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Tax Incentives for IT Companies

Industry incentives for corporate profit tax, insurance contributions and VAT depend on accreditation, the product's entry in the Russian Software Register and the share of income from IT, and entitlement to them is confirmed by the company's indicators.

We are most often instructed by:

  • Accredited IT companies
  • Rights holders of software in the Russian Software Register
  • Companies for which IT is only one of several lines of business
  • Groups in which one company creates the product and another sells it

The information on this website is provided for information purposes only and does not constitute a public offer.

What the Service Includes

Timing and Fees
–timing on request
from ₽fee on request

Timing and fees are indicative and are confirmed when the engagement is agreed.

01 / Overview
Which incentives apply

The status of an accredited IT company does not in itself confer the right to an incentive, and not all income related to software products is included in the calculation of the share of income.

The set of applicable incentives depends on the company's tax regime, the nature of its contracts with customers and how the product is made available to users. In a group of companies, the conditions apply to each company separately, on the basis of its own income and contracts.

Tax issues beyond the industry incentives, including disputes with the tax authority, fall within the Tax practice: “Tax Incentives and Investment Regimes” and “Tax Audits and Disputes”.

02 / Outcome
Service Outcome
  • List of applicable incentivesThe incentives available to the company, with the conditions for applying each of them.
  • Calculation of the share of incomeA calculation of the share of income from IT activities, with the documents on which it is based.
  • Contracts and primary documentsVersions that reflect the nature of the services and the rights transferred.

The outcome of the service is the work performed within the scope agreed with the client.

03 / Projects
Selected Projects
01 / 04

Purchase of a group of companies

Purchase of a producer of digital solutions for equipment management and monitoring

Challenge

Advising the buyer on the acquisition of shares in a foreign company that owns a Russian manufacturer of industrial equipment and digital solutions for equipment management and monitoring. The acquisition of the foreign company was governed by English law.

What was done

Comprehensive legal due diligence of the Russian business was carried out, covering its contractual relationships and intellectual property rights, and the foreign ownership structure was analysed. The findings were reflected in the terms of the transaction and the arrangements for its closing.

Purchase of an interest

Purchase of an interest in an app developer with an audience of more than 1.5 million users a week

Challenge

Advising the buyer on the acquisition of an interest in a company developing a healthy lifestyle app. The app's weekly audience exceeded 1.5 million users worldwide.

What was done

Comprehensive legal due diligence was carried out, covering business operations, corporate history, intellectual property rights, employment relationships and the legal risks material to the transaction. The findings were reflected in the structuring of the transaction and the preparation of the contractual documentation.

Investment transaction

Investment in a developer of 3D interior design solutions

Challenge

Advising on an investment transaction involving a company that develops 3D interior design solutions. The structure provided for the grant of an option right to the investor.

What was done

The project's founder was given the possibility of buying this right back before the investor exercised it. The terms of such a buy-back and the consequences of changes to the parties' arrangements on future equity participation were agreed.

Convertible loan

Convertible loan for a company developing an educational course platform

Challenge

Advising on an investment in a company developing a platform that aggregates educational courses, made by way of a convertible loan.

What was done

The terms of the financing and of the investor's future entry into the company's capital were determined, including the conversion parameters and the consequences of different scenarios for the transaction. The engagement covered agreeing the documents and the procedures required to implement the transaction.

04 / Questions
Frequently Asked Questions

It is checked which income is included in the calculation and whether it has been correctly classified. A discrepancy arises not only in the figures but also in contracts that describe the nature of the services differently from how they are actually provided.

The check is carried out before the end of the tax period: some discrepancies can only be remedied within the current period.

A reply and a set of documents confirming the share of income and the nature of the contracts are prepared. If discrepancies are identified during preparation, it is determined before the reply is sent which of them can be remedied by documents bearing the current date.

Not in every case: some issues are resolved by correcting contracts, primary documents and accounting records.

Changes in the allocation of functions are considered where the existing allocation prevents the incentives from being applied, and only where there is a business purpose; the consequences of each option are assessed before a decision is taken.

Past periods are reviewed: the share of income, the contracts and the accounting treatment. On that basis, discrepancies that can be remedied by documents bearing the current date are distinguished from those that entail recalculation.

An hourly rate, a fixed fee or a combined model is used; in some cases part of the fee depends on the outcome achieved. The fee is determined by the time actually spent, the complexity of the matter and the overall timeframe of the project, and is agreed before work begins.

Key Contacts
Deni Murdalov Deni Murdalov Partner, PhD (Law), LL.M. Ilya Smirnov Ilya Smirnov Partner

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Other Services in This Practice
Investments and Transactions Software Development Agreements Licence Agreements and Service Access Rights to Code Personal Data Website and App Documents Ministry Accreditation Russian Software Register Product Registration Documents and Consultations

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