The State Duma adopted in the first hearing draft Law No. 11078-7 (the Law) on 2 November 2016, regarding changes to the Tax Code and other legislative provisions.
The main provisions of the Law are summarised below:
Carry-forward of losses: The 10-year limitation period for carrying forward losses will be cancelled. For the period 2017-2020, a limitation on the loss amount has been introduced (reduction of the tax base by no more than 50%); this restriction does not apply, however, to various categories of taxpayers enjoying incentives.
Interest on late payment of taxes and other administrative changes: The interest on late payment of taxes, levies and social insurance contributions (left unpaid for more than 30 days) will increase for legal entities and individual entrepreneurs from the current level of 1/300 of the refinancing rate of the Central Bank to 1/150 of the refinancing rate of the Central Bank. Thus, from the 31st day of delay in tax payment, the rate of late payment interest is doubled, i.e., 1/150 instead of 1/300 of the Russian Central Bank key rate per day. This rule will enter into force as of 1 October 2017 and will be applicable only to companies.
VAT: The zero VAT rate on services involving long-distance railway transportation of passengers and luggage in Russia will apply until 2030. In addition, the zero VAT rate on services involving local railway transportation of passengers will be prolonged until 2030.
