22 March 2020

Tax & Legal 16 - 22 March 2020

President signs federal laws on VAT benefits, citizenship, Arctic investments and bill on constitutional amendments into law State Duma considers several bills Mikhail Mishustin: tax deferrals to be granted to sports and entertainment companies Lease freeze for small and medium businesses No penalties to be charged under certain federal contracts for defaults caused by COVID-2019 Russian State Duma to consider bill clarifying re- issue of patents to foreigners CBR key rate remains unchanged Russian transportation watchdog suspends audits of businesses and individual entrepreneurs Bill on regulatory sandboxes for digital innovations introduced to State Duma Restrictions on travel to Russia Government and Central Bank of Russia launch support measures to counter COVID-2019 impact Footwear labelling rules to be amended Bill on streamlining of appraisal activities signed LT Digest Ministry for Economic Development suggests using statutory reserve deposits to compensate Be in the know tourists PM orders suspension of field audits Legislative initiatives PM orders deferral of tax payments for tourism President signs federal laws on VAT benefits, and airline sectors, bankruptcy moratorium citizenship, Arctic investments and bill on Bill on online sales of OTC medicines passes constitutional amendments into law second reading • Federal Law No 62-FZ of 18 March 2020 on refining Central Bank of Russia to support individuals, the requirements for medical organisations to qualify economy, financial sector during coronavirus for zero CIT rate: the right to practice can now be pandemic confirmed by specialist accreditation certificates, too (the changes come into effect as of 1 January 2020); Ministry of Industry and Trade proposes subsidising costs to purchase freight rolling stock • Federal Law No 63-FZ of 18 March 2020 on reducing the response time for citizenship applications under Ministry of Finance clarifies administrative the simplified procedure (from six to three months); penalties for currency offences in view of COVID- 19 • Federal No 65-FZ of 18 March 2020 on benefits for investors implementing new projects in the Arctic. Ministry of Finance: calculation of withholding tax on foreign member’s income from increase of company’s capital with retained earnings State Duma considers several bills Special legal regime proposed for serviced • Bill No 871811-7, on liberalisation of criminal liability apartments for currency legislation breaches, passed the third Ministry of Finance develops bill on online sale of reading (for more details, see the LT Digest of 30 - 31 alcohol December 2019); Online sale to be permitted for prescription drugs • Bill No 871829-7, on liberalisation of administrative liability for currency legislation breaches, passed the Russian retailers suspend penalties for short second reading (for more details, see the LT Digest of supplies 30 - 31 December 2019); Pre-instalment of Russian software to consumer • Bill No 891666-7, on implementation of a traceability electronics to start on 1 July system for precious metals, gems, and items made of them, passed the first reading; • Bill No 913136-7 on maximum prices for medicines Business community asks to support restaurants not on the list of essential medicines and other and hotels medical products passed the third reading; Supreme Court restricts attendance of courts • Bills No 828237-7, 828243-7, and 828239-7 on due to COVID-2019 threat investment protection and investments passed the Arbitration Court of Murmansk Region: third reading; contributing property to capital may have • Bill No 891654-7 on extending the list of permitted unexpected VAT implications transactions via foreign bank account and currency Arbitration court of Perm Kray: absence of repatriation exemptions passed the first reading. formal interdependence does not prove that debt Official Internet site of the State Duma is not controlled Commercial Court of Saratov Region: application of beneficial income ownership concept Mikhail Mishustin: tax deferrals to be granted to sports and entertainment companies Customs duties on electric cars zeroed within EAEU The Prime Minister instructed the Russian Federal Tax Service to defer tax payments and social contributions European Commission presents response due by 1 May 2020 from sports and entertainment measures to counter economic impact of COVID- businesses (provide tax holidays). 19 Official website of the Russian Government Eurasian Economic Commission develops macroeconomic stability shield programme amid pandemic Lease freeze for small and medium businesses Due to the outbreak of COVID-2019, the Government will allow a freeze on payments in 2020 for small and medium businesses leasing public property. Official website of the Russian Government

