements with numerous countries
Gorodissky & Partners
  • Corporate Tax
  • Russia
  • 18 September 2020

In 2020 Russia launched an intensive process of revising its bilateral tax agreements with numerous jurisdictions. According to the Cyprus minister of finance and the Russian Ministry of Finance, significant amendments to the double tax avoidance agreement between Russia and Cyprus were agreed in August 2020. The most important amendment is the increase in the tax rate levied on the payment of dividends and borrowed money.

New tax relief for IT industry
Gorodissky & Partners
  • Tech, Data, Telecoms & Media
  • Russia
  • 17 July 2020

President Vladimir Putin recently announced the next set of measures to amend tax legislation to help the Russian economy overcome the crisis caused by the COVID-19 pandemic. Most of the new tax changes relate to companies in the IT industry, for which a so-called 'tax manoeuvre' has been proposed in order to significantly reduce the corporate income tax rate for such companies from 20% to 3%.

New tax relief for IT industry
Gorodissky & Partners
  • Corporate Tax
  • Russia
  • 17 July 2020

President Vladimir Putin recently announced the next set of measures to amend tax legislation to help the Russian economy overcome the crisis caused by the COVID-19 pandemic. Most of the new tax changes relate to companies in the IT industry, for which a so-called 'tax manoeuvre' has been proposed in order to significantly reduce the corporate income tax rate for such companies from 20% to 3%.

New rules and procedures for blocking mobile apps distributing pirated content
Gorodissky & Partners
  • Tech, Data, Telecoms & Media
  • Russia
  • 10 July 2020

Recent amendments to the Information Law aim to tackle the issue of mobile apps and e-platforms that distribute pirated content which infringes copyright and related rights. This article examines upcoming amendments and highlights the new enforcement possibilities that will be available to rights holders in Russia. The changes will also be relevant for businesses that own and operate mobile apps, which should consider the associated risks if their mobile apps contain pirated content.

Draft Big Data law provides clues of what to expect
Gorodissky & Partners
  • Tech, Data, Telecoms & Media
  • Russia
  • 08 May 2020

Although the term 'Big Data' is now common, no Russian legal provision deals expressly with the processing of such data. Various legislative initiatives have attempted to introduce a specific legal framework in this regard, including a recent draft law which aims to create a specific legal regime for Big Data processing. Although the draft law received negative feedback from the government, it is useful to consider the Ministry of Digital Development, Communications and Mass Media's approach when shaping it.

Tax measures to support businesses during СOVID-19 pandemic
Gorodissky & Partners
  • Corporate Tax
  • Russia
  • 01 May 2020

The COVID-19 pandemic and the measures taken to combat it will have a significant impact on both the global and Russian economies. The government has taken a number of measures to stop the spread of the virus, such as suspending the activities of most Russian businesses, including service providers, from 27 March until 30 April 2020. As such, the government has also had to adopt a comprehensive support programme for affected businesses.

Calculating share of Russian immovable property for corporate income tax purposes
Gorodissky & Partners
  • Corporate Tax
  • Russia
  • 21 February 2020

At the end of 2019, the Federal Tax Service issued clarifications on calculating the share of Russian immovable property in the indirect sale of such property for corporate income tax purposes. The clarifications are especially relevant as the Russian tax authorities' powers have grown following the signing and ratification of a number of international agreements on the exchange of tax information in recent years.

Regulator clarifies key aspects of trademark use in keywords
Gorodissky & Partners
  • Tech, Data, Telecoms & Media
  • Russia
  • 13 December 2019

Keywords play an important role in e-marketing. After typing a specific product name, company name or brand in a search engine, potential customers and users may view specific offers and data, including ads. Further, the list of offers may represent certain keywords selected by an advertiser. Unsurprisingly, the selection and reproduction of designations as keywords can trigger various trademark use concerns that inevitably lead to enforcement issues.

Main changes to company taxation in 2020
Gorodissky & Partners
  • Corporate Tax
  • Russia
  • 13 December 2019

Over the past year, Parliament has adopted several laws amending the Tax Code regarding the taxation of legal entities. This article examines the most significant tax innovations expected in the corporate sector in 2020 which concern corporate income tax, transport and land taxes and changes in tax administration rules.

Russia ratifies MLI
Gorodissky & Partners
  • Corporate Tax
  • Russia
  • 19 July 2019

Federal Law 79-FZ on the Ratification of the Multilateral Convention to Implement Tax Treaty-Related Measures to Prevent Base Erosion and Profit Shifting recently entered into force. Once the ratification procedure has been completed, the convention will enter into force in Russia, introducing changes to the taxation procedure for transactions with counterparties from a large number of countries that have concluded double tax avoidance agreements with Russia.

