How to get tax breaks for IT companies?

Table of content:

• What are the benefits for IT companies?
• How do I get income and premium benefits?
• How to get VAT exemptions?

On July 31, 2021, Federal Law No.265 on "Tax maneuver in the IT industry" was adopted, according to which companies working in the IT sector can count on relief in terms of paying tax contributions on income and insurance. In parallel with this, Federal Law No.265 contains a number of specific criteria for the sale of software (software) and restrictions on the provision of services in the field of software development without paying taxes. Let's figure out what benefits IT companies can count on and how they can be obtained.

What are the benefits for IT companies?

In total, there are 3 types of "concessions":

1. The decrease in the size of insurance premiums - up to 7.6%, applies to absolutely all employees of the company working in the field of software development.
2. Decrease in the amount of income tax - up to 3% for organizations that have chosen the general taxation system.
3. Exemption from VAT - can be applied to companies that will add their developments to the register of Russian software.

How can official Russian software developers get the coveted benefits?

First of all, in order to count on tax relief from the state, the company must be accredited by the Ministry of Digitalization (Digital Development) of Russia and add its developments to the unified register of software for computers and databases.

Also, the company must meet the following 3 requirements:

1. More than 90% of the income should come from the sale of software. Moreover, over the past 9 months. If the IT enterprise was formed recently, then the accounts for the past 3 months (last quarter) are taken into account.
2. The list of employees includes 7 or more people in the last 9 months or 3 months (for new companies).
3. To count on VAT exemptions, the company's software must be included in the codes from the list, which is spelled out in Appendix-1 to the manual of the Russian software register.

Now let's take a closer look at how IT companies can get the benefits described above. from the state.

How do I get income and premium benefits?

In order to count on tax relief from the state as part of contributions to the insurance fund and payment of taxes on corporate income, the company's management must draw up and submit to the Ministry of Digital Development of the Russian Federation 2 of the following documents:

1. Application for state accreditation. Previously, it could only be submitted in paper form, now also in electronic form.
2. Certificate signed by the company executives stating that the organization works in the field of software development. 

Both documents must be drawn up together with an experienced notary, after which they must be sent to the Ministry (by courier service, by mail or in person). Addresses in specific regions are registered on the official website of the Ministry at the link . All applications will be reviewed by employees of the state institution within 1 working day (previously there was a period of up to 30 days). The period for issuing an extract from the register was also significantly reduced, and in case of refusal of accreditation, the corresponding decision. Now it is also one working day instead of five.

How to get VAT exemptions?

To obtain these benefits, you cannot do 100% without the help of a competent lawyer. So, the management of an IT company will have to fulfill the following 3 points:

1. Register a personal account in the ESIA (in fact, the same State services). If the accounting department of the company submitted reports from the LLC, the account in the ESIA is already registered.
2. Have an electronic digital signature (EDS) for signing a document.
3. Draw up and send a statement that the company's software is registered in the Russian register. This application must be taken from the registry website, where you also need to have a personal account. In addition to all the necessary data that the system will indicate, this application will have to attach a list of documentation: the company's charter, technical documents for software, as well as documents confirming the ownership of specific software.

The list of additional documents for point 3 can be much longer. In any case, you must first study points 14 and 15 on the official web site of the RF software register (reestr.minsvyaz.ru). The decision to register and grant benefits in this case will be considered within 20 days from the date of acceptance of the documents.

In the wake of the coronavirus pandemic, many IT employees have moved to work from home. They do not visit offices, and their bosses only require them to submit finished projects. That is, in fact, their work is more consistent with the activities of self-employed or individual entrepreneurs. And the state is pushing to this scheme of work the same IT companies that hire "remote workers", offering them the above-described benefits. This is beneficial to all sides of the business.

The A4 Law firm's team of lawyers will help you with obtaining tax benefits for income and VAT, find options to reduce the amount of insurance payments and advise on any issues related to taxation for IT companies.