Major Changes In The Tax Legislation Entering Into Force On January 01, 2009
TAX AUDIT (ADMINISTRATION)
On January 01, 2009, the provisions which has long been
introduced into the Tax Code (hereinafter the "Tax Code")
will enter into force prescribing the mandatory extrajudicial
procedure for appealing against decisions of tax authorities to
subject a taxpayer to tax liability or to refuse to subject to tax
liability.
Judicial appeal against such decisions is only possible after
taking recourse to a higher tax authority.
In the event an appeal is filed with a higher tax authority, the
decision being appealed enters into force only upon examination of
the taxpayer's appeal application. Prior to the date specified
the tax authority does not have the right to perform any actions
aimed to enforce the decision being appealed.
Thus, in the event you have, or are going to, become a subject
of tax inspections, appeals against the results of such inspections
(both cameral and field) where a decision is made after January 01,
2009, shall be made in accordance with the new procedure.
INCOME TAX
1. Expenses on remuneration of labor (Article 255
of the Tax Code)
1) From January 01, 2009, the list of expenses on remuneration
of labor recognized for tax purposes (toward reducing the income
tax base) is to be extended. A taxpayer is entitled to include the
following into such expenses:
Amounts of payments (contributions) of employers made pursuant
to the Federal Law "On additional insurance contributions to
the funded component of labor pensions and state support for the
formation of pension savings". These contributions are
recognized for tax purposes within the overall limit – in
the amount not exceeding 12 percent of expenses on remuneration of
labor fixed for employers' payments (contributions) payable
under employee long-term life insurance contracts, voluntary
pension insurance and/or employee non-state retirement plan;
Expenses on reimbursing employees for expenditures for interest
payments on loans (credits) for purchase and/or construction of
residential premises. The indicated expenses are recognized for tax
purposes in the amount not exceeding 3% of expenses on remuneration
of labor. This provision shall be in effect until January 01,
2012.
Amounts paid to reimburse employee expenditures for interest
payments on loans (credits) for purchase and/or construction of
residential premises are also exempt from the unified social tax
and the personal income tax. We believe that these developments of
the Tax Code may be used to the mutual benefit of employers and
employees as a legal way of optimizing expenses on remuneration of
labor (for instance, these payments may substitute year-end bonuses
etc.).
2) The maximum value of contributions under voluntary personal
insurance agreements, which may be recognized towards reducing the
income tax base, has been increased. From January 01, 2009, such
expenses may be included by the taxpayer in the amount not
exceeding 6 percent of the expenses on remuneration of labor
(currently 3 percent).
2. Expenses on scientific research and/or
development activity (Article 262 of the Tax
Code)
For the purpose of encouraging scientific research and
development activity, taxpayer expenses in these fields (including
those that yielded no positive result) in accordance with the list
determined by the Government of the Russian Federation, shall be
recognized in the reporting (tax) period in which they were
incurred and included into other expenses in the amount of actual
expenditures with the factor of 1.5.
For the first time in tax legislation a provision enabling the
taxpayer to decrease the income tax base by an amount exceeding the
taxpayers actual expenses is established.
3. Other expenses related to production and/or sale
(Article 264 of the Tax Code)
1) From January 01, 2009, the taxpayer is entitled to include
into expenses not only those amounts spent on training and
retraining of employees, but also those spent on their training at
professional education programs in Russian and foreign educational
institutions.
In addition, it will be allowed to recognize expenses on
training of prospective employees who are to be employed for no
less than a year. However, a labor agreement shall be entered into
within three months following the completion of training. If such
agreement is terminated prior to the expiry of one year (except for
termination of a labor agreement on account of circumstances beyond
the reasonable control of the parties – Article 83 of the
Labor Code of the Russian Federation), the taxpayer shall include
the amounts spent...
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