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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
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