No penalties to be charged under certain federal contracts for defaults caused by COVID-2019 Subject to the agreement of the parties, car manufacturers may be allowed to reschedule performance under certain contracts at no charge should such delay be caused in a bid to stop the import of the virus from abroad. Official website of the Russian Government

Russian State Duma to consider bill clarifying re- issue of patents to foreigners The bill enables the foreigners from visa-free countries working based on a patent to have their patents re- issued without having to re-enter Russia. Official website of the Russian State Duma

CBR key rate remains unchanged As reported by the CBR on 20 March 2020, its key rate will remain at six percent p.a. Official web site of the Central Bank of Russia

Russian transportation watchdog suspends audits of businesses and individual entrepreneurs During the period from 20 March to 1 May 2020, Rostransnadzor will suspend its field routine and extraordinary audits, as well as previously scheduled inspections, as part of the federal and municipal controls, except the extraordinary audits in case of emergencies and audits for licensing purposes. Official Rostransnadzor website

2 Bill on regulatory sandboxes for digital • banks will not downgrade credit ratings of borrowers innovations introduced to State Duma from the transport and travel sectors; An experimental legal regime (a regulatory sandbox) • the Government will provide guarantees to can be established to test digital innovations in: restructure/prolong loans. • medical technology; For small and medium enterprises (SME): • driverless transportation; • soft lending and loan guarantee programmes will be expanded; • digital and remote learning; • rental payment deferral for government and • financial markets; municipal assets; • remote sales of goods, works or services; • credit rating freeze; • construction; • beneficial loan restructuring terms. • government and municipal services; For trade: • industrial manufacturing. • short-term soft lending programmes; In a sandbox, some of the regulations or their separate • zeroing of customs tariffs and wider use of the ‘green provisions can be waived (including those related to corridor’ for socially important goods. licensing, certification, etc.). For other sectors: As the civil legislation regulating damage settlements may not be modified in a sandbox, mandatory civil • the Central Bank eased the requirements on banks liability insurance can be required. regarding lending to producers of pharmaceuticals and medical devices; A sandbox can be initiated by the stakeholders or regulators and needs to be approved by the • support to supplies under government procurement Government or the Central Bank of Russia (for the new contracts (penalties for contractual breaches will be financial technologies). With several exceptions, the waived); sandbox regime will be limited at three years; to join it, • penalties for currency breaches during non-resource an application will have to be filed. export activities will be waived; A register of regulatory sandboxes and requests to • a list of systemically important businesses will be initiate them will be available on a dedicated Internet established. site. For the population and regions: Based on the monitoring of such sandboxes, general legislation and regulations can be amended. • paid sick leaves will be available to those in quarantine; The Ministry of Economic Development is now collecting input on technologies that can be tested in regulatory • regions will receive financial support as required. sandboxes and on the regulatory barriers in their way. Official Internet site of the Bank of Russia Official Internet site of the State Duma

Footwear labelling rules to be amended Restrictions on travel to Russia For footwear produced or imported before 10 April Starting from 18 March and until 1 May 2020, to protect 2020, labelling codes will be provided free of charge. the public from COVID-2019, foreign citizens and stateless persons will be restricted from entering Federal Internet portal of draft legislation Russia.

