Russia To Defer All Business Taxes Except VAT For SME’s Until October
As part of the economic boost to support Russian businesses during the Covid-19 pandemic, President Putin announced yesterday that the Government will provide tax deferrals for all taxes for small and medium-sized businesses, with the exception of VAT, for the next 6 months. In addition to such deferrals, a deferment on insurance contributions to social funds should be given to micro-enterprises.
He also stated that Russian banks would also provide loan deferments to Russian SME’s.
Definition of a small enterprise in Russia
- Under the Federal Law of 14 June, 1995 “On Governmental Support of Small Entrepreneurship in the Russian Federation” the small business sector includes:
- small enterprises registered as legal entities (SEs) that meet the following two requirements:
- the state property of the Russian Federation or its subjects, the municipal property, and the property of non-governmental or religious organizations, charities or other foundations may not exceed 25% of the charter capital. The share belonging to one or several legal entities that are not small entrepreneurship entities may not exceed 25% either;
- the average number of employees does not exceed:
- 100 in industrial production, civil engineering or transport;
- 60 in agriculture, science or engineering;
- 30 in retail trade or consumer services;
- 50 in other sectors or types of business.
- individual entrepreneurs (IEs);
- farm enterprises (FEs);
President Putin stated that small and medium-sized enterprises now face objective difficulties – decline in orders and in revenue. He noted that such companies need help to continue their activities, and therefore to keep their employees. The measures listed above are expected to provide some relief from the market situation caused by the Covid-19 outbreak.
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