8 Jun 2022 10:59

Large Russian cos with foreign owners seek to qualify for tech industry tax breaks - media

MOSCOW. June 8 (Interfax) - Large companies with foreign shareholders have asked the Russian government to support changes to the criteria for inclusion in the registry of domestic software, under which developers must be more than 50% owned by Russian individuals or entities, RBC reported, citing a letter they sent to the authorities.

The letter was sent by Ozon , Avito, Cian, HeadHunter , Tinkoff and Vimpelcom (Beeline brand), which were founded in Russia but subsequently their principal shareholders became entities based abroad.

In order to receive the preferences approved for information technology companies, the software developed by the company must be included in the registry of Russian software. In order to get on the registry, the owner of the software must be more than 50% directly or indirectly owned by Russian individuals or entities.

"For a number of Russian companies that are leaders of the digital economy, do business not only in Russia and thanks to their successful development attracted substantial foreign investors, this requirement [for 50% Russian ownership] is blocking," the letter cited by RBC said. The authors of the letter noted that their services are "used by most citizens of Russia."

Digital Development Minister Maksut Shadayev said earlier that he believes this criterion should be changed because there are many Russian companies that are less than 50% owned by Russian citizens, but Russian citizens essentially control their operations.

The Digital Development Ministry believes that systemically important companies in the Russian IT sector should be able to include their products in the registry of domestic software and take advantage of the tax breaks. RBC reported the ministry as saying that, if this proposal is supported by the market, it will draft the relevant changes to legislation. The list of companies deemed systemically important will be compiled after the changes are made.