Other measures effective from 18 March include: Bill on streamlining of appraisal activities signed • the Ministry of the Internal Affairs suspends The five-year limitation period for seeking reappraisal of receiving and processing requests for and issuing cadaster value has been lifted. The bill sets forth the entry documents and employment permits to requirements for education and experience of foreigners for employment purposes and corporate appraisers and establishes a procedure for entering permits to employ foreigners bankruptcy estate appraisal results to the Single Federal • the Ministry of Foreign Affairs suspends receiving, Register of Bankruptcy Information. processing, and issuing visas (with minor Official Internet site of legal information exceptions). Official Internet portal of legal information Ministry for Economic Development suggests using statutory reserve deposits to compensate Government and Central Bank of Russia launch tourists support measures to counter COVID-2019 impact The Ministry posted a bill to that effect at the federal For airlines and travel operators: portal of draft legislation. • tax payment deferral (this measure can be extended According to the bill, the Government may sanction (on to other industries); a country-per-country basis) compensating tourists for annulled tours to the ‘closed’ countries out of the travel • contributions to Association TourAssist (a reserve operators’ statutory reserve deposits. fund of the tourism industry) and to the statutory reserve deposits are cancelled for travel operators Federal Internet portal of draft legislation 3 until year end; PM orders suspension of field audits • credit and microfinance institutions must refrain from foreclosing on the pledged property of COVID-2019- Russian prime-minister Mikhail Mishustin issued the positive borrowers until 30 September 2020; following instructions: • insurance companies are to grant claims to infected • to suspend, until 1 May 2020, assignment of field tax policy-holders and refrain from charging default and customs audits, as well as federal- and penalties; municipal-level checks (except ad-hoc checks in critical cases); • starting from 1 May, transaction fees will not be charged for quick payments under RUB 100,000 per • by 20 March 2020, consider suspension of assigned month; fees for quick payments above RUB 100,000 audits and checks. per month will be capped at 0.5 percent of Official Internet site of the Government of the Russian transaction value, or RUB 1,500. Federation Measures to support lending to small and medium businesses: PM orders deferral of tax payments for tourism • expansion of refinancing plans (up to RUB 500 and airline sectors, bankruptcy moratorium billion): starting from 23 March, the Central Bank of Russia (CBR) establishes a four-percent interest Tax payment notices for taxes and social insurance rate; contributions will be sent after 1 May 2020 (unless in conflict with the final deadline for such notices); • for refinanced loans with a former limit of RUB 175 decisions to collect on tax and social insurance debts billion, the CBR’s interest rate will be reduced from will be taken after 1 May 2020 (unless in conflict with six to four percent, with the ultimate loan rate to be the final deadline for such notices). capped at 8.5 percent and all industry lending limits lifted. By 20 March 2020, a bill will be prepared to waive late payment penalties for such debts and on simplifying the Mortgage lending support measures: procedure for granting interest-free deferral of payment • decreasing the risk weight of mortgages and housing (these above measures are envisaged for the tourism co-investment loans; and airline sectors only). • changing the risk weighting rules for low- The prime-minister also instructed to develop, by 1 downpayment mortgages. April 2020, a bill setting a moratorium on initiating bankruptcy proceedings against debtors, and to Measures to support the financial sector: accelerate development of the bill on corporate debt • credit institutions and non-credit financial institutions restructuring. that apply the CBR’s accounting regulations should The Federal Tax Service was instructed to suspend, record their equity and debt securities at fair value until 1 May 2020, initiation of bankruptcy proceedings as of 1 March 2020 and debt securities purchased of tax debtors. from 1 March to 30 September - at fair value as at the acquisition date. The measures will apply until 1 Official Internet site of the Government of the Russian June 2021; Federation • terms for irrevocable letters of credit will be eased until 1 April 2021: respective fees will be decreased Bill on online sales of OTC medicines passes from 0.5 to 0.15 percent; second reading • prudential ratios can include transactions Pharmacies holding a pharmaceutical licence and a denominated in six currencies: U.S. dollars, euro, permit from Roszdravnadzor will be able to sell over- pounds sterling, Swiss francs, yens, and yuans; the-counter medicines online. • the zero countercyclical capital buffer will be The Government will issue a resolution approving the preserved; procedure for issuing the permit and setting forth the • private pension funds will not be required to align requirements for the online sale of medicines (including their retirement plan portfolios with the stress for the pharmacy and delivery mechanism). testing requirements by 1 January 2021; Online sales will not be permitted for prescription • inspections of credit organisations and non-credit medicines, narcotic and psychotropic substances, and financial organisations will be suspended (with the ethanol-based medicines with ethanol content by exception of cases requiring an urgent response), volume exceeding 25 percent. scheduled inspections will be rescheduled for the Official Internet site of the State Duma period after 1 July; • response time for regulatory violation notices and inquiries will be extended for a month; Central Bank of Russia to support individuals, economy, financial sector during coronavirus • the imposition of administrative penalties, primarily pandemic for overdue reporting, will be restricted. Measures to support individuals: Measures to alleviate the load on Russian joint-stock companies: • credit and microfinance institutions are to restructure debts and waive penalties to the confirmed • extending the deadlines for corporate procedures; coronavirus patients; 4 • excluding the 2020 performance from the Eligible recipients will include the organisations that asset/equity ratio consideration; acquired in 2020 shunting 1,200 litre locomotives or intermodal wagons with a loading length of under 19m • simplifying the stock exchange buyout procedures in that carry wheeled and tracked vehicles (which must 2020; also be produced in 2020). • postponing disclosure of annual and interim Eligible companies must meet one of several conditions: consolidated financial statements and other information by issuers; • lease out freight rolling stock; • the requirement to establish a supervisory board and • use freight rolling stock in their principal activities an internal audit function must be complied with by 1 other than resale (except natural monopolies). January 2021 (vs. 1 July 2020 currently). Organisations may seek compensation of 13.5 percent Official web site of the Central Bank of Russia of the purchasing price, but not more than RUB 400,000 for wagons and RUB 11,500 for locomotives. Official website of the Russian Ministry of Industry and Ministry of Industry and Trade proposes Trade subsidising costs to purchase freight rolling stock A draft resolution to that effect was posted at the Federal Draft Legislation Portal.