Federal Anti-monopoly Service clarifies role of online messenger systems in advertising
Gorodissky & Partners
  • Tech, Data, Telecoms & Media
  • Russia
  • 12 July 2019

Advertisers are increasingly using online messenger systems to promote businesses, as well as their goods and services. In this context, the Federal Anti-monopoly Service recently issued an official letter clarifying, among other things, the application of the Federal Law on Advertising to messenger systems such as Viber and WhatsApp. The letter is notable as it reveals the regulator's approach to advertising campaigns disseminated via various instant messaging services.

New law introduced to regulate digital rights
Gorodissky & Partners
  • Tech, Data, Telecoms & Media
  • Russia
  • 17 May 2019

The president recently signed the Digital Rights Law, which will take effect on 1 October 2019. The law has introduced a number of new legal concepts into Russian legislation, including digital rights, e-transactions, smart contracts and Big Data. Companies doing business on the digital level in Russia should familiarise themselves with the background and key provisions of the law to ensure that they are ready to operate in the new legislative environment.

FTS approves form of inquiry regarding beneficial owners
Gorodissky & Partners
  • Corporate Tax
  • Russia
  • 01 March 2019

The Federal Tax Service recently approved a form of inquiry which it will use to request information from legal entities regarding their beneficial owners in order to, among other things, identify tax evasion schemes. For the purposes of the law, 'legal entities' means not only Russian legal entities, but also foreign legal entities, including those that perform economic operations in Russia and interact with Russian clients.

Russian authorities apply GDPR-style rules to web analytics
Gorodissky & Partners
  • Tech, Data, Telecoms & Media
  • Russia
  • 01 March 2019

Roscomnadzor (the Russian data protection authority) recently filed a landmark action against illegal personal data processing by Google Analytics and Yandex Metriсa. If the authority succeeds in the appeal court, Russian websites will have to welcome users with EU General Data Protection Regulation-style cookie banners and privacy policies. Prior to this case, the Russian internet community had not considered statistical information concerning web traffic and user actions to constitute personal data.

Price increases expected following VAT changes
Gorodissky & Partners
  • Corporate Tax
  • Russia
  • 18 January 2019

The basic value added tax (VAT) rate recently increased from 18% to 20%. The new rate will apply to all goods, works and services which are sold, performed or provided from 1 January 2019. In addition, several estimated tax rates have also been amended. As entities are expected to reflect the increased VAT rate in the price of their goods, economists predict a rise in prices associated with the increase in early 2019.

New legal initiatives to regulate Big Data
Gorodissky & Partners
  • Tech, Data, Telecoms & Media
  • Russia
  • 30 November 2018

Bill 424632-7 on the Amendment of Parts 1, 2 and 4 of the Civil Code of the Russian Federation (the Digital Rights Bill) and Bill 571124-7 on the Amendment of the Federal Law on Information, Information Technologies and Data Protection (the Big Data Bill) were recently submitted to Parliament for discussion. Both bills are essential developments, especially given the increasing interest in and high value of Big Data in the current digital reform.

FTS publishes information on taxpayer obligations and financial reporting
Gorodissky & Partners
  • Corporate Tax
  • Russia
  • 02 November 2018

The Federal Tax Service recently began publishing information concerning the various obligations of Russian taxpayers (ie, legal entities) and their financial reporting on its website. This practice is new in Russia, as such information was previously classified as tax secrets and, by virtue of the Tax Code, could not be disclosed. This development is useful not only for Russian taxpayers, but also for foreign companies choosing Russian counterparties.

Tax authorities to be given access to audit documents
Gorodissky & Partners
  • Corporate Tax
  • Russia
  • 21 September 2018

In January 2019 a new law will come into force enabling the tax authorities to request client-related documents from auditors which constitute 'auditing secrets'. This law marks the end of years of struggle by the tax authorities to gain access to audit documents. Although these changes carry no significant risks for bona fide taxpayers, the business community is concerned that the authorities may be able to request auditors' documents and opinions on related services, such as accounting and tax consulting.

GDPR is haunting Russia: compliance challenges
Gorodissky & Partners
  • Tech, Data, Telecoms & Media
  • Russia
  • 18 September 2018

The EU General Data Protection Regulation (GDPR) applies internationally and can encroach on the national laws of non-EU countries. In Russia, international companies must fulfil the requirements of both the GDPR and local laws, even though they may contradict each other. Companies should follow a number of recommendations in order to find the most practical solutions, mitigate relevant legal risks and keep their noses clean should Roscomnadzor try to find fault with them.

New approach to beneficial owners of income
Gorodissky & Partners
  • Corporate Tax
  • Russia
  • 17 August 2018

The Federal Tax Service (FTS) recently issued a letter providing an extensive explanation of the tax authorities' application of the beneficial owner of income (BOI) concept. This concept was previously referred to only in the international tax treaties between Russia and other states, but has recently been actively implemented into Russian tax legislation. In this regard, the FTS's letter is of great interest, as it summarises the approach of both the courts and the tax authorities with regard to resolving BOI issues.

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