28.07.2022 Александр Сологуб

News digest (July 28)

Dear colleagues and partners! News: we present the new overview of changes in the legislation of the Russian Federation…

Key rate

The Bank of Russia has reduced the key rate to 8% per annum since July 25, 2022.

The Press Release of the Bank of Russia dated July 22, 2022.

Reduction in value of the key rate can be considered as a positive change, which not only affects interest on loans, but also decreases the amount of interest accrued on the basis of the key rate indicator (refinancing rate) for late payment of taxes (fees) or interest on monetary obligations.

Advance payments under contracts with non-residents

The Bank of Russia has abolished the limit on advance payments in favor of non-residents under contracts for services, works, results of intellectual activity. Previously, this limit was 30%.

The Resolution of the Board of Directors of the Bank of Russia dated July 19, 2022.

We consider the measure of the Bank of Russia to be positive, returning the parties to foreign economic contracts to their initial position. The measure is also aimed at resuming or building new economic relations with foreign counterparties.

Settlements with copyright holders

On May 27, 2022, the Presidential Decree № 322 established the temporary procedure for fulfilling liabilities to certain copyright holders. The procedure consists in necessarily opening the special “O” type account in the foreign unfriendly copyright holder’s name, and transferring funds to it for the use of the intellectual activity results and means of individualization on the territory of the Russian Federation.

On July 19, 2022, the Ministry of Economic Development of Russia prepared the letter explaining the requirements of the Presidential Decree:

  • The Decree is applicable not only to foreign unfriendly copyright holders, but also to Russian copyright holders who publicly support the sanctions of foreign states, prohibit the use of their intellectual activity results and means of individualization on the territory of the Russian Federation after February 23, 2022 and others performing similar actions;
  • the special “O” type account should be opened by the debtor for the purposes of the copyright holder;
  • transfer of funds from this “O” type account to the copyright holder’s account must be approved by the Government Commission for the Foreign Investments Control.

The Letter of the Ministry of Economic Development of Russia dated July 19, 2022 № 26614-КМ/Д01и.

The measure makes it possible to control transfers to foreign copyright holders, monitor the use of their intellectual activity results and means of individualization on the territory of the Russian Federation. We believe that the measure will complicate the use of intellectual property on the territory of the Russian Federation.

Services in electronic form

Amendments have been made to Article 174.2 of the Tax Code of the Russian Federation: Russian legal entities and individual entrepreneurs – recipients of services – are again recognized as tax agents, when providing services in electronic form on the territory of the Russian Federation.

The Federal Law № 323-FZ dated 14.07.2022 “On Amendments to Part Two of the Tax Code of the Russian Federation” (Clause 12 of Article 1).

We believe that introducing amendments to Article 174.2 of the Tax Code of the Russian Federation is inevitable, since companies providing services in electronic form faced impossibility of paying VAT on the territory of the Russian Federation because of blocking such transfers by banks.

Bank fees

Amendments have been made to Article 29 of the Federal Law “On Banks and Banking Activities”, namely: it has been established that for legal entities’ deposits in foreign currency, simultaneously with accrual of interest, it is possible to charge commission to be debited from the client’s account. The amount of the commission may exceed the amount of interest accrued under the bank deposit agreement.

The Federal Law № 292-FZ of 14.07.2022 “On Amendments to Certain Legislative Acts of the Russian Federation, Invalidation of Clause 6 of Part One of Article 7 of the Law of the Russian Federation “On State Secrets”, Suspension of Certain Provisions of Legislative Acts of the Russian Federation, and on Establishment of Peculiar Features for Regulating Corporate Relations in 2022 and 2023” (Article 1).

For companies, the measure is not positive, since they may not actually receive income in the form of interest from storing their funds in credit institutions. It is also not clear whether banks will unilaterally collect fees, or whether this concerns some separate agreement between the bank and the client. The Central Bank adheres to the position that the credit institution’s actions must be agreed with the client (the Letter of the Bank of Russia dated 14.06.2022 № ИН-03-59/82).

Corporate changes

Amendments have been made to the legislation on joint-stock companies. The following provisions have been suspended until December 31, 2022:

  1. The Annual General Meeting of Shareholders is held not earlier than two months and not later than six months after the end of the reporting year.
  2. The minutes of the General Meeting of Shareholders shall be drawn up within three working days after closing of the General Meeting of Shareholders, in two copies (the same for the minutes of the meeting of the Board of Directors).
  3. The meeting of the Board of Directors of the company is competent (has the quorum) if at least half of the number of elected members of the Board of Directors (Supervisory Board) of the company participate in it.

The Federal Law № 292-FZ of 14.07.2022 “On Amendments to Certain Legislative Acts of the Russian Federation, Invalidation of Clause 6 of Part One of Article 7 of the Law of the Russian Federation “On State Secrets”, Suspension of Certain Provisions of Legislative Acts of the Russian Federation, and on Establishment of Peculiar Features for Regulating Corporate Relations in 2022 and 2023” (Article 6).

The measure is positive, allowing companies to remain operational during the period of business division, sales of shares in companies, and transfer of management to new persons.

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