Key tax amendments reviewed by the State Duma in the first reading may be significantly refined. The Committee on Budget and Taxes recommends introducing a more gradual and phased transition for a number of contentious provisions, as well as mitigating the consequences for small and medium-sized businesses. Acsour experts have analyzed the proposed changes and are ready to help companies prepare in advance for the upcoming challenges.
Key Proposals for a Smoother Transition
The Committee's findings contain constructive proposals aimed at reducing the burden on businesses:
Phased Transition for Income Thresholds. Consideration is being given to making the transition to new income thresholds more gradual. Exceeding these thresholds would lead to:
Gradual Withdrawal of the VAT Exemption for Russian Software. A phased withdrawal of the VAT exemption for transactions involving rights to Russian software and databases, as well as their use, is proposed. This will allow the IT sector time to adapt.
Phased Transition for Income Thresholds. Consideration is being given to making the transition to new income thresholds more gradual. Exceeding these thresholds would lead to:
- For the Simplified Taxation System (STS or "USN"): the arising obligation to pay Value Added Tax (VAT).
- For the Patent System (PSN): the loss of the right to apply the patent.
Gradual Withdrawal of the VAT Exemption for Russian Software. A phased withdrawal of the VAT exemption for transactions involving rights to Russian software and databases, as well as their use, is proposed. This will allow the IT sector time to adapt.
The current VAT registration threshold stands at 60 million rubles.
Initially, a proposal was put forward to reduce the threshold to 10 million rubles effective 2026.
A gradual reduction is now under consideration: 20 million rubles in 2026, 15 million in 2027, and 10 million in 2028.
Other Significant Initiatives for Business
In addition to softening the transition, the Committee has put forward a number of other important initiatives:
- Penalty Moratorium for First-Time VAT Payers under the STS. A temporary moratorium on tax penalties may be introduced for bona fide taxpayers who, for the first time, face the obligation to pay VAT while applying the STS.
- Easing the Ban on Changing the STS Rate. A proposal has been made to revise the strict rule that prohibits companies under the STS with the "income minus expenses" object (5-7% rates) from changing this rate within 3 years after starting to pay VAT.
- Expansion of the Closed List of Expenses under the STS. New items may be added to the list of costs recognized when calculating the tax base for the STS "income minus expenses," which would reduce the tax burden.
- Retention of Reduced Insurance Premium Rates. The Committee supports the idea of maintaining preferential tariff rates for SMEs in socially significant sectors, such as education, housing and utilities, and others.
The recommended refinements are well-considered; however, even in their softened version, the amendments will require significant administrative and financial adjustments from businesses.
Contact our experts to receive a detailed analysis of the proposed changes and develop a plan of action for your business.
Contact our experts to receive a detailed analysis of the proposed changes and develop a plan of action for your business.
