Conclusions from judicial practice on the payment of the employee's working time

Conclusions from judicial practice on the payment of the employee's working time

As indicated by the courts of appeal and cassation (Resolution No. 88-15334/2022 of the Third Court of Cassation of General Jurisdiction dated September 05, 2022 in case No 2-52/2022), if an employee is forced to perform labor functions during a lunch break due to the inability to leave the workplace due to the peculiarities of the labor process, this time shall be recognized as working and shall be paid, regardless of whether the employer has officially established continuous production.


Specifics of the tax accounting of funds granted in accordance with the legislation on the protection of consumer rights

Specifics of the tax accounting of funds granted in accordance with the legislation on the protection of consumer rights

As follows from the conclusions set out in Letter No. 03-11-11/80779 of the Ministry of Finance of Russia dated August 18, 2022, in a number of cases, a legal entity is entitled to payments granted in accordance with consumer protection legislation, for example, when public associations of consumers (their associations, unions) or local governments act in protection of consumer rights, they have the right to give a fine in the amount of 50% of the unfulfilled requirement on the basis of Part 6, Article 13 of Law No. 2300-1 of the Russian Federation dated February 07, 1992 "On Protection of Consumer Rights"

According to the agency, in accordance with Clause 1, Article 346.15 of the Tax Code of the Russian Federation (hereinafter referred to as the Code), taxpayers applying the simplified taxation system (hereinafter referred to as the STS) shall take into account income determined in the manner established by Clauses 1 and 2, Article 248 of the Code when determining the object of taxation. According to Clause 1, Article 248 of the Code, income includes income from the sale of goods (works, services) and property rights and non-operating income, determined in accordance with Articles 249 and 250 of the Code. At the same time, the income specified in Article 251 of the Code is not taken into account. Due to the fact that the sums of money awarded by a court decision in favor of the plaintiff are not named in Article 251 of the Code, these funds shall be taken into account as non-operating income for tax purposes for tax paid in connection with the application of the STS.


The central bank of russia has published clarifications regarding the application of certain existing financial restrictions

The Central Bank of Russia has published clarifications regarding the application of certain existing financial restrictions

1) Banks do not have the right to conduct operations, the implementation of which must be carried out only with the permission of the Government Commission. If such permission exists, the Bank shall have information about its publication, or a copy

2) The current restrictions on transactions stipulated by the Decrees of the President, exceeding RUB 10 mln per calendar month or the equivalent in foreign currency, shall apply, among other things, to payment through a letter of credit.

3) The current restrictions do not prohibit non-residents from repaying debt and interest to residents under loan agreements

4) Residents have the right to issue foreign currency loans to non-residents, if the non-resident is not a person from the country committing unfriendly acts.

5) A resident's application for opening a type "C" account in the name of a non-resident may be submitted to any bank, and not only to the one in which the resident has an account.


Draft amendments to the federal law on foreign investments

Draft amendments to the Federal Law on Foreign Investments

Since August 17, the State Duma has been considering a draft law on amending the Federal Law "On Foreign Investments in the Russian Federation" and the Federal Law "On Protection of Competition". The main purpose of the draft law is to strengthen control over foreign investment.Read more


A new presidential decree has been published imposing additional restrictions on the corporate sector

A new Presidential Decree has been published imposing additional restrictions on the corporate sector

In accordance with Decree No. 618 of the President of the Russian Federation dated September 08, 2022 “On Special Procedure for the Implementation (Execution) of Certain Types of Transactions (Operations) Between Certain Persons”, a special procedure has been established between residents and non-residents from unfriendly countries for transactions (operations) entailing, directly and (or) indirectly, the establishment, change or termination of the rights of ownership, use and (or) disposal of shares in the authorized capital of limited liability companies (with the exception of credit institutions and non-bank financial institutions) or other rights that make it possible to determine the conditions for managing such limited liability companies’ liability and (or) conditions for their entrepreneurial activities. From September 08, 2022 such transactions may be carried out (executed) only on the basis of permits issued by the Government Commission for Control over Foreign Investments in the Russian Federation and, if necessary, containing conditions for the implementation (execution) of such transactions (operations). As an exception, only certain transactions with shares in the authorized capital of users of subsoil plots are defined.


The bank of russia has confirmed the prohibition on the dividends transfer in foreign currency on russian companies` shares to residents` foreign accounts

The Bank of Russia has confirmed the prohibition on the dividends transfer in foreign currency on Russian companies` shares to residents` foreign accounts

According to the conclusions from the Official Explanation of the Bank of Russia dated 05.09.2022 No. 9-OR, subparagraph "b" of paragraph 1 of Decree No. 430 prohibits residents from enlisting foreign currency received in the form of shares dividend of Russian joint-stock companies to accounts opened in banks and other financial market organizations located outside the territory of the Russian Federation. This prohibition extends both to enlisting foreign currency received in the form of Russian joint-stock companies shares dividend to residents` foreign accounts as a result of the subsequent transfer of such funds previously enlisted to the Russian credit institution account, and to enlisting such foreign currency directly to foreign accounts of residents, avoiding the Russian credit institution account. The authorized bank, as a currency control agent, in the case of transferring funds in a foreign currency by a resident from his accounts opened with this authorized bank to foreign banks accounts, must verify, on the basis of information provided by the resident, whether the transferred funds are dividends or not. The relevant information can be obtained by an authorized bank from a resident in any form.

