A bill designed to upgrade a patent for small business submitted to the State Duma

12th March 2014

In particular, the restriction of minimum potential income for some types of entrepreneurial activities can be eliminated

A draft law to improve special tax regime – patent system of taxation was submitted to the State Duma for consideration.

The document proposes to extend the powers of the subjects of the Russian Federation to establish the size of the potentially possible annual income that can be obtained by individual entrepreneur by types of entrepreneurial activities in respect of which the patent system of taxation is used (hereinafter - the potential income). In particular, it is proposed to provide them with the opportunity to differentiate potential income depending on the place of doing business.

The authors of the draft remind that conditions for doing business in a large city may differ significantly from those in other localities and that is why the annual income of the entrepreneur in the big city and in a small town varies greatly. Thus, the establishment of equal potential income for all territories of the federal subject implies an increase in the tax burden on businesses that operates in prosperous areas of the region.

In addition, the document provides for the opportunity to establish the size of the potential income, depending on the load-carrying capacity and the number of seats in vehicles when providing transportation services for passengers and cargo.

The draft also proposes to eliminate the limitation of the minimum size of the potential income by types of entrepreneurial activities in respect of which the patent system of taxation is used. Under current legislation the minimum size it is 100 thousand rubles.

The proposed amendments allow distributing the tax burden on small businesses more evenly, increase the attractiveness of the patent system, and make it more flexible and accessible. At the local level, the positive effect of the law adoption is expected in the form of strengthening the revenue base of local budgets.

In case of adoption of the draft law, changes will take effect from January 1, 2014.


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