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Download the PDF Automotive News. July 2019 July 2019 года New localisation rules Car manufacturers will be scored to get government support Boosting automotive Page 5 demand The extension of preferential car loan and leasing programmes Page 6 Tire labelling The pilot is now running Page 16 Recycling fee A new chapter in the Russian Tax Code? Page 13 Table of contents 1 Government support initiatives 3 2 Environmental law 12 SPIC 2.0 package passes first reading 4 Release of a bill adding certain non-tax payments to the Russian Tax Code 13 Government support initiatives New localisation rules for car manufacturers 5 3 The EAEU Code and customs issues 14 The Russian Government amends automotive Environmental law industry strategy until 2025 6 Updated rules for authorised economic operator (AEO) 15 The Russian Government amends automotive The EAEU Code and customs industry strategy until 2025 6 Track & trace and electronic document issues management 16 The Ministry of Industry and Trade clamps down 4 Other federal legislation news 17 on export support measures 6 Other federal legislation news Federal Tax Service: further clarifications of VAT Government support of car manufacturing 7 treatment of electronic services starting from 1 January 2019 18 Court precedents Prime Minister Dmitry Medvedev signs off amendments to Government Resolution No. 667 5 Court precedents 19 developed by the Ministry of Industry and Trade 9 Deloitte’s periodicals Government approves rules for reimbursement of 6 Deloitte’s periodicals 24 import duties 9 Contacts The Ministry of Industry and Trade approved 7 Contacts 25 a number of SPIC requests and signed several SPICs with car manufacturers 10 Regional development. Kaliningrad Region may host motor parts production cluster 11 © 2019 Deloitte Consulting LLC Automotive News 2 July 2019 Government support initiatives Government support initiatives Environmental law The EAEU Code and customs issues Other federal legislation news Court precedents Deloitte’s periodicals Contacts © 2019 Deloitte Consulting LLC Automotive News 3 July 2019 Government support initiatives SPIC 2.0 package passes first reading • securing unchanged business conditions for project- Government support initiatives The bills propose: running organisations, only if it is provided for by the applicable regulations that govern the relevant • supplementing Federal Law No. 488-FZ of 31 December relations as at the time of SPIC execution 2014 “On Russian Industrial Policy” with a separate Environmental law chapter regulating the scope, parties, content of SPICs • the commencement of grandfathering provisions was and the procedures for executing, amending and formalised: so these provisions will only start having an terminating them, as well as liability for non-compliance effect on profit tax after the hard launch of manufacturing The EAEU Code and customs • setting forth that SPICs are signed to develop and/or or construction projects envisioned by SPIC issues implement state-of-the-art technologies with the ultimate • enabling communication between the authorities and other objective of fostering domestic production of globally SPIC participants via special information systems, competitive industrial or other unique products (with the including to control the performance of SPIC obligations Other federal legislation news qualifying technologies to be approved by the • setting the procedure for regulating the liabilities of the Government) parties. Court precedents • providing for a competitive selection process for federal SPICs effective at the time of the laws enter into force will SPIC participants through open and closed tenders remain valid. • the bills do not contain the previously discussed division of SPICs can be signed until 31 December 2030. SPICs into federal and regional, but requires the Deloitte’s periodicals simultaneous participation of all levels of government Furthermore, Bill No. 689130-7 changing the tax treatment of (federal, regional and municipal) as party to the of SPIC SPIC parties is pending consideration by the State Duma. • extending the maximum SPIC term to up to 15 years for The bill provides for the following changes: Contacts projects worth RUB 1 billion to RUB 50 billion and up to • members of consolidated taxpayer groups, residents of 20 years for projects worth more than RUB 50 billion. special economic zones, advanced development territories, • a SPIC must set forth a list of investor support measures, regional investment projects and users of special economic which will cease once the total spending of budgets at all regimes will not qualify as SPICs taxpayers levels exceeds 50% of capital investment • SPIC taxpayer status will be assumed as of inclusion of • cancelling the 2025 deadline for granting tax