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  • Tax incentives: social insurance concessions and others

    Social insurance concessions

    Reduced rates of social insurance contributions ranging from 14% to 20% (compared to the 30% standard rate) on annual earnings up to a cap of RUB 711 thousand per person to the Pension Fund of Russia and RUB 670 thousand per person to the Social Insurance Fund, and an exemption for earnings exceeding this cap, may apply to Russian companies/individual entrepreneurs ("IEs”) that meet one or more of the following criteria:

    • They operate in software development (more than 7 employees)

    • The taxpayer is a resident of a Technology & Innovation SEZ

    • The taxpayer is in the production and social spheres applying the simplified taxation regime


    150%-profit tax deduction

    Companies conducting eligible R&D activities can apply for a 150% super-deduction of respective costs (including labour costs, contractor expenses, depreciation of equipment, and certain other expenses) to reduce their profit tax. Such a deduction can be made even if their R&D activities fail to produce a new product or new service, etc. The list of eligible R&D activitie provides a wide range of opportunities for making a claim for a 150%-profit tax deduction in any industry, including high-tech, retail, banking, manufacturing and others.


    Other incentives

    • There is an import VAT exemption available for technological equipment with no equivalent produced in Russia, according to a government approved list (18% import VAT normally applies). Application of the regime may improve the working capital position of a VAT-payer, or reduce equipment costs for VAT non-payers


    • Exemption from import customs duties in respect of goods imported by a foreign investor as a capital contribution to its Russian subsidiary


    • Accelerated depreciation is available for certain leased assets; assets used for research and development; assets used in multi-shift in challenging conditions (with respect to assets put into operation before 1 January 2014 only); or assets with a high energy efficiency rating


    • The profit tax rate for priority medical and educational activities meeting certain criteria is 0%. The same applies to certain agricultural producers


    • Other forms of federal and regional support, including interest subsidies, investment tax credits and grants, may be available for certain investment projects

    Source: Deloitte

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