Regulatory clarifications

Ministry of Finance clarifies administrative According to the ministry, a foreign member will receive penalties for currency offences in view of COVID- income, if its interest in a limited liability company 19 appreciates, when such company’s capital is increased out of retained earnings of prior years. A default on a non-resident’s obligations to deliver or pay for goods or refund the advance payments under an Such income is treated as dividends and taxed in line import (export) contract with a resident due to a force with the relevant DTT, with all available benefits majeure, including the government’s anti-coronavirus applying. measures, can be used to attest the absence of the According to the letter, such dividends will be deemed resident’s guilt of committing an administrative violation paid on the date respective changes to the company’s prosecuted under Paragraphs 4 and 5, Article 15.25 of charter are registered with the tax authorities. the Russian Administrative Offences Code. Consultant Plus Residents are entitled to provide any evidence proving their guilt-free actions, including proof of all practicable measures being taken to comply with the Russian currency regulations. Rosprirodnadzor suspends scheduled checks Accountability of residents will be established on a case- Pursuant to Instruction No ММ-P36-1945 of 18 March by-case basis. 2020 of the Government, the Federal Service for Oversight in Natural Resource Usage suspends Official web site of the Russian Finance Ministry scheduled checks. Official Internet Site of Rosprirodnadzor Ministry of Finance: calculation of withholding tax on foreign member’s income from increase of company’s capital with retained earnings

Media Review

Special legal regime proposed for serviced Ministry of Finance develops bill on online sale of apartments alcohol Respective proposals put forward by the Federation The bill calls for a gradual authorisation of online sales. Council are to be considered by Deputy Prime Minister Russian PGI/PDO wines may be sold by producers and Marat Khusnullin, with the market regulation report for wholesalers until 1 January 2021 the sector to be finalised by 30 April 2020. Beer producers, whose equipment is on the government Serviced apartments are not currently considered register and whose production facilities have meters residential premises, which creates controversy: owners that automatically measure and record the volume of are not entitled to register at their place of residence, finished products, will be able to start selling online at and the authorities do not provide the relevant the second stage until 2023. infrastructure for what is effectively residential properties. The bill and the amendments have not yet been officially published. Interfax Economica i Zhisn online publication

