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October 12, 2021, 15:50

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Photo by E. Samarin. Press Service of the Mayor and the Moscow Government

Among other things, organizations serving diplomatic missions in the capital will be exempted from property tax.

A number of new tax incentives will appear in Moscow. The relevant bill was considered Sergei Sobyaninat a meeting of the Presidium of the Moscow Government. Based on the results of consideration, the document will be submitted to the Moscow City Duma.

The bill introduces new tax incentives, as well as amends the taxation procedure for certain types of real estate and business.

Many federal universities located in Moscow are experiencing a shortage of places in hostels for nonresident students and postgraduates. To stimulate private investment in the construction of student dormitories, it is proposed to exempt organizations that are the owners of dormitories from property tax until December 31, 2025 in respect of residential premises transferred under lease agreements to state universities. The exemption will only apply to buildings commissioned after January 1, 2020.

Thanks to this, it will be possible to build new dormitories with a total number of rooms from 25 to 100 thousand beds, as well as reduce rental rates.

Until December 31, 2025, it is proposed to exempt federal organizations created to fulfill obligations to service diplomatic missions, consulates and international organizations from property tax. The tax exemption will apply to residential premises, garages and parking spaces.

The new privilege will allow to reduce by four times the property tax used by diplomatic missions, consulates and international organizations. Usually such property is architectural monuments, objects of cultural heritage of federal and regional significance. The funds released will be used to improve the maintenance, repair and restoration of these historic buildings.

The bill proposes to introduce an unannounced procedure for granting transport tax exemptions for taxpayers-organizations. The privilege will be provided on the basis of information that the tax authorities receive in accordance with federal laws. A similar non-declaring procedure for granting benefits has been in effect with respect to individual taxpayers since last year.

Taking into account the changes introduced in November 2020 to the Tax Code of the Russian Federation, the draft law proposes amendments to the Law of the City of Moscow dated October 31, 2012 No. 53 “On the patent taxation system” in terms of adjusting the names of types of business activities in respect of which the patent system can be applied taxation; an increase in the amount of potentially possible annual income for all types of activities in respect of which the patent taxation system is applied.

The patent taxation system has been operating in Moscow since 2013. This simple, convenient, flexible system allows you to work without an accountant, declarations and makes it possible to reduce the communication of individual entrepreneurs with tax authorities to once a year.

The volume of accumulated inflation since 2013 amounted to more than 66 percent. At the same time, the amount of potentially possible annual income during this time was increased only once – by 10 percent in 2017.

About 90 percent of all entrepreneurs applying the patent taxation system are employed in relatively highly profitable fields of activity, such as retail trade, rental, transportation of goods and passengers by road.

An increase in the potential for obtaining annual income for calculating tax under the patent taxation system will provide a fair tax burden.

A number of amendments proposed by the bill will bring Moscow legislation in line with the Tax Code of the Russian Federation and other federal laws.

In particular, the document will clarify the procedure for applying the zero percent profit tax rate when implementing special investment contracts for the development of serial production of industrial products. The project will eliminate duplicate norms regarding the procedure for paying tax on property of organizations.

EDITOR’S NOTE: This article is a translation. Apologies should the grammar and or sentence structure not be perfect.

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