business asked to reconsider the approach to calculating excess profit tax – Kommersant

Delovaya Rossiya asked the Ministry of Finance to work out a methodology for determining the tax base for calculating a one-time fee (windfall tax), reports Vedomosti. In particular, the organization asked to take into account the investments made by companies in the period 2018-2019. According to the publication, the Ministry of Finance opposes making adjustments.

Delovaya Rossiya announced its initiative in a letter sent to Deputy Finance Minister Alexei Sazanov on 10 May. The document clarifies that in the current wording of the draft law “On the tax on excess profits of past years”, not only organizations that receive additional profit due to favorable pricing conditions are subject to taxation. As Business Russia explained, organizations that spent more money in 2018-2019 than in 2021-2022 will have lower base period profits and higher amounts. Companies that have invested in earlier periods will have a higher profit margin for 2021-2022, but in both cases, organizations are forced to pay additional tax on normal rather than excess profits, the letter says.

In addition, Delovaya Rossiya said that when comparing financial results for 2021-2022 with the period 2018-2019, income related to objective economic growth over the past five years, including natural inflationary growth, will be taken into account. In this regard, Delovaya Rossiya proposes to define excess profits on the basis of more comparable periods – for example, as an excess of the indicator for 2022 over 2021 or as an excess of the arithmetic average profit for 2021-2022 over 2019-2020.

According to a Vedomosti source, the Ministry of Finance opposes adjusting the bill. However, the government’s position on this topic has not yet been expressed so clearly, and this issue will be discussed, the source said.

According to the plan of the authorities, the oil and gas, coal industries, small and medium-sized businesses and companies with pre-tax profits for 2021–2022 of less than 1 billion rubles will be exempt from windfall tax collection. The Ministry of Finance said that the fee could be paid in the amount of 5% in 2023 or 10% in 2024. The Russian authorities expect to receive about 300 billion rubles in this way. The Ministry of Finance asked the relevant departments to agree on the bill by May 10.

Details – in the material “Kommersant FM” “Windfall tax outlined the criteria.”

Laura Keffer