On March 25, the Russian President addressed the nation to outline the situation regarding the coronavirus global pandemic. In addition to the Federally mandated week – long closure of non-essential business, some relief was also provided to small and medium sized companies that would be affected.
Included in the measures to help small and medium sized business:
- A deferment for the next 6 months of all taxes, except VAT.
- A deferment for the next 6 months of Social Insurance for microenterprises.
- A reduction of the Social Insurance rate from 30% to 15%.
Companies may qualify as a small or medium sized business if:
- The average number of employees in 2019 did not exceed 250 and
- At least one of the following conditions is met:
- Company participants - foreign legal entities own 49% or less of the share capital (or voting shares for Joint-Stock companies).
- Company participants - foreign legal entities own up to 100% of the share capital (or voting shares for Joint – Stock companies), if their total business income is less than 2 billion rubles and the average number of employees is less than 250.
- The company's core activity involves software production, the ownership of which remains with the company.
- The company received the status of a project participant in accordance with the Federal Law "On the Skolkovo Innovation Center".
Subject to the above criteria for the previous year, the Russian company is automatically entered by the Federal Tax Service in the register of SMEs based on available data from the tax authority by July 1. Status data appears in the registry on August 10.
If the participants of the company - foreign legal entities own up to 100% of the share capital (or voting shares for the joint-stock company), then the audit organizations are authorized to submit data to the Federal Tax Service for entering information on such LLCs into the register of SMEs only from July 1 to July 5 of the following year .
Please know that those companies that do not qualify as small or medium sized may nevertheless rely on a deferment or partial deferment for tax payments as well as Social Insurance contributions for up to 1 year, and for the federal portion of taxes for up to 3 years if at least one of the following criteria is met:
- The company suffered financial harm as a result of force majeure circumstances caused by the epidemic and subsequent prohibitions by the authorities (such as border closures, quarantines and traffic restrictions)
- The threat of bankruptcy to the company as a result of full tax payment
Experts at Emerging Markets Group remain ready to analyze the situation in your company and propose effective measures to protect your business.
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Partner. Chief Operating Officer