Russia, Gorodissky & Partners updates

Corporate Tax

Contributed by Gorodissky & Partners
New approach to differentiation of intragroup service and shareholder activity expenses
  • Russia
  • 02 April 2021

In recent years, intragroup services provided by foreign parent companies to their Russian subsidiaries have come under scrutiny. As such, a shareholder activities test was added to the tax audit process in order to identify profit distribution disguised as service fees. To clarify the authorities' approach to conducting this test, the Federal Tax Service has issued a letter which defines shareholder activities with regard to intragroup services and clarifies when intragroup services will qualify as shareholder activities.

Important changes to taxation of transactions involving property rights transfers
  • Russia
  • 12 February 2021

Numerous tax law amendments recently entered into force, including the introduction of a rule concerning the taxation of transactions involving the transfer and acquisition of property rights. Now, the law directly states that property rights, along with other property, are exempt from taxation. The introduction of this rule has put an end to numerous disputes between the tax authorities and taxpayers with respect to transfers of property rights between parents and their subsidiaries.

New tax system for controlled foreign corporations
  • Russia
  • 04 December 2020

Federal Law 368 of 11 September 2020, which could significantly simplify the tax payment process for the owners of a large number of controlled foreign corporations (CFCs) and significantly reduce such taxes in some cases, was recently adopted in Russia. It is fair to say that, in a sense, the new legislation introduces an alternative simplified tax system for CFC owners. However, the new tax regime will not be beneficial to all taxpayers.

Russia revises double tax avoidance agreements with numerous countries
  • 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
  • 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%.


Tech, Data, Telecoms & Media

Contributed by Gorodissky & Partners
New regulations for processing publicly available personal data
  • Russia
  • 29 January 2021

A new law is set to introduce amendments to the existing regulations concerning publicly available personal data. The law introduces the new notion of 'public personal data' and sets out the data processing aspects relating to such data. It also concerns the protection of personal data which is made publicly available and deals with particular situations where data users have published information about themselves, resulting in the dissemination of such data by other persons.

Newly proposed amendments to data processing operations
  • Russia
  • 11 December 2020

A recently introduced draft law aims to clarify the Personal Data Law's data processing procedures. If the draft law is adopted into law, businesses acting as data operators will need to review their data protection documents (ie, consent documents), technical security measures and data processing activities and revise them to be compatible with the proposed amendments and the Federal Service for Supervision of Communications, Information Technology and Mass Media's requirements.

New tax relief for IT industry
  • 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
  • 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
  • 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.


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