details of application practice

details of application practice

Under the conditions of the tax support measures taken for Russian IT companies that are payers of income tax and insurance contributions, the legislation makes it possible to:

  • use a reduced (zero) tax rate on income tax (clause 1.15 of Article 284 of the Tax Code of the Russian Federation);

  • apply a reduced rate of insurance premiums (clauses 1 and 2.2 of Article 427 of the Tax Code of the Russian Federation).

These benefits are valid for the period 2022-2024.

At the same time, a zero rate of income tax (in the amount of 0% to the federal budget and 0% to the regional budget) can be applied starting from the tax period of obtaining a document on state accreditation of an organization that carries out activities in the field of IT.

The single reduced rate of insurance premiums is set at:

  • 7.6% within the established single limit of the base for calculating insurance premiums (2023 – 1,917,000 rubles);

  • 0.0% – above the single limit value of the base for calculating insurance premiums.

Tax preferences can be applied subject to compliance with certain conditions.

In addition to passing the state accreditation procedure (its provisions are approved by the Resolution of the Government of the Russian Federation No. 1729 of 30.09.2022), IT companies must fulfill the condition for the share of revenues, namely, 70% of the total amount of revenues at the end of the reporting (tax, settlement) period. Tax Code of the Russian Federation). The list of income related to IT activities is given in the Tax Code of the Russian Federation (clause 1.15 of article 284 and clause 5 of article 427). This list is exhaustive, and indicated the conditions must be met simultaneously by the IT company.

Accreditation and its impact on benefits

It is unlikely that an IT company will receive an accreditation document on January 1. As practice shows, IT companies receive such a document on different days of the tax (settlement) period that has begun.

For example, an IT company that received state credit in March of this year asked: is the application of a zero rate on income tax and a reduced tariff on insurance contributions from the beginning of 2023 legitimate? The financiers’ answer is positive – yes, legitimately (letter of the Ministry of Finance of Russia dated 05.02.2023 No. 03-03-06/1/40180).

Another company got into a more difficult situation. At the beginning of the current year, she had accreditation, but in January she lost it. However, in March, the organization again received a cherished document on state credit. And in this case, the officials (letter of the Ministry of Finance of Russia dated April 26, 2023, No. 03-03-06/1/38345) approved the use of benefits. At the same time, the financiers clarified that the IT company has the right to apply:

  • zero income tax rate from the beginning of the tax period;

  • a single reduced rate of insurance premiums (7.6% within the established single limit value of the base) from the month of receipt of the accreditation document (Since March).

Similar questions arose last year.

Thus, responding to the request of the organization, whether it can, having received accreditation in July 2022, retrospectively apply a zero rate on income tax from 01.01.2022, FNP clarified the situation in a letter dated 01.25.2023 No. SD-4-3/763@.

If the company in the first half of 2022 did not receive an accreditation document or did not fulfill the condition of a 70% share of income from IT activities, then according to the results of this reporting period, the company had to apply generally established rates (20%) from income tax.

If the necessary conditions are fulfilled at the end of the following reporting (tax) periods (9 months and a calendar year), the company have the right to apply reduced income tax rates to the tax base, calculated as a cumulative sum from the beginning of the tax periodThat is, from 01.01.2022.

As we can see, in the part of using the reduced rate of income tax (paragraph 1, clause 1.15, article 284 of the Tax Code of the Russian Federation), officials emphasize the phrase “…starting from the tax period of receiving the document on state accreditation…”.

The possibility of using a reduced rate of insurance premiums is enshrined in Art. 427 of the Tax Code of the Russian Federation. Clause 1 and Clause 2.2 of this article contain references to subsections of Clause 1, in which the insured organizations, including IT companies, are specified. On paragraph 5 of Art. 427 of the Tax Code of the Russian Federation lists the conditions for applying the reduced rate of insurance premiums, with an indication of premium payers from sub-para. 3 p. 1. Therefore, the condition for the preferential tariff is the presence of an accreditation document becomes feasible from the month of receipt of such a document (Letters of the Ministry of Finance No. 03-03-06/1/40180, 03-03-06/1/38345).

Fulfillment of the condition on the share of income and reflection in the declaration

The condition for the share of income from IT activities (70%) in the total amount of revenue must be fulfilled based on the results of the reporting (settlement) period. Note that the Tax Code of the Russian Federation does not limit the taxpayer in the means of confirming the attribution of certain incomes to the relevant types of activity.

What if the IT company did not meet the required revenue share condition in the 1st quarter, but reached the required level in the following reporting (tax, settlement) periods? How does the benefit work in this case?

At one time, the Ministry of Finance answered this question (letter dated March 22, 2022 No. 03-03-06/1/22054).

If the IT organization fulfills the necessary conditions for the share of income from IT activities based on the results of the following reporting (settlement) periods (semi-annual, 9 months, tax or settlement period – calendar year), such the company has the right to apply:

  • reduced income tax rates to the tax base, calculated by cumulative sum from the beginning of the tax period;

  • reduced rates of insurance premiums from the beginning of this calculation period, i.e. from January 1.

Having paid the contributions for the 1st quarter based on the generally established tariffs, the IT company has the right to recalculate the amount of contributions in the future, making an offset in accordance with the procedure provided for in Art. 78 of the Tax Code of the Russian Federation. In 2023, the organization has the right to dispose of the amount of funds that form a positive balance under the ENS, by offsetting (paragraph 1 of Article 78 of the Tax Code of the Russian Federation) against the future obligation to pay a specific tax (in the case of insurance premiums). To do this, it is necessary to submit a refined calculation for the 1st quarter (the calculation form is given in Appendix 1 to the order of the Federal Tax Service of Russia dated September 29, 2022 No. ED-7-11/878@).

In the calculation of insurance premiums, the declaration of the application of a single reduced tariff is confirmed by filling out Appendix 1 to Section 1 of the calculation. In this application, IT organizations should note (letter of the Ministry of Finance of Russia dated 01.03.2023 No. 03-03-06/1/17004):

  • the sum of all incomes that are taken into account when determining the tax base from the income tax of organizations in accordance with Chapter 25 of the Tax Code of the Russian Federation (line 010);

  • the amount of profile incomes listed in Clause 5 of Art. 427 of the Tax Code of the Russian Federation (line 020);

  • the share of profile income of the organization that carries out activities in the IT field (line 030).

As for the display of data in the income tax return (the form of the declaration is given in Appendix 1 to the order of the Federal Tax Service of Russia dated September 23, 2019 No. ММВ-7-3/475@), the following should be taken into account. Data on income in the declaration are given as a cumulative total of the beginning of the calendar year. The income tax amounts calculated using the general rates for the first quarter will be taken into account when filling out lines 210-230 of sheet 02 “Tax calculation” of the semi-annual declaration (nine months, calendar year) (clause 5.8 of the filling procedure, addendum 2 to order No. 7. When clarifying the taxpayer, there is an overpaid tax to both the federal and regional budgets. After fulfilling the condition on the share of income, the company can also submit to the IFNS a revised declaration on income tax for the 1st quarter. In the revised declaration, tax liabilities will be calculated using a zero tax rate.

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