Changes in IT Laws: 5 Innovations for Developers and AI

Contents:

• Who is eligible for tax breaks from the Federal Tax Service for IT companies?
• The obligation of foreign IT companies to open representative offices in Russia: what does this mean?
• Possible consequences for foreign IT companies
• From April 1, 2021, the sale of gadgets without Russian software is prohibited: fines from July
• Roskomnadzor initiates innovations: passport data when registering on social networks
• Unified rules for artificial intelligence in the CIS: new horizons

Who is Eligible for Tax Benefits from the Federal Tax Service for IT Companies?

Since 2021, new tax incentives for IT companies have been in effect in Russia, allowing them to reduce income taxes from 20% to 3%. This initiative is aimed at supporting the domestic IT sector, creating favorable conditions for its development, and stimulating the growth of high technology in the country. The introduction of such tax incentives helps attract investment in the IT industry and improve the competitiveness of Russian companies on the international stage.

Not every company can take advantage of this benefit. To receive it, at least 90% of revenue must come from the sale of IT services. This condition is strictly regulated by the Federal Tax Service (FTS). The Federal Tax Service's clarifications of February 20 and March 1, 2021, clarified that software selection consultations are not considered IT services. Therefore, it is important for companies to consider these requirements when planning their tax strategies and business models to avoid potential issues with tax authorities.

Software technical support is an important component of IT services. For the precise classification of this service, it is recommended to contact the Ministry of Digital Development. This will help avoid misunderstandings and potential problems with tax authorities. A proper understanding and formalization of technical support will ensure compliance with the law and improve the effectiveness of customer interactions.

Lawyer Alla Bitarova of Delcredere emphasizes that to qualify for the preferential rate, companies must carefully analyze their income. Article 284 of the Tax Code of the Russian Federation specifies the types of services that can be included within the 90% criterion. However, many companies face ambiguities in the application of these rules, which can complicate the process of tax optimization. Correct interpretation of these provisions and careful verification of income compliance with the article's requirements will help companies make the most of the benefits.

In real-world practice, IT companies often face a variety of situations that require an individual approach. It is important to carefully plan tax liabilities and be prepared for possible audits by tax authorities. Companies should consider the specifics of their activities and develop strategies for effective tax management in advance. This will not only help avoid fines but also optimize financial expenses.

Many large companies have begun the process of restructuring their businesses to obtain tax benefits. In particular, they are creating separate legal entities for their IT departments to meet the established criteria. Examples of such companies include VimpelCom, MTS, Russian Post, and Rosatom. This practice is expected to become the standard for other organizations seeking to optimize their tax liabilities and improve management efficiency.

Foreign IT companies are required to open representative offices in Russia: what does this mean?

Foreign IT companies operating in Russia will face important changes. By order of the president, the government must develop a "digital residency" concept for companies with an audience of 100,000 to 500,000 users in the country by August 1, 2021. This requires mandatory registration of legal entities in Russia and payment of taxes. These measures are aimed at creating a more transparent and legal environment for international digital companies, which, in turn, can facilitate the development of domestic IT infrastructure and attract investment in this sector.

According to Kommersant, the new "digital residency" system will begin operating in 2021. This measure is aimed at supporting the IT industry and is currently being approved by the administration of Deputy Prime Minister Dmitry Chernyshenko. The introduction of digital residency will simplify access to various services for IT companies and startups, facilitating the development of the digital economy in the country.

A comparison with international practices shows that this measure is in line with global trends. For example, Turkey recently required Facebook to open an office in Istanbul in accordance with local legislation. This indicates that the Russian initiative is likely to be implemented. Foreign companies with a large audience in Russia will have to seek additional resources to manage their digital residency, which may impact their strategy for operating in the Russian market.

Simplifying interactions between government agencies and foreign companies significantly speeds up the resolution of claims arising from authorities or private individuals. This facilitates access to the necessary data and resources, which, in turn, contributes to more effective management and conflict resolution.

Lawyer Alla Bitarova from the Delcredere company believes that the initiative to introduce "digital residency" in Russia will have an impact on major players such as Google, Facebook, Booking, Amazon and Zoom, whose products are popular among Russian users. The adoption of this legislation will force foreign companies to more carefully consider entering the Russian market and adapt their business models to new requirements. This may lead to changes in operating conditions and increased competition in the digital sector.

Possible consequences for foreign IT companies

The implementation of the concept of "digital residency" has a significant impact on foreign IT companies. One of the main consequences is the increased costs associated with registering and administering a representative office in Russia. Furthermore, foreign companies will be required to comply with Russian regulations and standards, which could create additional operational complexities. These changes require companies to adapt to new conditions and regulations, which could impact their business processes and market entry strategies. The Russian initiative could not only strengthen government control over foreign companies but also transform their business strategies in the Russian market. This change could lead to a new understanding of operating conditions in the country and adaptation to local legal requirements. As a result, foreign companies will be forced to reconsider their business models and seek new ways to successfully integrate into the Russian economy.

From April 1, 2021, the sale of gadgets without Russian software is prohibited: fines from July

From April 1, 2021, a law came into force in Russia that requires the sale of electronic devices with pre-installed Russian software. This rule applies to gadgets such as smartphones, tablets, computers, and televisions, and is spelled out in paragraph 4.1 of Article 4 of the Law "On Protection of Consumer Rights." From July 1, 2021, sellers who fail to comply with this requirement may face fines of 200,000 rubles. The introduction of this law is aimed at supporting domestic software and providing users with the necessary tools.

