Tax Secrecy Disclosure in Return for Tax Benefits — Updated Accreditation Requirements for Russian IT Companies
Russian IT companies that hold state accreditation and currently enjoy tax benefits, such as a 0% corporate income tax rate and reduced insurance contribution rates, should be aware of recent changes in the accreditation conditions. Many of these companies have failed to disclose their tax secrecy, a precondition for accreditation, as alerted by the Ministry of Digital Development, Communications, and Mass Media.
Effective from October 1, 2022, a new Regulation on the State Accreditation of Russian Organizations Operating in the Area of Information Technologies has been implemented. This was approved by Resolution No. 1729 of the Russian Government on September 30, 2022, and subsequently amended on February 22, 2023.
Among other conditions, the accreditation requirements stipulate that an organization must disclose its tax secrecy to the Russian tax authorities for the previous and current years, as well as for at least two calendar years following the submission of their state accreditation application. This disclosure is made by providing written consent in the prescribed form to the Russian tax authorities. This obligation also extends to organizations that were accredited prior to October 1, 2022.
An organization failing to provide this consent will not be accredited (as per subpara. (a) of section 17 of the Regulations). Moreover, if an already accredited organization has not provided consent to disclose its tax secrets — which may be revealed during a scheduled or unscheduled audit by the Russian Ministry of Digital Development, Communications, and Mass Media (The Ministry of Digital Development) — its state accreditation will be rescinded (as outlined in subpara. (c) and the final paragraph of section 22 of the Regulations).
The Russian Federal Tax Service annually informs the Ministry of Digital Development about the received consents, doing so before May 20. As of early May 2023, the Ministry of Digital Development reports that approximately 2.2 thousand IT companies have either failed to submit the required consent to disclose their tax secrets, or have submitted it incorrectly, thereby potentially jeopardizing their accreditation status.
The Ministry of Digital Development conducts an annual confirmation inspection before July 1. To participate in this confirmation procedure, accredited organizations must submit their application and supporting documents no later than June 1. As clarified by Maksut Igorevich Shadayev, Minister of Digital Development, IT companies planning to undergo re-accreditation must provide their consent to disclose tax information by June 1, 2023[1].
We strongly recommend that all accredited IT companies submit their consent to disclose tax information as soon as possible, and certainly no later than June 1, 2023, to retain their accreditation.
Should you have any further questions or wish to discuss any aspect in more detail, please email Anton Kabakov or Natalia Vorobyeva.
Sincerely,
[1] https://www.interfax.ru/russia/901215