On 31 August 2021, the Federal Tax Service has published a clarification. Accordingly, from 2 August 2021, regions of Russia may set a reduced corporate income tax rate for the income received by taxpayers from the provision of rights to use the results of intellectual property (IP) under a licensing agreement if the following conditions are met:
- The reduced tax rate is applicable on condition that separate records are kept of income/expenses received/incurred in connection with such activities in the region concerned and income/expenses received/incurred in connection with other activities; and
- The types of intellectual property assets for which the reduced tax rate on licensing profits will be available, the level of that tax rate and additional conditions for the application of that rate are to be set by regional laws.
These amendments were introduced to the Tax Code through Federal Law No. 305-FZ of 2 July 2021.
