Tax incentives for the IT industry will be expanded: the Russian government approved amendments to the Tax Code

The government approved amendments to the Tax Code, expanding the range of recipients of benefits for IT companies, said Russian Prime Minister Mikhail Mishustin.

“According to the current legislation, benefits are available to organizations that receive 90% of their income from IT. The amendments propose to reduce this threshold to 70%, as well as abolish the requirements for the minimum number of employees and expand the list of areas in which businesses must be engaged in order to benefit from government support. Many companies are waiting for such a decision,” Mishustin said during a government meeting on Wednesday.

The amendments involve the elimination of the criterion for the number of employees of organizations to receive benefits (now there must be at least seven people) so that small businesses can qualify for support measures.

Companies providing services for the development, implementation and support of any Russian software (integrator companies), selling online advertising on their platforms and placing ads on classifieds (Avito, Avto.ru and others), providing paid access to content , including by subscription, providing educational services using online platforms, as well as companies that develop and sell Russian software and hardware systems. In addition, vendors who provide Saas solutions through closed networks, and not just through the Internet, will also be able to apply for benefits.

Eligible accredited companies will be able to benefit from a zero income tax rate until 2025 (3% after 2025), the insurance premium rate will be 7.6% instead of 14%.

At the same time, as reported by the Ministry of Digital Development, if a company does not meet the conditions for the first two quarters of this year, but quickly structures its activities, it will be able to take advantage of benefits for paying social contributions starting from the third quarter. Companies that immediately meet the new criteria, after the adoption of the law, will be able to apply the income tax and insurance premium benefits retroactively from January 1, 2022, that is, taxes and contributions paid for the first two quarters will be recalculated.

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