MONITORING CHANGES IN LEGISLATION FOR THE PERIOD FROM 01.11.2024 TO 30.11.2024

1. New legislation regulating investment activities in the Russian Federation

- Requirements for the qualifications and testing system of investors operating in the securities market are being reduced
On November 23, 2024, amendments were made to the legislation on the securities market, which will come into force on May 23, 2025.
Requirements for the level of special knowledge of an individual client are being reduced.
Firstly, the list of cases has been expanded when testing of an individual client who is not a qualified investor giving an instruction to execute a transaction is not required.
Secondly, even if the testing of an individual client gives a negative result, the broker has the right to execute his instruction if he has notified him of all the risks of the transaction and at least a year has passed since the notification (indication of inappropriateness will no longer be required), the client has accepted the risks in writing, while the amount of transactions does not exceed 300 thousand rubles. (at the moment, this amount is 100 thousand rubles).
Thirdly, the refusal of an individual client to undergo testing will no longer be grounds for the broker to refuse to execute his instructions.
Basis: Federal Law of November 23, 2024 No. 390-FZ "On Amendments to Certain Legislative Acts of the Russian Federation"

- The mechanism for implementing the agreement on the protection and support of capital investments has been adjusted
On November 30, 2024, amendments were made to the current legislation regulating the protection and promotion of capital investments, which will come into force on July 1, 2025.
New concepts of "the main object of the investment project" and "measures of direct state support" have been introduced.
Measures of state support for investment projects carried out within the framework of the agreement on the protection and support of capital investments also exist in the current version (these include tax deductions and reimbursement of costs in the form of subsidies).
The amendments being introduced concern the introduction of direct state support measures, which will be provided in the form of subsidies for financial support (reimbursement) of costs in connection with the reconstruction and modernization of the main object of the investment project, objects of supporting or accompanying infrastructure.
In this case, the main object of the investment project will be understood as a real estate object that is not an object of supporting or accompanying infrastructure, the results of intellectual activity and equivalent means of individualization necessary for the implementation of activities within the framework of the investment project;
An important change is that the already existing state support measures will not be provided to Russian legal entities in whose capital the share of direct or indirect participation of foreign legal entities (including those registered offshore) exceeds 25%.
A direct ban has been established on the resolution of disputes arising from agreements on the protection and support of capital investments in arbitration (arbitration court).
Basis: Federal Law of November 30, 2024 No. 441-FZ "On Amendments to the Federal Law "On the Protection and Promotion of Capital Investments in the Russian Federation"

- Changes have occurred in the legal regulation of the activities of mutual investment funds
Changes have been made to the legislation regulating the activities of investment funds.
Additional guarantees of investor rights are established. From the moment these changes come into force (from May 23, 2025), an insurance organization that carries out trust management of a closed-end mutual investment fund, the investment units of which are intended for qualified investors, is obliged to acquire the said investment units if it is impossible to redeem them.

In this case, even in the event of the redemption of such units, the insurance company does not acquire voting rights at the general meeting of owners of investment units of the closed-end mutual investment fund.
The cases of redemption of investment units without the owner of the investment units filing a demand for their redemption have been clarified.
Basis: Federal Law of November 30, 2024 No. 441-FZ "On Amendments to the Federal Law "On the Protection and Promotion of Capital Investments in the Russian Federation"

- The conditions that investment program projects must meet to make decisions on their approval have been clarified
The Government of the Russian Federation has adjusted a number of acts on issues of approving investment programs of electric power industry entities. Information that is not disclosed by electric power industry entities includes information on the implementation of investment projects aimed at implementing decisions of senior officials (operational headquarters) of the constituent entities of the Russian Federation adopted in connection with the introduction of martial law in new regions and the establishment of a special regime in border areas.
The list of investment projects that do not relate to investment program projects that provide for measures to build (install) power transmission lines and substations with a design voltage class of 110 kV and higher within the Unified Energy System of Russia (35 kV and higher within isolated territorial electric power systems), and (or) measures to reconstruct (modernize, technically re-equip) such facilities has been supplemented. Basis: Resolution of the Government of the Russian Federation of November 11, 2024 No. 1521 "On Amendments to Certain Acts of the Government of the Russian Federation on Approval of Investment Programs of Electric Power Industry Entities"

2. Clarifications of Federal Executive Bodies of Federal Legislation

- Features of Establishing the Tax Rate for the Income Tax of an Organization That Is a Party to a SPIC
The Tax Policy Department of the Ministry of Finance of Russia explained the procedure for reducing the tax rate for taxpayers - SPIC participants on the income tax of organizations in terms of transfer to the budgets of constituent entities of the Russian Federation.

The right of constituent entities of the Russian Federation to reduce the tax rate for the income tax of organizations subject to transfer to regional budgets for organizations that have concluded a SPIC arises provided that the Russian Federation is not the other party to this SPIC. In this case, for the purposes of the legislation on taxes and fees, a taxpayer - participant in a SPIC is recognized as a person who is a party to a SPIC concluded in accordance with Federal Law No. 488-FZ, if the other party to this contract is the Russian Federation.
Consequently, organizations that have received the status of a participant in a SPIC concluded without the participation of the Russian Federation are not recognized for the purposes of the Tax Code of the Russian Federation as a taxpayer - participant in a SPIC, in this regard, the provisions of Article 284.9 of the Tax Code of the Russian Federation do not apply to this category of taxpayers.
Basis: Letter of the Tax Policy Department of the Ministry of Finance of Russia dated November 5, 2024 No. 03-03-06/1/108389

- Grounds for applying a 15% income tax rate by a personal fund

A personal fund applies a 15% income tax rate if, for the reporting (tax) period, certain types of income account for more than 90% of the total income taken into account when determining the tax base.
Interim income on shares of mutual investment funds is not included in the specified share.
Basis: Letter of the Tax Policy Department of the Ministry of Finance of Russia dated November 5, 2024 No. 03-03-07/108474 On the application of the provisions of Article 284.12 of the Tax Code of the Russian Federation when receiving interim income on shares of mutual investment funds

- Losses from the implementation of unfinished investment projects can be attributed to expenses
The Tax Policy Department of the Ministry of Finance of Russia explained that justified expenses are understood to mean economically justified costs, the assessment of which is expressed in monetary form. Any costs are recognized as expenses, provided that they are incurred for the implementation of activities aimed at generating income.

