Annual review of the participants of the SME Register

Dear Clients and Partners,

Please note that in July, the tax authorities conduct an annual review of the participants in the Register of small and medium-sized enterprises (hereinafter referred to as “the SME Register”) for compliance with the established criteria.

Participants of the SME Register among other benefits are entitled to apply the reduced social contributions rate – 15% instead of 30%.

Please note that companies with a predominant foreign participation will be able to avoid exclusion from the SME Register only if the auditor submits the information to the tax authorities from 1 to 5 July 2023.

To be included in the SME Register, a Russian company must meet the following criteria:

  • revenue does not exceed 2 billion rubles per year;
  • average annual number of employees is no more than 250.

At the same time, if a foreign company owns more than 49% of the Russian legal entity, this shareholder must also meet the described criteria and not be registered in an offshore zone.

Russian auditors are entitled to confirm that a foreign shareholder meets all the criteria and submit the required documents to the tax authorities. To do so, Russian companies should timely prepare the relevant documentation (including financial statements of the foreign shareholder for 2022) for submission to the auditor.

Mainstay consultants and auditors will gladly assist you with checking the possibility of entering the SME Register and/or verify the reporting of relevant foreign shareholders.