Translated material
Software
IT companies are promised the lowest taxes in the Russian economy
A “special regime” may soon appear in the Tax Code. On Tuesday, the tax subcommittee of the State Duma supported a bill providing benefits for IT companies.The bill introducing a special tax regime for enterprises in the information technology industry provides programmers with very serious benefits. Such low tax rates as the deputies propose to establish for IT firms, namely a single tax of 6% of profits (income minus expenses), were not given even to small businesses at one time. Under the simplified system, small entrepreneurs pay the same 6%, but from the full amount of income, without deducting expenses.
As the developers of the document say, the bill is written exclusively for “programmers,” that is, those organizations that develop and implement programs and databases on a tangible medium or in electronic form via communication channels. At the same time, IT companies are subject to a set of strict restrictions - from mandatory accreditations to the number of employees. The enterprise must employ at least 100 people. In addition, software developers are subject to restrictions on the share of income from the sale of software. The share of such income must be at least 70% of the company's total income. If at least one of the restrictions is violated during the year, the taxpayer will be required to return to the general taxation regime.
For quite a long time, the government did not have a common point of view on the introduction of such benefits. The Ministry of Finance insisted that providing benefits to a particular industry would create a dangerous precedent for other industries to lobby for the same conditions. The Ministry of Economic Development argued that it is better to limit benefits to those companies that will be created in special economic zones. Now, although the government supports the bill (the government’s opinion changed on this matter after President Putin actively supported the development of the IT industry), it insists on significant revision of the document.
According to Mikhail Motorin, a representative of the Ministry of Finance, “the bill in its current form provides opportunities for minimizing taxes for a very wide range of people, and the already small tax revenues from the IT sector will decrease even more.” The government proposes to clearly limit the list of companies entitled to “special treatment”. True, so far there is no clear and unified understanding in the cabinet of ministers whether it should include only firms emerging in special zones, or also those that are already operating in the market.
There is also a small chance that after the first reading, if it goes well, the deputies will change the tax rate itself, leaving the same 6%, but not on net profit, but on the full tax base.
The industry itself reacted quite calmly to innovations. If benefits are applied only to enterprises in free zones, then the innovation will affect companies that currently exist only on paper (despite the fact that the zones themselves are mostly still only on paper). If the scope of the industry is wider, then today of the organizations operating legally, the majority exist in the format of small businesses and report taxes according to a simplified system, that is, at a rate of 6% of income. However, there are not many legal “programming” companies on the market.
“The industry pays virtually no taxes today,” says Andrei Makarov, deputy chairman of the State Duma budget committee. “The purpose of the bill is to use a “special regime” to bring these enterprises out of the shadows, as is happening all over the world.” And representatives of the IT industry itself add that their main competitors - programmers in India and China - have long enjoyed unique tax preferences.