Small businesses to write off taxes for the second quarter

2024 Author: James Gerald | [email protected]. Last modified: 2023-12-17 14:00

On 11 May 2020, the latest news reported on an expanded meeting to focus on mitigating high-alert measures. In a video message from the President of Russia to a multimillion audience, there was also a sensational message that small businesses will be deducted from taxes for the second quarter.

What the President was talking about

The expanded meeting was dedicated to the development of a strategy for a gradual exit from the regime of restrictions and the economic crisis, which occurred not only in the Russian Federation due to the coronavirus pandemic. The introduction of long weekends and a high alert mode saved many lives.

Russia, being in 4th place in terms of the number of infected, ranks second in positive ratings:

• by the number of infections per million population;
• for a low mortality rate.

In his traditional address, the President of the country voiced many cardinal measures taken to alleviate the difficult financial situation of business structures and the socially unprotected words of the population. He noted that the second quarter was a particularly difficult test for small and medium-sized businesses due to the restrictions imposed.

Therefore, it was decided that the tax deferral was insufficient. After all, they will still have to be paid sooner or later. One and a half million entrepreneurs a year of the coronavirus pandemic will simply be written off taxes, without subsequently requiring them to be paid.

Earlier, the government, within the framework of the program to facilitate the passage of the strict restriction regime, has already introduced deferrals of six months for the payment of insurance premiums and tax payments. Due to the dangerous epidemiological situation, the country's leadership was forced to extend the already long weekend. Therefore, a simple deferral of payments in industries affected by the coronavirus is no longer enough at this point.

The head of the country said that small businesses will not just be postponed payments that are beyond their strength due to the lack of activity. In those industries that have been affected by the coronavirus, small and medium-sized businesses and even individual entrepreneurs without employees will write off contributions to insurance funds and all taxes except value added tax for the second quarter of 2020.

What else is known about the support measures taken

The RBC news agency, which broadcasted the president's extended speech ahead of the meeting, provided several interviews from the heads of professional associations. They noted the positive role of the adopted decision in removing the tax burden from business structures.

Some of them considered such measures insufficient, but it is worth focusing on the fact that taxes for the second quarter will write off 1.5 million entrepreneurs working in different categories:

• small business (with a limited number of employees);
• individual entrepreneurship, that is, those who work on their own;
• micro-enterprises (medium-sized businesses);
• socially oriented NGOs.

On a national scale, such a shortfall in tax payments can seriously affect the state of the state treasury. However, this measure has been announced and will provide significant assistance to those who suffered during the pandemic from the lack of demand for the industry (tourism, hotel and hotel, entertainment, catering and others listed in the decree on deferring taxes and insurance premiums).

There are some unclear points in this process. For example, will the state return to entrepreneurs taxes already paid in the second quarter, or transfer them to the third. But all this will become clear after the relevant decrees come into effect.

On May 11, it was announced about other initiatives aimed at supporting Russian business, socially unprotected segments of the population:

1. Self-employed citizens will not only be refunded taxes paid on profits in 2019, but also will receive a tax bonus in the amount of the federal minimum wage, which will help to cope with difficulties in making mandatory payments to the state.
2. The government will provide entrepreneurs with a loan to pay off wage obligations, which will pay off in full instead of the debtor, if he manages to retain 90% of the staff, and half - if at least 80% of employees remain.
3. For families with children, different types of payments are planned: monthly and one-time. It depends on the child's age, social status and family income per capita.

According to the latest news of 2020, it became known that small businesses will be deducted from taxes for the second quarter. This measure will allow many entrepreneurs to stay afloat and keep working.

Summarize

1. The Russian government announced additional measures to support small and medium-sized businesses.
2. A full write-off of taxes (excluding VAT) for the second quarter of 2020 is coming.
3. An unprecedented solution will allow more than 1.5 million enterprises to stay afloat.
4. It will cover several categories and will extend to industries affected by the pandemic.
5. This decision will allow business to recover faster during the period of gradual easing of quarantine.