Plan To Free Small Businesses From Tax Burden Poses More Questions Than Answers

Today, Russia's Budget and Taxation Committee recommended the approval of a bill that encourages smaller businesses to engage in innovative activity.

Deputies propose making earnings from the sale of goods and services exempt from both Profit Tax and VAT. This new bill will benefit only those companies who use new technology and techniques created by small and mid-sized businesses. Companies will  be able to take advantage of this offer for up to five years.

It is difficult to predict how such a program will work in practice. After all, companies can use various technologies in production. It is still not clear whether the use of one innovative technology will be enough to qualify a company for the benefits or if the company must  exclusively utilize  their own inventions.