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Draft Bills Under Consideration In The State Duma


Specific Labor Regulations for Remote Employees

Russia’s Labor Code will be updated with a chapter on remote employees. These employees are those that work outside their employer’s location and interact with the employer via the Internet. Responsibilities and rights of the employees and employers are to be implemented as follows:

  • Sides may enter into a labor agreement, and the employee may present documents necessary for job placement via exchange of electronic documents certified by an enhanced, certified electronic signature.
  • An employee applying for a job for the first time must first obtain a mandatory pension insurance certificate; documenting employment in employee's work record book is not necessary, unless specifically prescribed by the labor agreement.
  • Procedures for vacation leave will be determined by the labor agreement.
  • The labor agreement may include additional grounds for dismissal.

Transport Tax On Luxury Cars

Government suggests using two multiplier indexes for transportation tax in relation to luxury cars starting in 2014:

  • Multiplier of 2 - for cars with an average cost of 5-10 million rubles, not more than 5 years old;
  • Multiplier of 3 - for cars not more than 10 years old with an average cost of 10-15 million rubles, and for cars not more than 20 years old with an average cost exceeding 15 million rubles.

Changing Dividend Tax Rates for Tax Residents

Dividends issued from Russian companies and received by Russian companies or Russian citizens (who are tax residents) are currently liable for personal income tax and profit tax at rates of 9%. The authors of the draft bill see this discounted rate as an infringement on the principles of universality and equality of taxation, as well as a source of "an unjustified tax benefit." This is due to the fact that sometimes companies replace a portion of labor payments (subject to PIT at 13% and insurance payments at the rate up to 34%) with dividends payments. Therefore, the authors suggest increasing dividends tax rates (for both PIT and profit tax) to 13%.

Code of Administrative Court Procedures Introduced

Administrative cases are cases related to complaints against the actions (or failure to act), and/or issuances and resolutions of government authorities or their officials. These will be reviewed by courts according to special procedures. Here are the particulars:

  • Due to lack of equality of the parties involved, the court will have to play a more active role. For example, the court will be able to order disclosure of evidence which exceeds the bounds of the asserted claims.
  • Some cases will be tried by a panel of judges.
  • Persons without higher legal education will be obligated to have a legal representative. In certain categories of cases the legal help will be provided free of charge.
  • As with arbitration and civil litigation, the draft includes provisions for simplified trial procedures.

There is no suggestion to create independent administrative courts and therefore administrative cases will be considered, as is currently, by other jurisdictional courts (constitutional courts, arbitration courts, general jurisdiction courts, etc.)

Limiting Cost Markup for First Priority Goods

State Duma deputies suggested establishing a maximum cost markup for socially important staple goods at the rate of 15% of the price of the primary sale. Currently, there is no other method to regulate prices for these goods except to impose price freezes in times of sharp increases. However, these measures are necessary since, in times of crisis, prices are determined not only by objective economic factors, but also by speculation. One example of this is the spike in grain prices after the crop failure that occurred due to extremely hot weather in the summer of 2010. Taking into consideration international practices, in many countries prices for first priority goods are strictly controlled by the government during the entire sales process.

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