On 2 March 2022, the Russian President signed a Decree[1] to promote the accelerated development of the IT sector in Russia.
The benefits are aimed at encouraging and supporting domestic developers of mobile applications and companies engaged in implementing, installing and testing locally produced IT solutions. Only companies accredited by the Russian Ministry of Digital Development, Communications and the Mass Media that are active in the IT sector (IT companies) can be eligible for the benefits.
The benefits which are being introduced can be divided into the following categories:
social:
- providing support in the form of grants to promising projects involving the development of locally produced solutions;
- allocating finances to IT companies for them to improve housing conditions of their employees and to raise their salaries. Specifically, granting concessionary mortgages to employees of IT companies;
- granting deferment of the call-up to the army for employees of IT companies until they reach the age of 27 years old during their employment with IT companies. The Russian Government will determine the categories of individuals to whom such right of deferment will be granted, as well as the procedure of granting it;
- introducing a simplified procedure for obtaining a work permit and a residence permit for foreign nationals engaged to work with Russian IT companies;
economic:
- introducing a profit tax rate of 0% for IT companies until 31 December 2024. Please be reminded that previously tax benefits for IT companies provided for a reduction of the profit tax rate from 20% to 3%[2];
- granting concessionary loans at a rate not greater than 3% to secure IT companies’ day-to-day operations and implementation of new projects;
- extending tax benefits to IT companies earning from the posting of advertising and supply of ancillary services in applications and online services, as well as the sale, installation, testing of and support for domestic IT products;
- granting relief to IT companies from tax, currency and other types of control for a period of three years.
Thus, the Russian Government is taking the necessary measures to avoid any slowdown in the development of the IT sector in Russia during the period of sanction restrictions.
[1] The Russian President’s Order No. 83 “On measures to promote accelerated development of the information technologies sector in Russia” dated 2 March 2022
[2] Article 1(4) of Federal Law No. 265-FZ “On amending Part II of the Russian Tax Code” dated 31 July 2020