In 2016 new regulations regarding calculation and payment of personal income tax came into effect. The following are the most significant:
The amount of income that can be received by a person to be granted the tax deductions for children has been increased from 280 to 350 thousand rubles.
Taxpayers now have an opportunity to receive social tax deductions for education and medical services before the end of the tax period from an employer (a tax agent) on the basis of a written request and a document confirming the right to such deduction issued by the tax authority.
Taxpayers have obtained the right to property-related tax deductions not only upon selling a share (or a part thereof) in the authorized capital of commercial companies, but also upon withdrawal from a company, transfer of assets (property) to a company member in case of liquidation of a company or a decrease in the nominal value of the share in the company authorized capital. In such cases, a taxpayer has the right to decrease taxable income by the sum of expenses actually spent and documentarily confirmed, connected with the acquisition of the said property, or by the sum totally not exceeding 250 000 rubles for the tax period.
New regulations of taxation of revenue received from the sales of real estate: a minimal time limit for ownership of the real estate providing for exemption from the personal income tax on income from its further realization has been increased to 5 years. However, the previous time limit of three years is still effective for some types of real estate. At the same time, this term can be decreased even to zero by laws of the Russian Federation subjects (Art. 217.1 of the Tax Code).
The procedure of crediting tax paid abroad by a natural person being a resident of the Russian Federation, as well as exemption of natural persons being foreign residents from payment (withholding) of tax from the source of revenue payment in the Russian Federation, if such crediting and (or) exemption are stipulated by the international agreements of the Russian Federation, has been specified.
Tax agents, in addition to the annual 2-NDFL form, shall now submit to the tax authorities quarterly calculations of estimated and withheld personal income tax amounts. In case of failure to provide the calculation, a fine in the amount of 1000 rubles is imposed for each month or a part thereof, starting with the day defined for submission of the calculation, as well as the suspension of the agent’s operations on bank accounts (Art. 126(1.2) of the Tax Code of the Russian Federation).
The Tax Code has been supplemented by the Article 126.1 providing for responsibility of a tax agent for filing documents containing invalid data with the tax authority, in the amount of 500 rubles for each document.
For Profit Tax purposes , property used from 01 January 2016 and having an initial cost of more than 100 thousand rubles shall be considered as depreciable.
The limit of quarterly income above which companies must make advance payments on profit tax ), has been increased from 10 to 15 million rubles. Newly established companies must make only quarterly advance payments, if their revenue does not exceed 5 million rubles per month or 15 million rubles per quarter.
For purposes of recognition in tax accounting of revenues and expenses stated in rubles and resulting from controlled transactions, limits of debenture interests will be 75% - 125% of the key rate of the Central Bank (Art. 269(1.2) of the Tax Code of the Russian Federation).
SPECIAL TAX REGIMES
Removal of the restriction on applying the Simplified Tax System for companies having representative offices (Art. 346.12(3) of the Tax Code of the Russian Federation).
Elimination of the double taxation for payers on the Simplified Tax System and the Single Agricultural Tax issuing tax invoices to their customers. Now, in determining a taxation object, vendors will exclude from their revenues tax amounts charged to customers. Moreover, VAT amounts transferred to the budget will not be considered as expenses in calculating the Single Agricultural Tax and taxes to be paid, when the Simplified Tax System is applied (Art. 346.5, Art. 346.15, 346.16 of the Tax Code of the Russian Federation).
Currently the refinancing rate of the Bank of Russia is equal to the key rate of the Bank of Russia defined as of the relevant date (the Directive of the Central Bank of the Russian Federation No. 3894-U of 11 December 2015).
Please be reminded that in accordance with the Tax Code of the Russian Federation, the refinancing rate affects inter alia the following:
- an amount of the penalty fee charged on the tax debts,
- an amount of interest charged on the provided tax deferment/ installment, as well as on the investment tax credits,
- an amount of interest paid to the tax authorities for an untimely refund of excess tax amount paid (withheld), as well as interest charged for an untimely refund of VAT,
- calculation of the personal income tax in relation to interest received on bank deposits, as well as in relation to financial benefits received from saved interest for using borrowed (loan) funds.
The legislation on the compulsory social insurance
Starting with 01 January 2016 the limit of the tax base for accruals of insurance contributions for compulsory social insurance for temporary incapacity for work and in connection with maternity has been increased by 7.2% and currently amounts to 718 thousand rubles.
The limit of the tax base for accruals of insurance contributions for compulsory pension insurance paid to the Russian Pension Fund will be 796 thousand rubles.
The Currency legislation
Starting with 2016 foreign financial companies shall annually inform the Federal Tax Service of Russia on accounts (deposits) of Russian citizens and legal entities opened abroad and directly or indirectly controlled by Russian citizens.
Such information will be provided on each account opened by a client by 30 September of the year following the year, when the said accounts (deposits) were opened.