In this case, the validity of expenses should be assessed taking into account the circumstances indicating the taxpayer's intention to obtain an economic effect as a result of real entrepreneurial or other economic activity.
Therefore, there is no reason to take into account, when reducing the tax base for income tax, the costs of organizations that are not related to the taxpayer's activities for which income was received (planned to be received).
It was noted that the increasing frequency of judicial qualification of refusal to further implement investment projects as "business errors of the taxpayer", refusal to qualify the specified costs as justified, are erroneous, since losses from the implementation of unfinished investment projects are taken into account by the taxpayer in expenses for the purposes of taxation by corporate income tax.
Basis: Letter of the Tax Policy Department of the Ministry of Finance of Russia dated November 14, 2024 No. 03-03-06/1/112753

3. Regulatory initiatives in the field of investment activities

- It is planned to change the reporting forms in relation to the property, expenses and income of investment funds
The Central Bank of Russia plans to adjust the procedure for submitting reports of a specialized depository. 2 new forms will be introduced:
0420876 "Report on the increase (decrease) in the value of property owned by a joint-stock investment fund (constituting a mutual investment fund)»;

0420877 «Report on remuneration and expenses related to the trust management of property constituting the assets of a joint-stock investment fund (constituting a mutual investment fund)».
Basis: Draft Bank of Russia Instruction «On Amendments to Bank of Russia Instruction dated September 27, 2022 No. 6270-U»

4. Other innovations in Russian legislation

4.1. In the sphere of foreign economic activity:

- Licensing rules in the sphere of foreign trade in goods have been approved
The licensing rules in the sphere of foreign trade in goods approved by the Government of the Russian Federation determine the procedure for issuing general, one-time and exclusive licenses for the export and (or) import of goods for which non-tariff regulation measures have been introduced unilaterally, when exported within tariff quotas, as well as licenses in automatic mode for products included in the single list of goods to which non-tariff regulation measures are applied in trade with third countries.
The forms of applications and licenses, instructions for their execution, rules for suspension, renewal and termination of licenses are provided.
Basis: Resolution of the Government of the Russian Federation of November 18, 2024 No. 1577 "On approval of the Licensing Rules in the Sphere of Foreign Trade in Goods"

4.2. In the field of land law
- New rules for assessing the impact of planned activities on the environment
New rules for assessing the impact of planned (proposed) economic and other activities on the environment come into force on March 1, 2025.
The assessment will be carried out by the person responsible for preparing the documentation for the planned activity, including submitting such documentation for environmental assessment.
The impact assessment studies, preparation of preliminary assessment materials, sending a notice to the authorities about holding public discussions, holding discussions, and preparing final assessment materials are provided.
Basis: Resolution of the Government of the Russian Federation of November 28, 2024 No. 1644 "On the procedure for conducting an environmental impact assessment"

- Change in the validity period of the decision on preliminary approval of the provision of state and municipal lands
Amendments have been adopted to the Land Code of the Russian Federation on the provision of plots in state or municipal ownership.
The validity period of the decision on preliminary approval of the provision of a plot is reduced and will be 1 year. A period of 2 years is left for the sites to be formed, in case of the need to change the type of permitted use and transfer from one category to another.
The validity period of decisions made before the amendments come into force is 2 years.
Basis: Federal Law of November 30, 2024 No. 447-FZ "On Amending Article 39.15 of the Land Code of the Russian Federation" (comes into force on December 11, 2024)

5. New in the legislation of the Republic of Tatarstan

- The procedure for the formation and development of a feedback mechanism with business and investment entities in Tatarstan has been approved
On November 23, 2024, the procedure for the formation and development of a feedback mechanism with business and investment entities (applicants) in the Republic of Tatarstan was approved. Its development became the next stage in the implementation of the Regional Investment Standard developed by the Ministry of Economic Development of Russia.
In particular, the deadlines and sequence of actions of the performers processing requests within the framework of the feedback mechanism with applicants have been established; the regulations for the functioning of the Unified Center for Processing Requests; feedback channels; the procedure and deadlines for considering requests; methods and forms for identifying the satisfaction of applicants with the response received to the request.
The following have been established as feedback channels: the portal of state and municipal services of the Republic of Tatarstan, the information resource "Investment Portal of the Republic of Tatarstan", as well as the information resource "Investment Map of the Russian Federation".
Requests on issues in the field of entrepreneurial and (or) investment activities that do not require study of documents are considered within 5 calendar days; requests requiring actions by the performer to resolve them - up to 10 calendar days.
Basis: Resolution of the Cabinet of Ministers of the Republic of Tatarstan dated November 23, 2024 No. 1045 "On approval of the Procedure for the formation and development of a feedback mechanism with entities engaged in entrepreneurial and investment activities in the Republic of Tatarstan".