5 Online sale to be permitted for prescription drugs However, the question of phased implementation remains open. The Government suggested that Bill No 285949-7 on online sale of medicines be returned to the second Vedomosti reading to permit online sale of prescription drugs. The bill passed the second reading on 18 March 2020. Business community asks to support restaurants Kommersant and hotels In a letter to the prime minister, industry and business associations requested government support for Russian retailers suspend penalties for short restaurants and hotels amid the difficulties caused by supplies COVID-2019. The Retail Companies Association bringing together the In the catering business, revenues have dropped by 30 country’s largest retail networks announced the to 90 percent; hotel occupancy has decreased more suspension of penalties for short supply of goods, citing than in half. a stronger demand for certain categories of goods and The following support measures are requested: the objective challenges faced by bona fide producers and suppliers. • to defer all tax payments for catering and hotel businesses for 120 days following lifting of COVID- Vedomosti 19-related restrictions; • to introduce a lease and utilities moratorium; Pre-instalment of Russian software to consumer • to refinance loans against government guarantees, electronics to start on 1 July providing loan repayment holidays until year-end; According to deputy head of the Russian Antimonopoly • to introduce regulatory checks moratorium for three Service (FAS) Anatoliy Golomolzin, software pre- years. instalment requirements will come into effect on 1 July 2020 and no postponement is envisaged. The signatories of the request believe these measures can help save businesses and jobs and help the Originally, pre-instalment of Russian software was to be industries recover fast once the pandemic is over. made mandatory in H2 2020 for smartphones only; now, FAS considers extending the scope of devices Vedomosti falling under the requirements.

Court Practice

Supreme Court restricts attendance of courts due • the affiliated company, being the founder of the to COVID-2019 threat taxpayer, transited the assets to the taxpayer, also making a capital contribution. On 18 March 2020, Presidium of the Supreme Court of and Council of Judges adopted a joint resolution on For VAT purposes, the transactions were recorded like COVID-2019-related restrictions. this: Personal visits to courts will be suspended, documents • the indirect member reinstated VAT on the residual will be accepted via Post of Russia or online. Only the value of the transferred assets urgent cases will be heard/writ proceedings held. • the affiliated company deducted this VAT amount Another recommendation to all courts is to use video- and later reinstated it when transferring assets to conferencing to consider cases. the taxpayer The measures will be in force from 19 March to 10 April • the taxpayer deducted the VAT amount. 2020. The tax authorities challenged the deductibility of VAT Official Internet site of the Supreme Court on the transferred assets. In their opinion, the founder had no right to deduct VAT or reinstate it, because the assets it received were Arbitration Court of Murmansk Region: intended for subsequent transfer to the taxpayer and contributing property to capital may have not for use in VATable activities. unexpected VAT implications A court of first instance supported the tax authorities. A series of transactions were conducted in a large Russian holding, making property contributions to The taxpayer’s (quite reasonable) argument that VAT capital; they were aimed at transferring assets to the recovery was funded at the level of the indirect member taxpayer from its indirect member. was rejected, as “the taxpayer’s right to deduct VAT cannot be related to the actions of a party not being its The following scheme was used: founder.” • an indirect member contributed assets to its affiliated Digital Justice: an arbitration cases database company’s capital;

6 Arbitration court of Perm Kray: absence of formal capitalisation ratio is calculated for each foreign interdependence does not prove that debt is not member. controlled Digital Justice: arbitration cases database A Russian company had loan obligations to several parties, interdependent with its Cypriot member, and a debt to a formally independent company. Commercial Court of Saratov Region: application of beneficial income ownership concept The tax authorities recognised all of the debt as controlled and disallowed the related interest expenses The court supported the opinion the Cypriot lender was (over RUB 3 bln). not the beneficial owner of interest income, the key argument being that, shortly upon receipt, interest Why was the debt to an independent entity recognised payments were transited to foreign entities in as controlled? jurisdictions Russia had no DTT with. • The company acquired a loan that was originally The dispute is especially newsworthy since the company received from a Russian entity and was secured on tried to apply the “look-through” approach, claiming a the group’s assets. 10-percent rate envisaged by the DTT with the Ukraine • The company was set up shortly before the loan was (since the individuals that are the group’s ultimate assigned. beneficiaries are Ukrainian residents). • The company’s operations were financed with a loan To support its entitlement to the benefit, the company from the taxpayer’s founder. produced the beneficiaries’ domestic and travel passports, as well as their Ukrainian registration and • The interest payments received by the company residence confirmations. were transited to the taxpayer’s founder. The court found the evidence insufficient, citing that: • The company's executive officers were also employed by the taxpayer. • the concepts of “beneficial owner of assets” and “beneficial owner of income” were not identical, the A court of the first instance supported the tax former referring to direct/indirect participation in a authorities. company, the latter – to the right to dispose of The taxpayer claimed that controlled debt should be income calculated separately per each lender. • the company failed to prove the that the income The court held that reached the beneficiaries • if a company has several loans from several parties • no waiver of income ownership by the lender and controlled by one and the same foreign member, the subsequent income recipients was produced. amount of controlled debt will be established Ultimately, the tax was charged at a 20-percent rate. cumulatively Electronic Justice: Commercial Cases File • if a taxpayer has several foreign members, the

