The Government and various government departments develop and start to implement support programs for companies in the conditions of pandemic. The “Raschet” asked Nurshat Kalimullin, Acsour’s ccountant to tell us about the supporting measures that are most popular among entrepreneurs today.
There is a number of tools to help companies in the conditions of spreading of the new coronavirus infection. We will explain in detail how to apply some of the measures listed in this article later in this issue of the “Raschet”.
One of the first measures of state support was the relaxation of control over business. Until the end of 2020, enterprises included in the register of small and medium-sized business entities and non-profit organizations with up to 200 employees will be inspected by auditors only in an unscheduled basis according to the list of inspections approved in a separate listing. This list specifies that a planned control activity is only performed in cases where there is a threat of harm to the life and health of citizens, as well as in case of a natural and man-made emergency. For all other cases, scheduled inspections will only be carried out if the company’s production facilities and individual entrepreneurs are classified as high or extremely high risk.
One of the key points of this measure is the fact that, in 2020, these companies and individual entrepreneurs will be checked using remote monitoring tools, including video and audio communications.
The Government has previously suspended all on-site tax inspections and blocking the legal entities’ accounts until May 31, and also extended the deadlines for responding to demands of submission of the documents, received from March 1 to May 31, from 10 to 30 days. If a demand is received as part of a desk audit of the VAT declaration, the response period is extended to 20 days.
Companies from the most affected industries, as well as those included in the list of strategic, systemic and city-forming organizations affected by the consequences of the fight against the pandemic, may count on deferral or instalment on taxes and contributions in 2020. The list of the most affected branches of the economy can be found in the Government’s Decree No. 434 dated April 3, 2020. Please note that this benefit does not apply to the personal income tax and VAT.
And a deferral for trauma contributions will be provided automatically if the inspectorate grants a deferral for other contributions. The procedure for obtaining a benefit is quite simple: you need to submit an application in the form recommended by the Federal Tax Service of Russia until December 1, 2020 and to attach to it an obligation to comply with conditions of deferral, calculations or declarations of taxes and contributions, on which the benefit will be provided, and a schedule for the repayment of debts. If the company plans to obtain a deferral for a period of more than six months, it is necessary to attach a collateral to the set of documents (bank guarantee or real estate mortgage). In order to understand for which deferral your company may count on, check the compliance of the defining conditions in Table 1.
|Type of organization||Instalment/deferral period||Conditions for obtaining|
|Systemic and the largest taxpayers, strategic, city-forming ones||For five years||reduction of income by more than 50%|
|For three years||reduction of income by more than 30%|
|Systemic, the largest|
taxpayers and organizations that sell socially important goods, strategic and city-forming ones
|One year||reduction of income by more than 50%|
|Nine month||reduction of income by more than 20%|
|Six month||reduction of income by more than 10%|
|Three month||в остальных случаях|
|All other individual entrepreneurs and organizations||One year||reduction of income by more than 50% or income was reduced by more than 30% and simultaneously a loss was received|
|Nine month||reduction of income by more than 30% or income was reduced by more than 20% and simultaneously a loss was received|
|Six month||reduction of income by more than 20%|
|Three month||in other cases|
This measure allows companies to obtain a significant reduction of the tax burden, but it is worth noting that your code in the Russian Industry Classification System (Russian acronym “OKVED”) should strictly correspond to the code of the affected industry, which is given in the government’s decree.
In our practice, we have already encountered cases of refusal to grant preferences, when despite the fact that the company formally conducts its activities within the affected industry and even receives all revenue only for it, owing to the OKVED, the company is not in the corresponding list.
Starting from April 1, 2020, small and medium-sized business entities included in the register of SMEs will pay insurance premiums at reduced rates for payments exceeding the amount of federal minimum living wage (12,130 rubles in 2020):
It is important to understand that reduced rates are only applied after the exceeding of the amount of minimum living wage by the salary, and they may be applied until the end of the year. At the same time, the reduced rate has no retroactive force and amounts of contributions from salary accrued before April 1 is not subject to recalculation. As soon as the employee’s income exceeds the minimum living wage, the salary will consist of two parts: taxable pursuant to the general rules and, from the excess amount – at reduced rates.
For payments within the minimum living wage, the payment rules and rates remain unaltered: for CPI – 22%, for CHI – 5.1%, for TDM – 2.9%. This tool of business support is primarily intended to maintain employment and the level of salary. Since the quarantine measures should lead to a reduction in consumption level and, consequently, in revenue, reducing the cost on the payroll budget will allow companies to retain employees until full business recovery
Example of calculating insurance premiums
To understand how to calculate insurance premiums under the new rules, let us have a look at an example of calculating at reduced rates of contributions and compare it with the results of calculations at previously existing rates, provided that the limit base for accruing contributions was not exceeded in the current year.
The employee was accrued a salary for May in the amount of 35,000 rubles. Payment in excess of the minimum living wage will be 35,000 rubles – 12,130 rubles = 22,870 rubles. The results of calculations are presented in table 2 for simplification. It should be immediately noted that the insured in this example saves 3430.5 rubles as a result of applying reduced rates of insurance premiums.
|Type of insurance premiums||From a payment that does not exceed the minimum living wage, RUB.||From a payment exceeding the minimum living wage, RUB.||The amount of contributions according to the previous calculation procedure||Savings, RUB.|
Government’s Decree No. 428 dated April 3, 2020 forbids the commencement of bankruptcy cases upon application of the debtor. The implementation of the moratorium will not just postpone the start of the bankruptcy process, but will help to save the mortgaged property of the debtor and suspend the enforcement proceedings.
This tool may be used by: organizations and individual entrepreneurs from the industries represented in the list of the most affected ones; systemic enterprises; strategic organizations that ensure the implementation of unified state policy; strategic enterprises and strategic joint-stock companies according to the list approved by Decree of the President of the Russian Federation No. 1009 dated August 4, 2020. The moratorium is valid for six months starting from April 3, 2020.
Apart from reducing the rates on insurance premiums, another tool for maintaining employment in the economy and retaining the company’s personnel has become direct gratuitous payments from the budget, for which it is possible to apply to the Federal Tax Service as early as May 1 of the current year. To receive this payment, the company should be listed in the SMEs register as of March 1, 2020 and be included in the list of the most affected industries, which we mentioned earlier.
At the same time, the organization should not undergo liquidation or bankruptcy process and should retain 90% of personnel compared to March of this year, which will be determined on the basis of the SZV-M report. However, if the company has arrears on taxes and insurance premiums over 3,000 rubles, then it will not receive a subsidy.
In contrast to other supporting measures, the terms for receiving gratuitous financial assistance is considerably limited. A statement for subsidies should be submitted by the telecommunications link in the following terms: for receiving subsidies for April – from May 1 to June 1; for receiving subsidies for May – from June 1 to July 1. The amount of subsidies will be 12,130 rubles for each employee of the organization. For individual entrepreneurs with employees, to determine the amount of the subsidy, it is necessary to multiply this amount by the number of employees increased by one.
Summing up, it may be concluded that the only supporting measure, that every Russian company may count on is the limitation of business inspections. The other tools do not apply to all enterprises and branches of the economy.
This measure may not be enough, since many companies have almost completely lost revenue and may not open at all after the end of the quarantine. In addition, many tools, as previously noted, are aimed at maintaining employment rather than helping businesses to hold up well. The government is aware of this, and the Russian leader has already announced the preparation of a new set of business supporting measures, including expanding the list of affected industries, tax write-off for the second quarter and preferential loans for businesses