Russian senators are exploring the possibility of developing national tax legislation for giant global internet companies, like Facebook and Google, after new laws that will make them establish physical presences in the country.
That’s according to Senator Alexey Pushkov, who revealed on Friday that the Federation Council Commission on Information Policy and Cooperation with the Media is looking at the best way to tax foreign websites.
Speaking to the TASS news agency, Pushkov explained that Russia is going to develop national legislation while waiting for the Organisation for Economic Co-operation and Development (OECD) to finalize its new international tax convention.
“As things stand, internet platforms are not treated in our country right now as a separate object of taxation,” he said.
Legislation adopted earlier this year means that foreign internet businesses must open branches or legal entities in Russia, due to come into force in January. The new rules were imposed after foreign-based social networks ignored court orders and fines regarding breaches of Russian law and faced no consequences. With a base in the country, Moscow hopes that the global internet companies will be more accountable to legislation and will also pay tax on profits made from Russian users.
“More than 90% of the revenues these companies make in Russia are from advertising. We are perfectly capable of calculating the advertising that our companies put on certain internet platforms,” Pushkov continued, noting, however, that the proposal for changing legislation is still at a very early phase.
This isn’t the first time Pushkov has attempted to modernize how Russia taxes online income. Earlier this year, he proposed introducing a tax on streamers who receive donations from their viewers, noting that donations in Russia are not taxed, which could be seen as a form of tax evasion.