In six months, Russia may cancel zero VAT on the sale of software
The Russian authorities are thinking about the abolition of zero VAT on the sale of software. This is how they want to compensate for the reduction in income tax for IT companies proposed by Vladimir Putin.
Two days ago, the Russian president announced the so-called “tax maneuver” in the IT sphere. It is planned to cut the income tax of domestic companies from 20% to 3%, as well as to lower the interest on insurance premiums.
However, the Ministry of Communications came up with in advance how to compensate for the losses of the state due to the “maneuver”. The Agency offers a refund of 20% VAT on the sale of licenses and exclusive rights to software. The measure can be implemented as early as January 2021.
This move will bring 42.5 billion rubles to the federal budget in the same year. But there is a significant disadvantage: experts predict an increase in the cost of imported software in the domestic market. Its cost may jump by 16.67%, which will seriously hit suppliers.
The Ministry of Communications also has a proposal to subsidize IT companies from the register of domestic software in order to compensate them for VAT refunds. For this purpose, in 2021, 11.4 billion rubles may be spent, received at the expense of the tax on foreign licenses.
In the association “Domestic Software”, the VAT refund counter-measure was perceived negatively. The management of the organization stated that it would remove the positive effect of the “tax maneuver”. A similar opinion is shared by Kaspersky Lab and ABBYY Russia.
According to Kommersant, the Ministry of Communications worked out various options for countermeasures on behalf of First Deputy Prime Minister Andrei Belousov.
Recall that after Putin’s announcement of future easing, shares of Russian companies jumped. It is expected that the reduction in income tax will stimulate the export of IT developments, which is not subject to VAT. In addition, the Russian tax level in this area will become one of the lowest in the world.
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