Natural persons, being currency residents of the Russian Federation, currently shall present annual reports on monetary flows in their accounts (deposits) in foreign banks before 01 June of the year following the reporting one. In accordance with the established procedure, the first report shall be presented for the year 2015, i.e. before 01 June 2016. The report shall be submitted electronically via a taxpayer personal account or in a hard copy personally, by a representative or by mail. For non-compliance with the regulations the legal and administrative liability has been established according with the Art. 12.25 of the Administrative Offences Code of the Russian Federation.
It shall be mentioned that currency residents of the Russian Federation are:
- citizens of the Russian Federation (apart from citizens who are permanently resident in a foreign state for not less than one year, including those holding residence permits in a foreign state, or those who for not less than one year temporally stay in a foreign state on the basis of a working visa or an educational visa);
- foreign citizens or persons without citizenship permanently residing in the Russian Federation on the basis of a residence permit
The Central Bank of the Russian Federation has established new regulations on identification of clients when they are exchanging currency in the amount exceeding 15 thousand rubles: alongside with the surname, first name and patronymic, and details of the ID document, banks shall require from their clients information on their dates of birth, citizenship, the residence (registration) address or the address of stay, and the Individual Taxpayer Number.
THE CIVIL LEGISLATION
In 2016 a number of new developments concerning activities of limited liability companies came into effect:
LLCs may operate both on the basis of the Charter approved by the founders, or the Model Charter approved by the authorized authority. Data on a name, a corporate seat and an amount of the authorized capital, on branches and representative offices of an LLC using the Model Charter will be reflected only in the Unified State Register of Legal Entities. It is worth mentioning that one kind of the Charter can be replaced with another one any time.
Registration of legal entities shall be carried out within three days.
A list of activities and transactions of members of commercial companies subject to notarization has been extended. So, the following documents shall be notarized:
a formal offer sent by a member of an LLC who intends to sell his/her share in the authorized capital to another person (Art. 21(5) of the Law No. 14-FZ);
a request of a member of the LLC on purchase of a share in the authorized capital owned by a member of the LLC who did not participate in voting on or voted against a decision concerning the approval of a major transaction or an increase of the authorized capital (Art. 23(2), Art. 17(3) of the Law No. 14-FZ);
an application of a member on his/her withdrawal from an LLC (Art. 26(1) of the Law No. 14-FZ).
a decision on an increase of the authorized capital of an LLC and a list of members being present when the said decision was made (Art. 17(3) of the Law No. 14-FZ).
In case of changing the address, documents confirming the right of use of the real estate or a part thereof shall be also enclosed to a corresponding application.
The registering authority is entitled to check validity of data being included or already included into the Unified State Register of Legal Entities in case of corresponding reasonable doubts. So, in case of doubts in validity of the data, the registering authority may suspend registration and conduct an examination of data lasting not more than one month.
THE LABOUR LEGISLATION
A prohibition has been established in relation to use of contracted work and outstaffing (Art. 56.1 of the Labor Code of the Russian Federation).
A scope of persons/entities allowed to carry out activities on providing workers’ (employees’) labor will be limited. According to the standard procedure currently such activities may be conducted only by the certified private employment agencies. Other organizations may provide personnel only if employees are assigned to persons/entities affiliated therewith (Art. 18.1 of the Law of the Russian Federation No. 1032-1 of 19.04.1991).
The Federal State Information System of recording results of carrying out special evaluation of labor conditions regulated by the Ministry of Labour of the Russian Federation has been established. The procedure of developing, storing and using data presented for evaluation, as well as a list thereof, has been determined.
The regulations, according to which an employee shall retain his/her average salary for the period of suspension of work in case of delays in salary payment for more than 15 days, have been introduced (Art, 142 of the Labor Code of the Russian Federation).
THE ADMINISTRATIVE LEGISLATION
Amounts of fines for not providing or untimely providing primary statistical data, as well as for presenting invalid data for companies has been increased. The amount of the fine will be 10 – 20 thousand rubles for officials, and 20 -70 thousand rubles for companies (Art. 13.19 of the Administrative Offences Code of the Russian Federation)
It shall be reminded that in accordance with the Order of the Federal State Statistics Service No. 320 of 15 June 2015 all commercial organizations, as well as non-commercial organizations manufacturing goods and rendering services to a third party (except for small business entities, budgetary organizations, banks, insurance and other financial and credit institutions) should have submitted the form No. 1 – enterprise “Main information on the company activities” based on the results of the year 2015 to the regional office of the Federal State Statistics Service by 01 April 2016. Legal entities with an equity interest held by foreign investors or fully owned by foreign investors (except for banks, insurance and other financial and credit institutions) being small business entities (except for micro-enterprises) shall additionally submit the form No. 1-VAS “Information on activities of the enterprise with the participation of foreign capital” by 24 March 2016.
Increased amounts of fines for carrying out business activity with major violations of licensing terms currently amount to 4 - 8 thousand rubles for individual entrepreneurs and 100 - 200 thousand rubles for companies.
The Legislation on the Notaries
Notaries are entitled to make free inquiries with the Unified State Register of Legal Entities and the Uniform State Register of Individual Entrepreneurs to receive a corresponding electronic document.
A new notarial fee for providing materials for state registration of companies and individuals entrepreneurs amounts to 1 thousand rubles.