Dear colleagues and partners! News: we present the new overview of changes in the legislation of the Russian Federation…
The period of administrative moratorium liability for failure to comply with the currency legislation is extended
The administrative liability moratorium for failure to comply with the currency legislation was extended until December 31, 2023 under the Federal Law № 518-FZ of December 19th, 2022 “On Amending Certain Legislative Acts of the Russian Federation”.
It is a well known fact that sanctions were imposed against Russian companies by a number of foreign countries, prohibiting the export of both goods and services to the Russian Federation as well as the money transfer to Russian companies.
This led to numerous breaches of foreign trade contracts – goods supplied by Russian companies were not paid, pre-paid goods were not delivered and transferred deposits were not refunded.
Legislation of the Russian Federation (Article 15.25 of the Code of Administrative Offenses of the Russian Federation) provides a rather strict penalty for violation of the obligation to repatriate currency (receipt of counter performance for exported goods or transferred deposit) – a fine of 5 to 30% of the amount of currency not received under the foreign trade contract.
Thus, Russian companies found themselves between the hammer and the anvil – they could not receive payment for the exported goods, receive the pre-paid goods, return the deposits, for which they were held liable and had to pay fines of up to 30% of the value of the goods (the amount of the pre-paid deposits).
Therefore, within the fight against sanctions, Federal Law № 235 of July 13th, 2022 amended article 15.25 of the CAO RF with the addition of note 10, which excludes administrative liability for violations of currency legislation in the period from 23.02.2022 to 31.12.2022, if the violation was caused by the introduction of restrictive measures by foreign countries.
Since the external economic situation did not stabilize during the original note period, it was extended until 31.12.2023, which is not only a positive change, but also important and necessity.
Permission for Russian residents to issue loans in foreign currency to foreign companies extended
Minutes № 120/1 of December 27th 2022 of the meeting of the sub-commission of the Government Commission on Control over Foreign Investment in the Russian Federation extended the period of permission for Russian residents to issue loans in foreign currency to non-residents, except for persons related to unfriendly countries.
In order to prevent the withdrawal of capital from the economy, due the start of a special military operation and the imposition of economic sanctions on the Russian Federation, on 28 February 2022 the Russian President issued Decree № 79, which prohibited foreign exchange transactions involving the provision of foreign currency by residents in favor of non-residents under loan agreements.
For Russian citizens and companies, this has led to an inability to finance related parties, which has significantly complicated the operations of a number of large Russian corporations.
Only after more than 6 months the counter-sanctions were loosened: in the Protocol of November 18th, 2022 № 06-06-10/VN-59822 of the Sub-Commission of the Government Commission for Control over Foreign Investment in the Russian Federation residents were allowed until December 31st, 2022 to issue loans in foreign currency to non-residents on condition that non-residents were not related to unfriendly countries.
Protocol № 120/1 of the Government Commission for the Control of Foreign Investment in the Russian Federation of December 27th, 2022 extended the term until March 31st, 2023.
The extension of the permission period for foreign currency loans to non-residents indicates an improvement in the economic situation in the Russian Federation, which provides an opportunity for Russian corporations with related companies in foreign countries to gradually reestablish operations.
The procedure for calculating mineral extraction tax for the extraction of non-metallic building materials is established
On December 22nd, 2022, the Federal Tax Service, guided by the letter of the Ministry of Finance of December 20, 2022 № 03-06-05-01/124943, issued a Letter № SD-4-3/17393@ “On the tax on mineral extraction” which established the procedure for calculating the mineral extraction tax for tax periods up to September 01, 2022.
After a radical change in judicial practice on the issue of MET and the recognition of rubble as a separate mineral rather than a processed product, the tax authorities began a massive audit of the entire industry and additional assessments of taxes, penalties and fines.
However, the tax authorities did not have a common approach to calculating the amount of MET to be paid in case rubble was recognized as an object of taxation.
In an attempt to increase the budget, the tax authorities often took into account the total amount of products sold to customers (rubble, remains, aggregate sand and gravel mix), but only at the price of expensive rubble fractions, thus imposing unreasonable tax burden and penalties on taxpayers.
It seems evident that the reason for this situation was a retrospective change in the approach to determining the object of MET taxation in the absence of a change in legislative regulation.
Only two years after the change in practice, the Federal Tax Service decided on a methodology for calculating the unit value of mined minerals for the “rubble” taxation object, stating that in determining the unit value of mined minerals, both proceeds from sales of rubble and proceeds from sales of other production by-products (aggregate sand and gravel mix, remains, other products) should be taken into account.
On the one hand, the publication of this letter is an important positive change for taxpayers, as it eliminated the legal uncertainty resulting from the retrospective change in the approach to calculating MET.
On the other hand, one cannot but emphasize the impropriety of the tax authority in changing the approach in the absence of changes in the legislative regulation, as well as the considerable delay in issuing the mentioned letter.
The publication of this letter 2 years ago would have prevented taxpayers from being charged with unreasonable tax obligations and sanctions as a result of the actions of the tax authorities in circumstances of legal uncertainty.