Page 142 - RusRPTMay21

9.1.7 TMT sector news
Russian firms are looking to benefit from new measures to support domestic IT by spinning off their tech divisions to tap into tax cuts. VimpelCom, MTS, Russian Post, Sberbank, and Rosatom have all done so.
By creating separate legal entities, the spun-off software outfits can become accredited by Russia’s digital ministry as IT firms. Those that receive 90% of their revenues from software sales enjoy large tax breaks: starting January 1, corporate income tax declined from 20% to 3%, and social security contributions dropped from 14% to 7.6%.
Meanwhile, how the government defines a domestic IT firm is up for debate. Currently, Russian law uses the term “Russian producer” to refer to domestic tech companies. Yet some want to shift the focus from production to intellectual property (IP) by changing the terminology to “Russian developer.” The shift would mean that software produced abroad could fall within the criteria for Russian tech sector tax breaks if the underlying IP belongs to a Russian company. On the other hand, firms that produce software in Russia but for which the IP belongs to a foreign company would not be eligible.
The proposal was floated by the expert council of the Duma’s committee for developing Russia’s radio-electronic industry. This is unsurprising: much of the software used in the base stations of Russia’s cellular communications towers is produced by foreign developers using Russian IP. Firms from Russia's radio-electronics industry thus want to be included in the tech sector tax breaks.
Netflix has debuted in signing a contract for series by Russian producers with the first deal made with Gazprom-Media studio 1–2–3 Production for an Anna Karenina version, business daily Kommersant reported on Monday. Market sources told the daily Netflix wants to produce series for Russia and is negotiating four to five projects with the local producers.. The second project will be a dramatic story unfolding in the country in the 1990s. Till now, Netflix has not ordered local production and purchased the already made series. The streaming service started offering content in Russian in late 2020 through a partnership with local media holding company National Media Group (NMG), whose unit Entertaining Online Service acts as the platform’s operator in the country, collects payments from subscribers and dubs content.
State employees in much of Eastern Europe will be banned from buying Zoom video conferencing technology under new rules from the American company’s regional distributor, as Washington mulls a series of new sanctions against Russia, RT reports. Moscow daily Kommersant reported on Wednesday that it had obtained a letter from RightConf, the company charged with licensing and selling Zoom’s technology for Russia and members of the
142 RUSSIA Country Report May 2021 www.intellinews.com