A number of bills aimed at liberalizing the tax regime for IT companies are to be passed before December 2019

6 august 2018 | Interfax

The Skolkovo foundation (the competencies center for the regulations and standards section of the Digital Economy program) has suggested cancelling VAT for sales of software, IT outsourcing, and cloud services from January 1, 2019. The relevant amendments to the Tax Code of Russia have been developed by the Skolkovo foundation and refined by the Ministry for Finance, Interfax notes.

Irina Nikitina
Irina Nikitina
Project Management Office for Implementing the Digital Economy of the Russian Federation Program

Skolkovo suggests to extend the article 149 of the Tax Code titled Transactions Exempted from Taxation in regard to the sale of the results of intellectual activity carried out on the basis of license agreements, including software, IT-outsourcing, and cloud service provision (SaaS).

"The plan is to pass a whole series of bills by December 2019, all of which are aimed at liberalizing the tax regime for IT-companies," Irina Nikitina, Coordinator for Standards and Regulations at the Analytical Center's project management office for the implementation of the Digital Economy Program, told an Interfax correspondent.

In addition to amending the Tax Code, the proposed bills also include amendments to the laws on the contract system for state procurement, procurement for certain categories of legal entities, and other standards and regulations, all aimed at supporting providers of IT solutions, software, and information security solutions, the expert noted.

"Fine-tuning the parameters of the benefits will help make Russian IT and internet companies more competitive on the international market, increase the number of highly skilled IT-staff, drive up worker pay in IT-companies, reduce software development times and improve the quality of software," Ms Nikitina summed up.

Photo: from open sources