RAEC asked for tax breaks for VKontakte and Yandex

RAEC asked for tax breaks for VKontakte and Yandex. IT Market

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Anna Savelieva | 10/14/2020

RAEC asked for tax breaks for VKontakte and Yandex

Business believes that the extension of the tax maneuver to the companies of the “digital circuit” will help not to lose to foreign competitors and retain valuable personnel.

As RBC reports with reference to the final resolution of the Russian Internet Forum 2020, RAEC
(Russian Association for Electronic Communications) proposes to extend the tax maneuver to IT companies providing
digital services regardless of their size. These include search services, social networks, online cinemas, online stores, etc. – that is, those who do not fit the criterion “90% of
accounts for the development and sale of software. ”

Also, developers of cash and banking software, electronic document management systems, CRM and those who develop software, but earn more on other services, cannot receive support. Under
this description fits such well-known companies as Yandex.Taxi, BlaBlaCar, Avito, Citymobil, SkyEng, Kontur, Shtrikh-M, Evotor and Diadoc.

At the same time, the association proposed to postpone the introduction of product labeling and other new digital systems, as well as the mandatory pre-installation of domestic software, until January 1, 2022; admit
software developed jointly with foreign shareholders on the territory of the Russian Federation, Russian; extend the zero VAT rate to software for mobile devices and establish a single VAT rate for electronic
services up to 10%.

Thus, according to the RAEC, it will be possible to avoid the reduction of this market segment and the departure of players, which will subsequently be difficult to replace due to the “weak readiness of investors to invest.”
In other words, the measures will help prevent foreign companies from taking over the market and transferring personnel to them.

taxation of Russian IT companies

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