The procedure for applying tax benefits by IT companies has been clarified

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The Federal Tax Service has published explanations regarding the application of tax benefits by companies operating in the field of information technologies.

In accordance with the rules of Russian legislation, IT companies have the right to apply a reduced income tax rate if the company’s income from activities in the field of information technology is at least 90% of all income.

Therefore, the tax service indicates the following:

  • the services should be provided in relation to the software that was developed or adapted by the client company;
  • the client company should not necessarily be the copyright holder of the specified software;
  • the term “adaptation” refers to the introduction of changes aimed at the operation of a specific program on a specific technical device;
  • income may include income received from the work performed by the subcontractor.