Companies working with foreigners will retain tax benefits


In the second reading, a bill was adopted that allows
organizations to apply tax benefits when working with foreign counterparties.
Now, if the contract was concluded with a foreign company before March 5, 2022,
it will be possible to apply the same benefits that were previously available
under double taxation avoidance agreements.

Tax benefits will be resumed if they were previously
stipulated in agreements with unfriendly countries, but were suspended. They
will be valid when paying for goods and services of foreign companies. This
will allow Russian companies to save significantly.

Tax benefits will apply to:

  • Interest
    payments to foreign banking and credit organizations.
  • To
    pay for software licenses under existing contracts and any other intangible
    assets that do not have an analogue on the Russian market.
  • To
    pay for international content and receive information that is only available

Also, the benefits will be extended when paying for
transport leased, as well as when receiving royalties for the rights to stream
sports events.

The new law will be another measure to support foreign
businesses and Russian companies working with foreign counterparties.
Previously, foreign companies operating in Russia and receiving income in the
country retained part of their tax benefits. In particular, the law proposed to
reduce the tax rate or exempt from tax altogether in areas related to insurance
and lending.

The tax benefits adopted for Russian businesses will
almost completely coincide with the benefits for foreign companies. According
to the government, this will help reduce the negative impact on the economy.
The laws will help reduce the burden – now most payments will go only in favor
of Russia.

However, it is also necessary to understand that tax
incentives will be able to work correctly only if the countries in which
foreign companies and counterparties are registered do not introduce the same
measures. If similar benefits to Russian ones are introduced in the countries
of registration of companies, this can only aggravate the situation. First of
all, it will affect foreign businesses operating in Russia and receiving
passive income here.

And yet the innovations have a positive effect – as
mentioned earlier, it will help in the recovery of the country’s economy and in
the resumption of the work of companies that previously suspended their
activities. It is expected that the interest in working between international
companies will gradually grow.


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