essential changes in civil and tax legislation in russia

ESSENTIAL CHANGES IN CIVIL AND TAX LEGISLATION OF RUSSIA. EXPERT'S REVIEW.

St. Petersburg / Summer Seminar / Pavel AntonovSokos Hotel Palace Bridge, V.O. Birzhevoi Pereulok 2-4, 199004 St. Petersburgwww.accountor.ru

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Amendments are introduced to the Civil Code of the RF and other newsMost important changes in Russian legislation: - news on legal entities forms - other amendments to civil legislation - state registration of companies- LLCs- staff leasing- foreign branches and representative offices

accreditation- work permits, etc.

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General corporate law news

- Amendments are introduced to Chapter 4 of Part 1 of the Civil Code by the Federal Law of 05.05.14 No 99-FZ

- New rules on legal entities will come into effect on the 1st of September, 2014

- New structure of basic legal entities forms for doing business in Russia

+ Limited Liability Companies+ Non-public Joint Stock Companies+ Public Joint Stock Companies

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No restrictions with regard to obligatory re-registration of commercial corporations existing now On the other hand, it is obligatory to register the new Charter in compliance with the new law when the first amendment is approved

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PLEASE CHECK THE CHARTERS OF YOUR

PARTNERS CAREFULLY

more than one managing director of company (or combination of them) acting solely or jointly

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New rules on management in commercial corporations and new rights and obligations of their members

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New approach to approval of shareholders’ meeting minutes and written consents taken by limited liability companies and joint stock companies

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New provisions on liquidation and reorganization procedures

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New Corporate Agreement concept is introduced with respect to both limited liability companies and joint stock companies

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- New provisions on the company information to be reflected in the state register of legal entities

- Standard form of the charter can be used for registration of a corporation

- Obligatory annual audit for all joint stock companies

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News on state registration of companies and charters

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- Changes are introduced to the Federal Law on State registration of legal entities and individual entrepreneurs by the Federal Law of 05.05.14 No 107-FZ

- The law entered into force on 5th of May, 201+The representatives of the company can

make the filing and receive originals from registration only with a notarized power of attorney

+The applicant can sign the application form personally without notarization, provided he presents his passport

+The applicant can make a registration filing both in the registration tax authority and in multifunctional centre 

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- Changes are introduced to the Federal Law on Limited Liability Companies by the Federal Law of 05.05.14 No 129-FZ

- The law entered into force on 5th of May, 2014

+Every founder of a limited liability company is obliged to pay the full amount of its share in the charter capital within four months after the company’s registration

+Before the founder should pay at least the 1st half by the company’s registration and the balance within 1 year after registration

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New staff leasing rules

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Changes are introduced to the Labor Code of the Russian Federation by the Federal Law of 05.05.14 No 116-FZ- Staff leasing will be fully prohibited in the

territory of Russia from 1st of January, 2016. Provision of personnel is significantly restricted. It will be carried out by the new type of business structure – private labor agencies.

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Accreditation and functioning rules are set for such kind of agencies. The workers and employees hired through such agencies can be used in a limited list of sectors.  New law provides certain instruments focused on protection of the labour rights of workers and employees provided under a staff leasing contract. The new rules will not affect the outsourcing model used by customers now.

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Accreditation of foreign companies’ branches and representative offices

- Changes are introduced to a number of legislative acts of the Russian Federation by the Federal Law of 05.05.14 No 106-FZ

- Major provisions of this law enter into effect from 1st of January, 2015

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The new State Register of foreign companies’ branches and representative offices accredited in the territory of Russia is expected. The authority responsible for keeping this register has not been defined yet. However, the date by which the existing branches and representative offices should file the certain set of documents to be prolonged is fixed – 1st of April, 2015. If the package of documentation is not filed, the current accreditation will terminate from this date with regard to the branches and representatives office with accreditation expiring after 1st of April, 2015.

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Special rules are provided for existing accreditations which expire from 1st to 31st of January, 2015, and from 1st of February, 2015, to 1st of April, 2015. Further clarifications from the legislators and responsible authority concerning the new register, terms of accreditation and procedures are expected in 2014. The new rules are unlikely to affect the current accreditations of foreign banks and civil aviation companies.

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Work permits applicants to prove knowledge of Russian

Changes are introduced to the Federal Law on the legal status of foreigners in Russia by the Federal Law of 20.04.14 № 74-FZ

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The migrants applying for work or residence permit will have to prove their basic level of knowledge of the Russian language, history and law of the Russian Federation.

Some provisions of the new legislative act enter into force on 1st of September, 2014, the full document – on 1st of January, 2015.

Highly qualified specialists, men after 65 and women after 60 are discharged from obligation to provide one of the above mentioned documents.

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The required level of knowledge should be confirmed by one of the following instruments:- A special certificate proving the knowledge of

Russian and basics in history and laws. Such a certificate will be valid for 5 years. Procedures of its receipt will be defined by the Ministry of Education and Science later

- A diploma (or similar state document) issued in the territory of the former USSR before 1st of September, 1991

- A diploma (or similar state document) issued in the territory of Russia after 1st of September, 1991

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Simplifications of tax administration

Information is based on the Government

Decree of 10.02.14 No 162-r

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The Government of RF developed and confirmed the plan for simplification of tax administration implementation of which will take place in 2014 -2015 years. According to this plan some rules of accounting and taxation will be changed, the investment climate in Russia will improve.

Among the most interesting changes are the following:

Cancellation of business trip certificate (now this document is obligatory for justification of business trip costs)

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Prolongation of deadlines for submission of tax declarations: 5 business days more – for declarations in paper format, 10 business days more – for declarations in electronic format Publication of new formats of tax reporting 2 months beforehand the tax periods when new formats shall be used VAT-deductions based on facture-invoices referred to the finished tax period and received after it but before the deadline for VAT-reporting

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Prolongation of deadlines for submission of tax declarations: 5 business days more – for declarations in paper format, 10 business days more – for declarations in electronic format Publication of new formats of tax reporting 2 months beforehand the tax periods when new formats shall be used VAT-deductions based on facture-invoices referred to the finished tax period and received after it but before the deadline for VAT-reporting

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Issuance of consolidated facture-invoices by agents to principals

Obligatory tax-reporting in electronic format for companies which have in staff more than 50 employees

Recognition of costs regardless of minor errors in primary documents

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