International law

Customs duties on electric cars zeroed within measures to counter economic impact of COVID- EAEU 19 The Council of the Eurasian Economic Commission On March 13, the European Commission set out zeroed the customs duty on import of certain types of coordinated response to the economic implications of electric cars (under 8703 80 000 2 of the EAEU’s COVID-19 outbreak. Commodity Nomenclature for Foreign Economic The Commission will use all the instruments at its Activities). disposal to mitigate the consequences of the pandemic, The zero rate will be effective to 31 December 2021 and in particular: can be claimed by both individuals and legal entities, • to ensure the necessary supplies to our health importing electric cars. systems by preserving the integrity of the Single The decision will come into force 30 days after its Market and of production and distribution of value official publications. chains; This measure was already used before, introduced by • to support people so that income and jobs are not the Council’s Decision No 53 of 11 July 2016, and was affected disproportionally and to avoid permanent in effect from 15 September 2016 to 31 August 2017. effect of this crisis; The document has not been officially released yet. • to support firms and ensure that the liquidity of our financial sector can continue to support the Official Internet site of the Eurasian Economic economy; Commission • to allow Member States to act decisively in a coordinated way, through using the full flexibility of European Commission presents response our State Aid and Stability and Growth Pact Frameworks. 7 Member States can design ample support measures in of the EAEU domestic market and to stabilise financial line with existing EU rules. First, they can decide to take markets in order to prevent the disparity of exchange measures, such as wage subsidies, suspension of rates between the EAEU countries and reduce the payments of corporate and value added taxes or social emerging currency risks. contributions. In addition, Member States can grant Expediting customs processing of medical supplies that financial support directly to consumers, for example for are critical to control and suppress the spread of the cancelled services or tickets that are not reimbursed by coronavirus infection will also be key. The list of such the operators concerned. medical supplies is currently being finalised. Official Internet-site of the European Union The short-term measures include aiding national producers and export-oriented companies – for instance, reducing the import tariffs for certain goods Eurasian Economic Commission develops (spare parts, raw materials) – will help them to macroeconomic stability shield programme amid continue operations and compensate their current and pandemic future losses. The Eurasian Economic Commission joins efforts with The business community proposes considering the EAEU countries to ensure the macroeconomic additional measures to stabilise the EAEU markets: to continuity, minimise the impact on trade, and guarantee mitigate volatility of the national currencies by the flow of goods amid the COVID-2019 outbreak. switching to settlements in them. Another initiative is to The first-priority steps will include targeted customs reconsider the list of sensitive agricultural products regulation of certain categories of goods, monitored after the EAEU’s agricultural market has been reshaped. coordination of measures to prevent the disintegration Official Eurasian Economic Commission website

