The Russian Federal Tax Service has explained which income IT companies can recognize to apply reduced rates of insurance contributions in 2017-2023.
Under article 427 of the Russian Tax Code, IT companies are entitled to apply reduced rates of insurance contributions provided that the following conditions are met simultaneously:
In its clarifications the Federal Tax Service stated that when it assesses revenues for the purpose of the incentive an IT company may book the following:
– income from the sale of its own produced software;
– income from the supply of services (performance of work) involving the development, adjustment and modification of software, including software of partner organizations;
– income from the supply of services (performance of work) involving the installation, testing and support of software which the company has developed, adjusted or modified.
Consequently, if the company receives revenues from the sale of software it did not develop, it cannot book such revenues when it assesses the share of income for the purpose of applying reduced rates of insurance contributions. If all the above conditions are met, the company may apply the following insurance contributions during 2019:
Please contact Acsour’s specialists with questions about how tax legislation should be applied.