Min: IT cos can leave Russia if reduced payroll tax rate hiked up

MOSCOW, Apr 20 (PRIME) -- Russian IT companies can prefer other jurisdictions and specialists can quit the country if the government does not prolong reduced payroll tax rates for the industry, Communication and Mass Media Minister Nikolai Nikiforov said Wednesday at a ministry meeting.

“I would like to stress the ministry’s position once again: we insist that benefits on payroll contributions for IT companies would be extended,” Nikiforov said.

The reduced rate of the payroll tax for domestic IT companies, accredited by the ministry, is set at 14% until the end of 2017, while the standard tax rate is set at 30%. The beneficial rate was supposed to go up gradually to 21% in 2018, to 28% in 2019 and 30% in 2020.

“If we don’t keep the rates, the Russian jurisdiction would be hardly viewed as a competitive one for the IT business development. We will simply witness an exodus of Russian IT companies to other jurisdictions and an outflow of specialists,” Nikiforov said.

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