If the specified funds are received as a result of shares dividend payment of Russian joint-stock companies, the authorized bank refuses to carry out such operation as contrary to the requirements of subparagraph "b" of paragraph 1 of Decree No. 430.


The ministry of finance explained the tax consequences of the property transfer under a work agreement

The Ministry of Finance explained the tax consequences of the property transfer under a work agreement

In a Letter from the Ministry of Finance of the Russian Federation dated 15.08.2022 No. 03-03-05/79557, the department reminded that for the organizations profit taxation purpose, by virtue of the standard of Article 689 of the Civil Code of the Russian Federation, the property receipt for free use is a gratuitous receipt of property right. When determining the taxation object for corporate income tax, income from the sale of goods (works, services) and property rights determined according to Article 249 of the Tax Code of the Russian Federation and non-operating income determined in accordance with Article 250 of the Tax Code of the Russian Federation are considered. Herewith, according to paragraph 8 of Article 250 of the Tax Code of the Russian Federation, taxpayer`s non-operating income is recognized, in particular, income in the form of gratuitously received property (works, services) or property rights.

At once, on the Ministry of Finance judgment, the property transfer to a contractor under an agreement for the relevant works implementation provided in the agreement cannot be considered for the corporate income tax purpose as a gratuitous transfer, since for the corporate income tax purposes, property (works, services) or property rights are considered to be received free of charge if the receipt of this property (works, services) or property rights is not associated with the recipient's obligation to transfer property (property rights) to the transferor (perform work for the transferor, provide services to the transferor) (paragraph 2 of Article 248 of the Tax Code of the Russian Federation).


Changes in std pfr and sd r forms are planned konsu

Changes in STD-PFR and SD-R forms are planned

The Ministry of Labor has prepared a draft order on approval of new forms of employment history. These updates are related to creation of the Pension and Social Insurance Fund, which should get started from 01.01.2023 on the basis of the merger of the PFR (Pension Fund of Russia) and the SIF (Social Insurance Fund).

In connection with these changes, the following new forms have been developed:

- The form of employment history provided to the employee by the employer (STD-R);

- The form of employment history provided using the information resources of the Pension and Social Insurance Fund of the Russian Federation (STD-SFR form),

as well as a new procedure for their completion.

If adopted, the order will enter into force on 01.01.2023.

Currently, an employee whose employment record is kept in electronic form can obtain his/her employment history from the employer in STD-R form or can obtain it in an MPSC (Multifunctional Public Services Center), in the PFR, or on the portal of government services in STD-PFR form.


From 11.01.2023, the rules will change for issuing electronic orders for revocation of powers of attorney konsu

From 11.01.2023, the rules will change for issuing electronic orders for revocation of powers of attorney

From 11.01.2023, Federal Law No. 339-FZ dated 14.07.2022 "On Amendments to Certain Legislative Acts of the Russian Federation" http://publication.pravo.gov.ru/Document/View/0001202207140102 changes the scope of the information that must be included in an electronic order on revocation of a power of attorney issued in simple written form. These orders are issued and sent through the applicant's personal account on the portal of the Federal Notary Chamber https://lk.notariat.ru/.

Changes in the information about the principal being a legal entity: in addition to the full company name, INN (Taxpayer Identification Number) or OGRN (Primary State Registration Number), e-mail address of the legal entity, it will be required to specify the full name and SNILS (Insurance Number of Individual Ledger Account) of the person acting on behalf of the legal entity without a power of attorney.

Changes in the information about the authorized person: if the authorized person is a legal entity, it will be required to specify its full company name, INN or OGRN.

Changes in the information about the power of attorney: if no exact date of issuance of the revoked power of attorney is specified, the period of its issuance must be specified.

Changes in the information about the applicant: if an electronic order is signed by a representative acting under a power of attorney, his full name, date of birth, series and number of identity card, INN, SNILS, and e-mail address must be additionally specified, and the power of attorney must be submitted in electronic form in machine-readable form and shall be issued in accordance with the requirements of Federal Law No. 63-FZ dated 06.04.2011 "On Electronic Signature".


Conclusions based on the court practice in respect of the method of notifying an employee in case of dismissal konsu

Conclusions based on the court practice in respect of the method of notifying an employee in case of his/her dismissal

It should be reminded that in cases provided for by Article 59 of the LC RF (Labor Code of the Russian Federation), it is allowed to execute a fixed-term employment contract with an employee. According to the provisions of Article 79 of the LC RF, a fixed-term employment contract is terminated upon expiry of the term of its validity. The employee must be warned in writing about termination of the employment contract due to the expiry of its term of validity at least three calendar days before dismissal, otherwise the employment contract will be extended and reclassified into a permanent one. According to the conclusions made in Ruling No. 88-10805/2022 of the 7th Court of Cassation of General Jurisdiction dated 19.07.2022, dismissal of an employee with whom a fixed-term employment contract has been executed is illegal if (s)he is notified of dismissal in any way other than in writing, including by notification via messenger, as in the situation in the framework of the dispute. In this dispute, the court reinstated the employee. At the same time, it remains unclear whether notification via messenger is permissible if this method is expressly provided in the employment contract.