March 28, 2016 at 10:04The Ministry of Economic Development supported the new proposals of the Open Government to support innovative companies
The open government has proposed a number of departments to ease tax conditions for research and innovation companies. The deputy director of the corresponding department of the government of the Russian Federation, Georgy Belozerov, sent a letter about this to the Ministry of Economic Development, the Ministry of Finance, the Ministry of Industry and Trade, the Ministry of Economic Development and the Federal Agency for Scientific Organizations (FANO).
The proposal includes four innovations.
First, the Open Government proposes to reduce income tax. Now, when calculating the profit for taxes, an innovative company can deduct from the income the costs of research and development (R&D), using a coefficient of 1.5 (i.e. 150% of the costs). The document also proposes to introduce a coefficient of 2 in order to deduct not 150%, but 200% of R&D expenses - and then the company will be able to save 20% when paying income tax. To facilitate administration, Belozerov also proposes to amend the Tax Code, so that the verification of the essence of the work is not carried out by the tax authority, but by the Ministry of Education and Science.
The current benefit is difficult to obtain and administer. The 10% savings (currently in effect) seem insignificant to the business. In 2014, only 64 companies took advantage of it. One of such companies was ABBYY , Anna Zharkova, ABBYY Deputy Director for Government Relations , told Vedomosti. She admits that increasing the coefficient to two will make the benefit more in demand.
Without simplifying administration, this measure is unlikely to be attractive, agrees Alisa Melkonyan , partner of the KPMG Tax and Legal Advisory Department .
Secondly, the open government proposes to reduce the income tax that a company receives from granting rights (for example, selling software licenses) to the results of its intellectual activity to 5%. According to Vasily Markov , head of Deloitte 's tax breaks group , this tax in Russia is 20%.
Other countries provide tax incentives for such property, an open government letter said. But for Russia to catch up with other countries, this measure alone is not enough, Alisa Melkonyan believes. According to her, Russian legislation loses in terms of legal protection of intellectual property, and this may be more important for its placement in the country. Zharkova from ABBYY considers the tax cut from 20 to 5% significant: the money saved by the company can be spent on new products and technologies, she is convinced.
The third measure that the open government offers is the refusal of income tax on intellectual property, which enterprises put on their balance: computer programs, patents for inventions, industrial designs.
The level of work with intangible assets in Russia is low, says Alina Akinshina, chief operating officer of Online Patent (Intellectual Property Management). Companies receive income from them, but rarely put it on the balance sheet, since this increases the tax base of income tax. The proposed measure may reduce the number of shadow operations with the results of intellectual activity in Russia, she said.
Fourth, the Open Government advocates extending the preferential insurance premium rate for IT companies at 14% instead of the standard 30%.
“Our goal is to stimulate the turnover of innovative products, both export and domestic. Additional measures are needed to support companies in the domestic market, ”said Open Government Minister Mikhail Abyzov.
The representative of the Ministry of Economic Development said that he supported the proposals of the Open Government.
In November 2015, Megamind wrotethat the Ministry of Industry and Trade of the Russian Federation proposed to subsidize manufacturers of four areas of iron to compensate for loan debts and R&D expenses: telecommunication equipment, computer equipment, equipment for the production of electronic components and intelligent control systems.
According to the agency’s intention, a competition for subsidies should be organized, the winners of which will receive compensation: in the field of developing intelligent control systems they will give 1 billion rubles, projects in the field of telecommunication equipment production can receive up to 1.5 billion rubles, and companies producing special technological equipment may claim 2 billion rubles.
Most of all, projects in the field of development of computer technology should receive - up to 2.5 billion.
The proposal includes four innovations.
First, the Open Government proposes to reduce income tax. Now, when calculating the profit for taxes, an innovative company can deduct from the income the costs of research and development (R&D), using a coefficient of 1.5 (i.e. 150% of the costs). The document also proposes to introduce a coefficient of 2 in order to deduct not 150%, but 200% of R&D expenses - and then the company will be able to save 20% when paying income tax. To facilitate administration, Belozerov also proposes to amend the Tax Code, so that the verification of the essence of the work is not carried out by the tax authority, but by the Ministry of Education and Science.
The current benefit is difficult to obtain and administer. The 10% savings (currently in effect) seem insignificant to the business. In 2014, only 64 companies took advantage of it. One of such companies was ABBYY , Anna Zharkova, ABBYY Deputy Director for Government Relations , told Vedomosti. She admits that increasing the coefficient to two will make the benefit more in demand.
Without simplifying administration, this measure is unlikely to be attractive, agrees Alisa Melkonyan , partner of the KPMG Tax and Legal Advisory Department .
Secondly, the open government proposes to reduce the income tax that a company receives from granting rights (for example, selling software licenses) to the results of its intellectual activity to 5%. According to Vasily Markov , head of Deloitte 's tax breaks group , this tax in Russia is 20%.
Other countries provide tax incentives for such property, an open government letter said. But for Russia to catch up with other countries, this measure alone is not enough, Alisa Melkonyan believes. According to her, Russian legislation loses in terms of legal protection of intellectual property, and this may be more important for its placement in the country. Zharkova from ABBYY considers the tax cut from 20 to 5% significant: the money saved by the company can be spent on new products and technologies, she is convinced.
The third measure that the open government offers is the refusal of income tax on intellectual property, which enterprises put on their balance: computer programs, patents for inventions, industrial designs.
The level of work with intangible assets in Russia is low, says Alina Akinshina, chief operating officer of Online Patent (Intellectual Property Management). Companies receive income from them, but rarely put it on the balance sheet, since this increases the tax base of income tax. The proposed measure may reduce the number of shadow operations with the results of intellectual activity in Russia, she said.
Fourth, the Open Government advocates extending the preferential insurance premium rate for IT companies at 14% instead of the standard 30%.
The reduced rate is valid until the end of 2017, after which it will be gradually canceled in order to reach the usual level by January 1, 2020. The Ministry of Communications proposed to extend the 14 percent tariff until the end of 2023, and finally cancel the benefits only in 2026. But the Ministry of Finance, the Ministry of Health and the Ministry of Labor objected to the extension.Extension of reduced rates is the most important measure of the industry’s support from the proposed ones, agree Melkonyan from KPMG and director of the Skolkovo IT cluster Igor Bogachev. According to him, tax breaks are significant only for large companies, which are still few. However, in the future, with the development of the industry, they will still become important, says Bogachev.
“Our goal is to stimulate the turnover of innovative products, both export and domestic. Additional measures are needed to support companies in the domestic market, ”said Open Government Minister Mikhail Abyzov.
The representative of the Ministry of Economic Development said that he supported the proposals of the Open Government.
In November 2015, Megamind wrotethat the Ministry of Industry and Trade of the Russian Federation proposed to subsidize manufacturers of four areas of iron to compensate for loan debts and R&D expenses: telecommunication equipment, computer equipment, equipment for the production of electronic components and intelligent control systems.
According to the agency’s intention, a competition for subsidies should be organized, the winners of which will receive compensation: in the field of developing intelligent control systems they will give 1 billion rubles, projects in the field of telecommunication equipment production can receive up to 1.5 billion rubles, and companies producing special technological equipment may claim 2 billion rubles.
Most of all, projects in the field of development of computer technology should receive - up to 2.5 billion.