benefits to a particular SPIC in the federal register SPICS © 2019 Deloitte Consulting LLC Automotive News 4 July 2019 Government support initiatives • the tax treatment of SPIC participants will be regulated by New localisation rules for car manufacturers Government support initiatives special provisions (SPICs are now treated as equal to Russian Government Resolution No. 661 of 25 May 2019 RIPs) introduced changes to the rules effected by the previous • taxpayers will be able to choose from two options of Resolution No. 719 of 17 July 2015. Points will be awarded Environmental law applying federal income tax benefits (the chosen option for each localised operation (e.g. 400 points for body welding options must be formalised in the taxpayer’s accounting or 200 points for each 0.5 percent of revenue spent on R&D). policy and remain subject to no changes): Points for completed localization operations will be added to The EAEU Code and customs o to the entire tax base, provided that the revenues points for investor commitments made in the SPIC and for issues from the SPIC’s products account for at least engaging entities to perform certain operations. 90 percent of the total Eligible subsidy recipients will have to meet the following o to separately recorded SPIC’s profits criteria: Other federal legislation news • beneficial profit tax rates will apply starting from the tax • for competitiveness improvement programmes: period when a company became a party to a SPIC and from 1 January 2019, the production of at least 70 percent Court precedents until it loses this status or the total tax and non-tax SPIC of each auto product must include operations that score at expenditures of all budgets have exceeded 50 percent of least 900 points, from 1 January 2022 – 1,200 points, and total capital investment. The benefits will not apply in from 1 January 2025 – 1,400 points Deloitte’s periodicals the periods when the company fails to deliver on its SPIC • for public procurement: in 2019−2020, the manufacture commitments) of each auto product must include operations that score at • the document also sets forth the tax payment rules for least 2,000 points for passenger vehicles, LCVs and Contacts a SPIC that has been terminated by a court decision due trucks, and 1,700 points for buses, with a further to a material breach of contractual obligations by a party. increases planned Official website of the Russian State Du • for SPICs signed after 1 July 2019, the manufacture of least 90 percent of wheeled vehicles in any calendar year within the SPIC’s term must score at least 7,000 points • for other areas, the required number points will be set by specific regulations. Official website of the Russian Government © 2019 Deloitte Consulting LLC Automotive News 5 July 2019 Government support initiatives The Russian Government amends automotive industry The Ministry of Industry and Trade clamps down on Government support initiatives strategy until 2025 export support measures: companies will now have to The strategy was updated with a list of new high-tech sign long-term export growth commitments to qualify products, such as hybrid, electric, connected and unmanned for low-interest loans and transportation cost Environmental law cars, whose localisation will be critical in the medium term. compensation. The Ministry of Industry and Trade plans to cut government support for auto Official Internet Portal for Legal Information manufacturers The EAEU Code and customs The Ministry of Industry and Trade is proposing to issues Government allocates funds to boost automotive simultaneously tighten, and balance transportation cost demand compensation rules across industries. The subsidies will now Prime Minister Dmitry Medvedev held a meeting with Industry be a part of the “International Cooperation and Export” Other federal legislation news and Trade Minister, Denis Manturov, to discuss the extension project and, starting from 2020, offer preferences to the of preferential car loan and leasing programmes. companies running corporate competitiveness programmes with long-term export growth commitments. Corporate They decided to allocate an extra RUB 10 bln for special- Court precedents competitiveness programmes are also a prerequisite for purpose programmes to boost demand for vehicles obtaining low-interest loans. Companies with short-term (from first-time and family buyers, small businesses, etc.) export commitments will be able to apply for subsidies from and extend the programme from 1 July 2019. whatever funds remain. Deloitte’s periodicals According to the new rules, 48 percent of subsidies will be allocated to engineering and 45 percent to manufacturing Contacts industries. Annual subsidies to a single company will be capped at 1/16 of the programme’s budget,
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