The bill amends Article 57 of Federal Law No. 212, of 24 July 2009, On Contributions to the Russian Federation’s Pension Fund, Social Security Fund and Compulsory Health Insurance Fund, in order to lower rates for companies involved in information technology (IT) from the year 2011 through 2019.

The proposed amendments include:

-          lowering the staff threshold from 30 to 7;

-          classifying as non-core assets a company’s profits resulting from the margin between official and actual exchange rates or revaluation of the company’s foreign-currency assets. Such profits cannot exceed 10% of the total, as this is inconsistent with supporting exports.

 If enacted, this legislation will reduce the revenues of state extra-budgetary funds. The resultant gap is to be covered by transfers from the federal budget.

 The draft law is expected to improve the business climate for IT companies operating in Russia, primarily small businesses, and create new, high-skilled jobs.

 The Russian Government considered and approved the draft at a 30 October meeting this year.