- The social contributions rate in the Russian SME sector is reduced from 30% to 15% on the portion of wages that is above the minimum wage (~EUR 150).
- The benefit is available for companies that are included in SME register kept by the Federal Tax Service.
- The change came into force on 1 April 2020.
Criteria for SME status in Russia:
- Up to 250 employees
- Revenue up to RUB 2 billion (~EUR 28 million)
- The total share held by legal entities that do not meet criteria 1-2 above may not be more than 49%
If a foreign shareholder of a Russian SME falls under criteria 1-2 above, its Russian subsidiary company may also benefit from the reduced social charges rate. Notably, the compliance of a foreign participant with the SME criteria should be confirmed by an auditor certified in Russia.
- The Russian entity should analyse whether the entity itself and its parent company comply with the SME criteria (see above).
- The parent company should provide its financial statements to a certified Russian auditor.
- The auditor should provide information on compliance with the SME criteria to the Federal Tax Service between 1-5 July 2020.
- The Federal Tax Service will include the company in the SME Register by 10 August 2020.
Determining whether a company is recognised as a SME in Russia and can thus reduce social security contributions involves a number of deadlines and possibly language barriers. Ecovis Russia is at your disposal if you need our support.
For further information please contact:
Irina Makarova, Certified auditor, ACCA, Head of Audit, ECOVIS Audit-Avangard, Moscow, Russia
Sergey Vyssotsky, Partner, Advisory services, Tax, Accounting & HR, ECOVIS CONSECO Press, Moscow, Russia