Russian Economy General News: #9

miketheterrible wrote:Well, Russia is pretty much top 5 anyway. Unless Germany increased a lot too.

higurashihougi wrote:

Revolution 4.0, I believe

Many of my work colleagues constantly mention about the so-called 4.0 technology revolution nowadays, and believed that the Western World is leading the 4.0. But on my opinion it is Russia and China who are doing the job.

From January 1, foreign companies are obliged to pay "tax on Google" in the Russian Federation on b2b transactions
Prior to this, the obligation to pay VAT in the provision of electronic services lay with foreign companies only in the b2c segment

MOSCOW, January 1. / TASS /. Foreign organizations that provide electronic services in the b2b segment are now required to register for tax and independently pay VAT in Russia. The relevant changes to the Tax Code entered into force on January 1, 2019.

Prior to this, the obligation to pay VAT in the framework of the provision of electronic services (known as “Google tax”) lay on foreign companies only in transactions with individuals (b2c). Now, the requirement for a foreign company to pay VAT when rendering electronic services also applies to transactions with Russian organizations and individual entrepreneurs.

Innovation can complicate the lives of a large number of foreign companies in Russia, says Arseny Seyidov, a partner of Baker McKenzie. According to him, Russian legislation does not take into account the experience of foreign countries and the peculiarities of multinational corporations. "For example, in the field of e-commerce, it is a widespread practice when the services are provided by one company and the remuneration is received by a different (treasury) company of the group. Russian b2b buyers may not receive a tax deduction in such circumstances, since according to the current legislation, the supplier services and the recipient of funds must be one and the same person ", - he explains.

Even if within a foreign corporation there is no such functional separation by company, there may be another obstacle. Seyidov notes that the policy of many foreign corporations does not imply a full-fledged tax registration of the supplier of electronic services on the b2b market in every country where business is conducted. "A number of companies may consider that the share of revenue attributable to Russia is not large enough to make a decision on tax registration in Russia. And in this regard, they may decide to leave the Russian market," he said.

Partner Baker McKenzie also notes that the majority of foreign groups that allocate part of the global software costs (along with other headquarters expenses) to Russian subsidiaries are also subject to the new regime. “The business of such groups often has nothing to do with the provision of electronic services. However, without a Russian TIN of a foreign supplier, Russian people will not be able to accept VAT for the entire intra-group turnover, which will negatively affect their financial model,” Seyidov said.

Positions of foreign companies
\Large foreign corporations have already warned of future changes. "Due to changes in Russian tax regulation, which introduces VAT for digital services provided by foreign providers to commercial customers in Russia, from January 1, 2019, Microsoft Ireland Operations Limited (MIOL) will include VAT in bills," TASS reported in a press Microsoft service.

At the same time, the social network Facebook previously announced an update on taxation in Russia. “Starting from January 2019, Facebook advertising in Russia is subject to 20% VAT. This update will affect all advertising accounts for which Russia is listed as the country of the company,” the social network informed its users. At the same time, Facebook noted that VAT on the purchase of advertising on the social network will be charged regardless of the purpose of the purchase (commercial or personal).

The Google corporation, in whose honor the law was named, did not respond to the TASS request for plans of the company in the context of the changed legislation. The press service of Apple also did not provide the agency with any comment on this issue.

A law enters into force allowing the Central Bank to prevent the withdrawal of assets from insurance companies

The regulator has the right to make such decision if the company repeatedly violated the requirements of financial stability and solvency during the year.


MOSCOW, January 1. / TASS /. Amendments to the law on the organization of insurance business, which give the Bank of Russia the right to impose a ban or restriction on the execution of individual transactions by insurance companies, come into force on January 1.

The regulator has the right to make such a decision if the company repeatedly violated the requirements of financial stability and solvency during the year, did not fulfill the instructions of the Central Bank, presented unreliable information to the Central Bank, or by its actions created a threat to the rights and legitimate interests of citizens or a threat to market stability. Also, such actions may be grounds for revocation or suspension of the license.

The rule on the right of the Central Bank to prohibit and restrict the conduct of individual transactions is part of the package of changes in the legislation on the rehabilitation of insurance companies. The Central Bank said earlier that this provision would allow the regulator to prevent the withdrawal of assets from problem companies. The provisions of the law on the rehabilitation mechanism itself entered into force in the summer of 2018.

The law also defines a list of transactions that the Central Bank can prohibit or restrict. These are transactions related to the transfer of real estate for rent, pledge or as a contribution to the authorized capital of other organizations, obtaining loans, assignment of rights of claims on debt, forgiveness of debt, compensation and transactions with securities and derivative financial instruments. Restrictions or a ban on transactions are established by issuing a Central Bank instruction to the company for a period of up to three months with the possibility of renewal.

In addition, on January 1, a provision of law enters into force specifying the grounds for revoking a license from an insurance company. In particular, violation of the ratio of capital and liabilities by more than 20%, violation of requirements of the Central Bank for investment of insurance reserves, if non-compliant assets make up more than 20% of reserves, submission to the Central Bank of essentially inaccurate reporting, failure to comply with requirements for increase of the authorized capital, etc. The temporary administration of the insurer can also apply for the revocation of a license if it is impossible to restore its solvency.

The law defines additional grounds for restricting or suspending an insurer's license, and also establishes grounds for renewing a license after it has been restricted or suspended.

Austin wrote:Interesting Read


Professor Katasonov: What kind of breakthroughs and jerks is Putin talking about?


http://svpressa.ru/economy/article/220524/?utm_source=finobzor.ru

Kimppis wrote:To sum-up that opinion piece:

- Russia is not sovereign

K wrote:- Russia has no "national idea"

K wrote:- Russia should NOT prioritize (non-commodity) exports, it's a continent in itself, not a small country

K wrote:The Soviet Union was good. Stalin's industrialization was very good. The Soviet education system was the best in the world

miketheterrible wrote:
Russia ushers in ‘Google tax’ on New Year’s Day

More:
http://tass.com/economy/1038746

Nibiru wrote:^^^ So in short., Russia is Doomed and the West wins?

Austin wrote:"Sanctions can drive us into a situation more abruptly than in the 98th"

higurashihougi wrote:

And now we have Sergey Shoigu, Defense Minister from Tuvan people.