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Putin signs law on zero income tax rate for IT industry

The law implies preferential income tax rates and reduced insurance premium rates

MOSCOW, July 14. /TASS/. Russian President Vladimir Putin signed a law that expands the use of benefits for the IT industry. It implies preferential income tax rates (0% until December 31, 2024) and reduced insurance premium rates. The document was published on the official portal of legal information on Thursday.

A zero percent income tax and 7.6% insurance premium rates will apply to companies that receive income from services for the development, implementation and support of any Russian software, from the sale of online advertising on their platforms, from placing ads on classifieds (Avito, and so on), providing paid access to content, including by subscription, providing educational services using online platforms, developing and selling Russian software and hardware systems.

Sites that allow participating in the public procurement procedure, intermediaries providing services related to real estate transactions, companies providing financial, banking and securities market services, companies providing goods labeling services, as well as communication services are not eligible to claim benefits.

Earlier, Deputy Finance Minister Alexey Sazanov explained that these provisions of the law are aimed at ensuring a balanced approach between the development of the IT industry and the income of entities. Under the law, organizations such as IT departments of banks, individual highly profitable companies (Yandex Taxi and Yandex Delivery), taxi ordering and food delivery services cannot apply income tax and insurance benefits, because "the margins of these businesses are already quite high.".