At the end of November 2012 the President of the Russian Federation signed two laws amending the Tax Code of the Russian Federation (the “Tax Code”) (“Law No. 202-FZ” and “Law No. 206-FZ”).
Law No. 202-FZ established that as of 1st January 2013 movable real estate recorded from a specified date as fixed assets are no longer subject to corporate property tax. Consequently, the long-standing dilemma relating to the possibility of transport vehicles being subject to both corporate property tax and transport tax was settled in favour of taxpayers.
Also, cultural heritage resources of federal significance, ice-breaker ships, space objects and some other types of property are no longer subject to corporate property tax from 1 January 2013.
Furthermore, Law No. 202-FZ established that when the rates of transport tax and corporate property tax are not determined by the laws of the constituent entities of the Russian Federation, and the rate of land tax is not determined by the acts of relevant local authorities, then tax will be applied at the rates established by the respective provisions of the Tax Code.
Law No. 206-FZ sets out the general procedure for accruing depreciation in respect of property relating to mobilization capacities.
Moreover, Law No. 206-FZ releases those required to pay profits tax from the obligation to add bonus depreciation back to income in instances where fixed assets are sold before the expiry of 5 years from the date of their commissioning, except for cases where the fixed assets are sold to related persons.
Law No. 206-FZ restricts the right of taxpayers to apply the special multiplying co-efficient to a basic standard of depreciation in respect of fixed assets used in harsh environmental conditions. These rules apply only to fixed assets recorded before 1 January 2014.
Law No. 206-FZ also sets out a concept of "irrecoverable debt" for the purposes of forming respective reserves.
Amendments introduced by these laws came into force on 1 January 2013, except for certain specific provisions, which have a different effective date.
The amendments introduced are expected to have positive results. Indeed, they allow taxpayers to exclude certain types of property from taxation meaning that there will be a reduction in the tax burden on taxpayers. Moreover, certain provisions of tax legislation will be clarified in order to exclude further ambiguity and this may decrease the number of tax disputes.
[Federal Law No. 202-FZ "On Amending Part Two of the Tax Code of the Russian Federation", dated 29 November 2012; Federal Law No. 206-FZ "On Amending Chapters 21 and 25 of Part Two of the Tax Code of the Russian Federation and Article 2 of Federal Law “On Amending Parts One and Two of the Tax Code of the Russian Federation and Certain Legislative Acts of the Russian Federation", dated 29 November 2012]