Amid the global economic crisis caused by the COVID-19 pandemic, the Government of the Russian Federation has put in place anti-crisis measures aimed at supporting business, including:

  • Postponement of reporting deadlines

  • Deferral of tax payments and contributions

  • A monthly government subsidy of 12,130 rubles per employee

  • Reduced social insurance premium rates of 15 percent

  • Cancellation of tax audits and penalties

  • Non-tax audit moratorium

  • Credit holidays

  • Interest-free loans to cover salary payments

  • Bankruptcy moratorium

  • Deferral of rental payments for real estate

  • Concessional loans to small and medium enterprises (SMEs).

  • Cost recovery for tour operators

  • Renewal of urgent licenses and other permits

Most of the proposed measures are available only for small and medium-sized enterprises (SMEs), whose business is most affected by the spread of the coronavirus infection from the sectors like aviation, trucking, leisure and entertainment, sports and recreation activities, tourism, hospitality, restaurants & cafes, events and exhibitions, public household services, etc.

However, other representatives of small and medium-sized businesses can also rely on the government support. For example, the reduction of social insurance premium rates to 15%. Moreover, the effect of this measure is not limited only to the period of crisis, and it is believed that for SMEs, reduced rates will operate continuously.

In this context it should be noted that SME businesses in Russia are defined as enterprise with a maximum annual income of two billion rubles and a maximum headcount of 250 people.

If the owners of a Russian company that meets the criteria for small and medium-sized businesses are foreign individuals, then such a company is automatically included in the register of SMEs.

The default assumption is the opposite if the owners of more than 49% of the authorized capital of a Russian company that meets the criteria for small and medium-sized businesses are foreign companies. In this case, in order to be included in the register of SMEs, such a Russian company must prove that its foreign stakeholders are also SMEs. The tax authorities will include such an organisation in the SME register solely on the basis of information confirmed by an auditor.

Only auditors included in the official register of audit organisations can verify compliance of foreign companies with the established requirements and auditors are entitled to submit confirmation of the compliance of foreign companies with the SME requirements only during the period of 1 July to 5 July.

As a result, if you wish to be included on the list of approved SMEs in August 2020, it is important not to waste time and to choose, as soon as possible, an auditor to confirm the SME status of foreign participants in Russian SMEs before 1 July 2020.

It must be borne in mind that a Russian organization will not be able to obtain SME status if a foreign stakeholder has a permanent location in a state recognized offshore by the Ministry of Finance of the Russian Federation.

The content of this article is intended as a general guide to the subject. Consult a qualified professional about your specific circumstances.

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Marina Chelnokova

Audit Director