Changes in the digital industry: new support measures

The Ministry of Digital Development has prepared proposals for new measures to support the IT industry, including zeroing the «Google tax», benefits for the gaming industry, social networks and messengers, as well as allowing alcohol advertising in online cinemas.

The Ministry must submit a draft to the government by November 20. The documents show that the project includes 88 measures for 12 market segments.

In addition to the already announced exemption of Russian IT companies from VAT on advertising services abroad, it is proposed to abolish currency controls for the IT sector and hold intergovernmental negotiations to facilitate Russian game developers' access to the Chinese market.

Among other measures, the Ministry wants to introduce a VAT deduction when licensing software by foreign users (the so-called «Google tax»), if the software is included in the register.

In addition, it is proposed to create a Russian app store for games. And the threshold for payments to copyright holders of games with a foreign license is planned to be increased from 30% to 70%.

To support online cinemas, it is suggested to reduce the VAT rate to 10% on subscriptions to them, legislate an «anti-piracy Memorandum» and allow advertising of medicines and alcohol in online services and on TV.

But other ministries object to some of the changes.