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advertising revenues of IT companies. We note that earlier this year, the government decided to decrease the profit tax rate from the current 20% to 3% and the social security contribution from 14% to 7.6% for those IT companies which derive most of their revenues from the sale of software and software services. If these lower rates were also applied to the advertising revenues of IT companies, we think that both Yandex and Mail.ru would benefit. Other proposed measures include VAT deductions for Russian software sold in Russia through international platforms, the creation of a Russian marketplace for games and applications, and holding talks with China on easing access for Russian game developers to the Chinese market, among others.
9.1.8​ Telecoms sector news
The Russian State Commission for Radio Frequencies intends to deny subsidiaries of Rostelecom and MegaFon the use of 3.4-3.6 GHz frequencies for 5G testing​, according to the materials for the commission’s upcoming meeting on 23 November, Vedomosti reports. MegaFon and Rostelecom tested the 3.4-3.6 GHz frequency bands in 2017-18, but the testing zones were then shut down. Currently, the bulk of the 3.4-3.8 GHz range, which is the band of choice for 5G in most countries, is used for satellite communications, which are used by government agencies (including law enforcement), according to Vedomosti. Russian regulators proposed using the
113 ​RUSSIA Country Report​ December 2020 www.intellinews.com