Insurance contribution rate decreased from 30% to 15%

All small and medium-sized businesses (SMEs) will now pay reduced insurance contribution rates. From that part of the salary that exceeds the minimum wage (12,130 ₽ in 2020) you need to pay 15%. Up to the amount of the minimum wage, the rate remains the same – 30%. At the same time, the President said that this is not a temporary measure, but is designed for the long term.

Fixed contributions for individual entrepreneurs remain unchanged.

You can check whether your company is considered SME on the Tax Service website rmsp.nalog.ru. The criteria can be found at rmsp.nalog.ru/qa.html

The government has compiled a list of areas that have been hit hardest by the coronavirus pandemic

Most of the government support measures which we will discuss below apply to certain sectors that are most unlucky. They include:

• air transportation, airport activities, trucking;
• culture, organization of leisure and entertainment;
• fitness activities and sports;
• activities of travel agencies and other organizations providing tourism services;
• hotel business;
• catering;
• activities of continuing education organizations, non-governmental educational institutions;
• organization of conferences and exhibitions;
• activities for the provision of domestic services to the population (repair, washing, dry cleaning, hairdressing and beauty salons).

You can check whether your company belongs to an affected industry according to OKVED code on the Tax Service website nalog.ru/rn77/business-support-2020/9704514/

Grants for small and medium-sized businesses

Organizations from the affected industries can receive free financial subsidy from the state in May and June.  The company must meet the following conditions:

• The organization’s debt to the tax service must not exceed 3,000 ₽.
• The number of employees in April and May must be at least 90% compared to March 2020.

It will be paid 1 minimum wage (12,130 ₽) for each employee in the organization (the number of employees in March is used for calculation). The money will not come automatically – you must submit an application. The tax service recommends sending an application through the taxpayer’s personal account as it helps to gets the grant faster.

Interest-free loans for paying salaries

Banks will issue loans to SMEs from the list of affected industries for salary payments at 0%. First of all, interest-free loans will be available at Sberbank, VTB, SME Bank, Promsvyazbank, Gazprombank, Alfa Bank, and Otkritie Bank.

The loan amount is calculated by the formula = number of employees * minimum wage in the region * number of months of lending.

Loans will be given to companies with a business life of more than one year. The maximum loan term is 1 year. In this case, for the first 6 months, the rate will be 0%, and then increase to 4%.

A loan can only be issued by a bank in the salary project.

For reference:

At the federal level, the minimum wage in Russia is 12,130 ₽. Constituent entities of the Russian Federation are entitled to establish their own minimum wage. For instance:

• minimum wage in Moscow – 20,195 ₽
• minimum wage in the Moscow region – 15,000 ₽
• minimum wage in St. Petersburg – 19,000 ₽
• minimum wage in the Leningrad region – 12,800 ₽

Deferred rental payment for real estate

The most affected sectors of the economy will be able to get a deferment. According to the “anti-crisis” law, the owner of the premises is obliged to conclude an additional agreement with a lessee on the deferral of payment of rent within 30 days after the lessee applies. The main condition for using this support measure: the agreement must have been signed before the introduction of high alert or emergency.

Also, the lessee has the right to demand a reduction in rent if they could not use it because of state measures to combat coronavirus.

On April 6, the Ministry of Economic Development introduced a draft resolution that specifies the conditions and timeframes for deferment.

The support measure applies to any property other than residential.

At the suggestion of the Ministry of Economic Development, while high alert / emergency situations are in place lessees are completely exempt from paying property rents. After the cancellation of special regimes, lessees will be able to pay only 50% of the rent before October 1. Tenants will be able to pay the remaining rent arrears during the period 2021-2023 on an equal monthly basis. Payment of utility bills by the lessee remains unchanged.

It was recommended that the regions provide measures of support to owners of non-residential premises regarding property tax.

Bankruptcy moratorium

From April 4, the Government has introduced a moratorium on bankruptcy for six months: the courts will not accept applications for declaring a debtor bankrupt. If the application was submitted before the moratorium began, but has not yet been accepted by the court, then it will also be returned to the creditor.

The moratorium extends to the most affected sectors, as well as strategic and backbone organizations .

On the website of the Federal Tax Service (service.nalog.ru/covid), you can check, whether the moratorium applies specifically to your company.

All field tax audits are canceled

Until June 1 the tax service will not conduct field audits. The exception is audits for which the statute of limitations expires before June 1.

Deferment of tax and contributions payments

Small and medium-sized businesses (SMEs) from the list of the most affected industries will receive a tax deferral.

A deferral of 6 months applies to:

1. Income tax.
2. Tax on the simplified tax system.
3. Single agricultural tax.
4. Taxes and advance payments for March and the 1st quarter of 2020. The exceptions are VAT, NAP, personal income tax paid through a tax agent.

The following are extended 4 months:

• Taxes and advance payments for April-June, six months (2nd quarter) of 2020. Exceptions are VAT and personal income tax paid through a tax agent.
• Tax on the patent taxation system (Q2 2020).

For 3 months:

• periods of payment of personal income tax for 2019 for individual entrepreneurs.

The deadlines for advance payments of transport tax, property tax of organizations and land tax are extended:

• for the first quarter of 2020 – until October 30, 2020;
• for the second quarter of 2020 – until December 30, 2020.

For SMEs  the deadlines for paying insurance contributions for employees are extended by 4-6 months.

Upon a certain decrease in income or loss, it is possible to obtain a deferral of up to 1 year or an installment plan of up to 5 years.

The tax authority suspends the application of penalties

Until May 1, 2020, the tax authority will not block funds in a bank account for writing off debts against all SMEs and companies from the most affected spheres.

Change in the deadlines for reporting, filing returns and paying taxes

Tax declarations and reports (except for VAT and calculations of insurance contributions) are postponed for three months, the dates for which fell in March, April and May 2020.

If from March 1 to June 1, 2020 a company receives from the tax authority a demand to provide an explanation or any additional documents, then 20 additional days will be allocated for the response (10 additional working days for VAT demands).