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Analytical digest

Key tax changes in 2019. Tax amendments in 2018

In the publication, KPMG acknowledges that the year 2018 was fairly rich in terms of the number of innovations: an investment tax deduction for the profits tax was introduced; general provisions on special administrative regions — «Russian offshore zones» — came into force; the federal tax benefit for movable property was abolished.

Among other things, the authors comment on such changes as higher accessibility of the declarative procedure for a VAT refund, development of the «actual beneficiary of income» concept, clarification of the rules on controlled foreign corporations (CFC). Also, effective 1 January 2018, a new Customs Code of the Eurasian Economic Union (the EAEU Customs Code) came into force. The new EAEU Customs Code is innovative and significantly simplifies and expedites customs transactions.

The authors believe it is already clear today that we can expect no less and maybe even more far-reaching changes in 2019: a number of amendments to the Tax Code of the Russian Federation will come into force from 1 January 2019 — a higher VAT rate; a new procedure for imposing VAT on e-services; abolition of the tax on movable property; the introduction of a new «oil» tax — tax on additional income from hydrocarbon production (additional income tax — AIT), and many others. Also, starting from 1 January 2019, Russian regions lose the right to set reduced profits tax rates, new rules are introduced for calculating the property tax if the cadastral value has been contested, and the majority of Russian domestic transactions will be exempt from transfer pricing control.

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