A law has been signed making numerous changes to the Tax Code

Federal Law No. 389-FZ was signed today
"On amending Parts One and Two of the Tax Code of the Russian Federation, certain legislative acts of the Russian Federation, and on suspending the second paragraph of paragraph 1 of Article 78 of Part One of the Tax Code of the Russian Federation"

What changes as regards tax on the property of organisations?

1. The list of real estate on which the tax is calculated from cadastral value has been widened. The following kinds of immovable property have been added:

- apartment buildings,
- rental houses.

2. The rate on residential premises, garages and parking spaces, where the tax is calculated on cadastral value, has been reduced from 2% to 0.3%, if the following conditions are met:

- the immovable property referred to above is owned by a personal fund*,
- the cadastral value of that immovable property does not exceed RUB 300 million.

3. The deadline for filing the return for tax on the property of organisations has changed. This concerns assets on which the tax is calculated on average annual value. It was by 1 March. It is now by 10 February.

4. The conditions for ending the taxation of immovable property that has been "destroyed or has perished" have changed. This will now be done not only on an application by the taxpayer who holds the right, but also on the basis of information that the tax authority obtains for itself.

*In brief, on the personal fund as a way of arranging an inheritance.

The possibility of creating a personal fund appeared in Russia on 1 March 2022. Only 7 personal funds are registered in the Russian Federation at present. That indicates that the Russian courts do not yet have experience of deciding disputes about how personal funds operate.

A personal fund is a legal entity (a non-profit organisation) which manages property it has received into its ownership from its founder. The founder may be a single individual, or spouses who transfer their common property to the fund (a business as a whole, real estate, vehicles, securities and other assets).
The minimum value of the assets the founder transfers to the personal fund is RUB 100 million (determined on a market-value appraisal).

By means of a personal fund, the owner of capital will be able, after his or her death, to:

- protect the business and keep it stable,
- provide the heirs with regular and decent maintenance out of the property,
- reduce conflict and disputes involving the heirs,
- protect the property from claims by the heirs' creditors, and from claims by creditors of the owner of the capital, once 3 years have passed (5 years in exceptional cases) from the formation of the personal fund.

The changes set out above come into force on 1 January 2024.

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