8 Deloitte publications

Changes are round the corner: the OECD releases Investors in the Arctic to enjoy tax benefits Pillars 1 and 2 update On 6 February 2020, Bills No. 895543-7 , No. 895545-7 On 31 January 2020, G20/the OECD released a , No. 895557-7 and No. 895550-7 were submitted to statementon the progress in addressing the tax the Russian State Duma, introducing benefits for challenges arising from the digitalisationof the investors into new Arctic projects. economy. The package of bills was prepared to ensure more The statement confirms the intent to finalisethe unified favorable conditions for private investors and create approach to profit allocation in the digital economy new jobs. (Pillar 1) by the end of 2020. The benefits are expected to be made available in Besides, a significant progress was noted in relation to summer 2020. the approach to the taxation of base erosion payments Read on to learn more in our LT in Focus of 17 February (Pillar 2). 2020. Read on to learn more in our LT in Focus of 19 February 2020. Tax reassessment under Article 54.1 of the Russian Tax Code: To be, or not to be? COVID 19 closes the borders. What to do if you The Russian Ministry of Finance has released are a foreigner in Russia? clarifications on the application of a tax reassessment Based on Resolution of the Russian Government No 635 mechanism under Article 54.1 of the Russian Tax Code. R of 16 March 2020, a number of restrictions are In its letter, signed by the Minister of Finance, the adopted to ensure state security, protection of public ministry quite categorically claimed that there was no health, and non proliferation of the new coronavirus basis for the assessment of tax arrears by calculation in infection in Russia: the event of an abuse by a taxpayer of its rights. entry of foreign citizens to the territory of Russia is A day after the official publication of the letter, a temporarily restricted (until 1 May 2020). Exceptions taxpayer friendly decision of the first instance court on are provided for foreigners permanently residing in the application of tax reassessment with respect to the Russia (holders of a permanent residence permit) movement of goods along the chain of fictitious on 18 March 2020, the Ministry of Internal Affairs and counterparties was reversed. its territorial subdivisions suspended accepting Learn more from our new Legislative Tracking in Focus applications and issuing invitations for study and work of 24 January 2020. visas, corporate permits for employment of foreigners, as well as work permits to all categories of foreign citizens. Labour legislation has been amended to change in particular, applications for extension/amendment of the application of SAWC results work permits and work visas of foreign employees are temporarily not accepted, raising concerns among the Amendments to Federal Law No. 426 FZ On Special business community regarding the employment of Assessment of Working Conditions dated 28 December foreign citizens in Russia. 2013 entered into force on 1 January 2020 as approved by Federal Law No. 451 FZ dated 27 December 2019. Read on to learn more in our LT in Focus of 23 March 2020 For details, please refer to Legislative Tracking in Focus of 22 January 2020.

Tax Monitoring: New Horizons of Digitalization OECD’s new proposals for taxation of The Russian Government has approved the concept of multinational enterprises tax monitoring development . For details, please refer to Legislative Tracking in Focus The major changes include a significant reduction of of 17 January 2020. thresholds for voluntary participation in tax monitoring and simplification of its procedures. The proposed measures will help to increase the Changes to currency control regulations: action number of tax monitoring participants to almost 8,000 required in 2024. For details, please refer to Legislative Tracking in Focus Learn more from our new Legislative Tracking in Focus of 9 January 2020. of 3 March 2020.

***** We hope that you will find this edition interesting and informative. Should you have any questions on this subject, please do not hesitate to contact us. Best regards, Deloitte CIS Partners 9 Contacts

Tax & Legal

Svetlana Meyer Gennady Kamyshnikov Managing Partner Partner Tax&Legal, Deloitte CIS Private & Corporate Tax [email protected] [email protected]

Oleg Berezin Oxana Zhupina Partner Partner, Pharmaceuticals Consumer Products [email protected] [email protected]

Yulia Orlova Vladimir Elizarov Partner Partner Metals and Processing Technology, Media, Entertainment & [email protected] Telecommunications [email protected]

Artem Vasyutin Yulia Krylova Partner Director Retail, Wholesale and Distribution Real Estate Tourism and Hospitality [email protected] [email protected]

Tatiana Kofanova Yuliya Menshikova Partner Director Automotive Oil & Gas, Energy & Resources, Mining [email protected] [email protected]

Anna Kostyra Anton Zykov Managing Partner Partner Deloitte Legal Tax Dispute Resolution [email protected] [email protected]

Yuliya Bolshakova Dmitry Pozharniy Senior Consultant Director Art & Finance Aviation & Transportation [email protected] [email protected]

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