The main goal of this law is to support domestic software developers. The official list of mandatory applications approved by the government includes popular products such as Yandex Browser, Yandex Maps, applications from Mail.ru Group, Kaspersky Lab, and Gosuslugi. This will provide users with access to local services and enhance the security of their data. Support for domestic software not only promotes technological development within the country but also creates a competitive environment for improving service quality.

Currently, the mandatory list of pre-installed applications includes popular services such as VKontakte, IVI, OKKO, and ICQ. This list is planned to be expanded in the near future, which will create additional opportunities for Russian developers and allow them to occupy a more significant market share. This opens up new prospects for the growth and development of domestic applications, stimulating competition and improving the quality of services.

According to a survey conducted by ESET, 29% of users expressed a desire to remove pre-installed applications. Many respondents encountered difficulties when trying to get rid of unwanted software. This raises important questions about users' right to choose and the quality of pre-installed services. The issue of removing pre-installed applications calls into question users' freedom of choice and their ability to customize their devices. It is important that manufacturers take user opinions into account and offer more flexible solutions for managing installed software.

Lawyer Anastasia Dudko from Delcredere noted that the new rules are aimed at protecting consumer rights and supporting domestic manufacturers. However, it is important to take user opinions into account. This highlights the need to find a balance between government support for software and consumers' right to free choice. Taking into account the interests of all parties will create a fairer and more efficient system that will promote the development of both the software market and the needs of end users.

Significant changes in digital technologies will come into force in Russia on April 1, 2021, which may impact the market and consumer behavior. It is important to follow the latest news, as the law and its implementation continue to evolve, which may lead to new trends and opportunities in the technology sector. Stay informed about changes to adapt to new conditions and take advantage of the benefits they may offer.

Roskomnadzor initiates innovations: passport data when registering on social networks

On March 23, 2023, Roskomnadzor presented a draft order that introduces new rules for user registration on social networks and instant messengers. The main changes concern consent to the processing of personal data, which has caused a significant public outcry. Public discussion of this project will last until April 19. These changes may affect the use of platforms and the protection of users' personal information, making this initiative relevant for everyone who actively uses social media and instant messaging apps.

Immediately after information about the new order appeared, many perceived it as a mandatory requirement for registering on social networks using passport information. However, at present, such an obligation has not yet been introduced.

Users will still be able to register on social networks without having to provide passport information. Roskomnadzor offers an alternative registration option - through a special service. In this case, you will need to provide passport information or log in through the Gosuslugi platform. This innovation is aimed at improving security and compliance with legislation on user data protection.

The new service allows users to centrally manage all consents to the processing of personal data through a single personal account. This eliminates the need to log into each social network or messenger separately, significantly simplifying the process of managing personal information. With this tool, you can quickly and easily configure privacy settings, ensuring the security of your data online.

Registration through this service is voluntary. This gives each user the opportunity to independently choose whether to use Roskomnadzor's functions to control their personal data. This approach provides users with freedom of choice and the ability to manage their information.

Lawyer Anastasia Dudko from Delcredere comments on the relevance of the security issue of the new consent aggregator. She emphasizes that the draft order lacks specific measures to protect the created database, which raises certain concerns among specialists. Data security is critically important, and the lack of clear recommendations for its protection can lead to risks for users and organizations.

Upcoming changes to social media registration rules create new opportunities for users, while raising important questions about the security of their data. It's important to monitor the situation and actively participate in the discussion to express your opinion. Privacy protection is becoming a pressing issue, and users need to be informed about the new rules and their implications. By participating in the dialogue, you can help shape a safer and more user-friendly online space.

Unified Rules for Artificial Intelligence in the CIS: New Horizons

A significant event took place at the recent meeting of the Standing Committee on Science and Education of the CIS Interparliamentary Assembly: participants discussed the need to develop unified rules for regulating artificial intelligence. This initiative aims to create a safer and more predictable digital space, which is especially important in the context of rapid technological development. Establishing common standards will ensure the efficiency and safety of artificial intelligence in the CIS countries and will increase user confidence in new technologies.

Lawyer Alla Bitarova of Delcredere emphasizes the importance of regulating artificial intelligence at the supranational level. She argues that such regulation is necessary to take into account the diverse aspects and practices existing in different countries. This will ensure the harmonization of rules and standards, which, in turn, will help avoid legal conflicts and improve the safety of using artificial intelligence technologies. Supranational initiatives in this area can promote innovation and the creation of ethical norms, which are key factors for sustainable progress in AI.

The relevance of this initiative is confirmed by global trends in technology regulation. In 2020, the European Union developed a strategy that defines the legal framework for the use of artificial intelligence. The fundamental principle of this strategy is that human control over technology remains vested in humans. This emphasizes the importance of an ethical approach to the implementation and use of AI, which helps minimize risks and ensure user safety. As technology rapidly develops, it is essential to monitor its impact on society and take measures to protect human rights.

The project is currently in the announcement stage, and it is difficult to estimate how long it will take to develop the new rules. It is also unclear how stringent these rules will be and how they will impact technological progress in the region. The implementation of new regulations is expected to significantly impact the development of innovation and the business environment, which requires careful analysis and discussion.

The creation of unified rules for artificial intelligence in the CIS countries could be an important step toward harmonizing approaches to technology at the regional level. This will ensure the safe and ethical use of artificial intelligence and help countries adapt to a rapidly changing technological environment. The implementation of uniform standards will minimize risks and increase trust in AI among users and businesses.