Important business innovations in Russian legislation for may 2021

The draft of the Federal law «On amendments to part two of the Tax code of the Russian Federation and certain legislative acts of the Russian Federation» (hereinafter referred to as the Draft law) provides in particular:

1. Changes concerning the calculation and payment of value added tax.

The Draft law provides for establishing obligations for taxpayers to withhold and pay value-added tax from their suppliers of goods (works, services) – foreign organizations that are not registered with the tax authorities as taxpayers, taxpayers – foreign persons who are registered with the tax authorities at the location of their separate divisions, provided that these divisions do not participate in these operations, taxpayers – foreign persons who are registered with the tax authorities in connection with the presence on the territory of the Russian Federation of their real estate, vehicles, and bank accounts.

2. Changes concerning the calculation and payment of excise taxes.

The Draft law provides for: indexation of excise tax rates for 2024, taking into account the projected inflation rate of 4 percent; clarification of the conditions for the possibility of applying the right to «reverse» excise tax on ethane and liquefied petroleum gases from 01 january 2022; clarification of the procedure for applying the tax deduction for excise taxes on grapes.

3. Changes concerning the calculation and payment of personal income tax.

The Draft law provides for: the abolition of the obligations of taxpayers in the submission of tax return Form 3 of personal income tax in the case of the sale of property that was owned less than the minimum term of ownership, provided that the amount of tax deductions for the sale of property (250 000 rubles or 1 000 000 rubles) exceeds the corresponding income; clarification of the procedure for the transfer of information by banks to the tax authorities on the amounts of interest paid to individuals on deposits (account balances) in banks located on the territory of the Russian Federation.

4. Changes concerning the taxation of foreign organizations.

The Draft law provides for adding the list of taxable income paid by a foreign organization and not related to its business activities in the Russian Federation through a permanent establishment with interest income from debt obligations of individual entrepreneurs and debt obligations of foreign organizations operating in the Russian Federation through a permanent establishment, similar to the current norms for interest income paid on debt obligations of russian organizations, in order to regulate the procedure for taxation of income of foreign organizations from sources in the Russian Federation.

5. Changes concerning the simplified taxation system.

In connection with the abolition of the single imputed income tax there are made appropriate adjustments.

The draft of the Federal law «On amendments to the federal law «On insolvency (bankruptcy)» and certain legislative acts of the Russian Federation» (hereinafter referred to as the Draft bankruptcy law) was submitted to the State Duma of the Russian Federation.

The Draft bankruptcy law is aimed at a comprehensive reform of the institution of insolvency (bankruptcy), including the expansion of the practice of using rehabilitation mechanisms in relation to legal entities, and provides for the introduction of a new variable rehabilitation procedure – debt restructuring. It is proposed to abandon such bankruptcy procedures as supervision, financial recovery and external management, limiting the use of one rehabilitation and one liquidation bankruptcy procedure.

The authors of the Draft bankruptcy law believe that the Russian legislation provides for insufficiently effective mechanisms of rehabilitation procedures, which are rarely used in practice and rarely end with the restoration of the solvency of debtors. This leads to the fact that most bankruptcy cases are initiated at the request of creditors and when all other measures for debt collection have been exhausted and the debtor’s property has been sold in the course of enforcement proceedings. Debtors do not consider bankruptcy procedures as a way to solve their financial problems.

In order to resolve the current negative situation and taking into account international practice, the Draft bankruptcy law proposes to create a new rehabilitation procedure aimed at restoring the debtor’s solvency and preserving the business, as well as to reduce the terms of bankruptcy proceedings, including by promptly terminating obviously unprofitable activities.

In order to create additional incentives for debtors to use rehabilitation mechanisms, the Draft bankruptcy law provides for the possibility for a debtor or creditor to submit to the arbitration court not only an application for declaring the debtor bankrupt, as provided for by the current Federal Law «On insolvency (bankruptcy)», but also an application for the introduction of a debt restructuring procedure.

In addition, the Draft bankruptcy law proposes to change the procedure for selecting self-regulating organizations of arbitration managers and (or) arbitration managers for conducting procedures used in bankruptcy cases, and the requirements imposed on them, taking into account the division of debtors and self-regulating organizations into groups; the procedure for calculating and paying remuneration to arbitration managers is improved; the order of satisfaction of creditors claims is regulated, taking into account their priority, and the possibility of subordination of the claims of individual creditors (controlling the debtor and its affiliated entities) and the provision of collateral for individual obligations of the debtor is determined.

Part of the provisions of the Draft bankruptcy law is devoted to the possibility of checking the existence of criteria for deliberate and fictitious bankruptcy in relation to strategic enterprises and organizations with state participation, as well as debtors who, at the time of initiating a bankruptcy case, are in arrears on mandatory payments of more than 100 million rubles.