The Federal Law on amending Article 264 of the Tax Code of the Russian Federation, according to which enterprises can offset the costs for training skilled workers according to the dual education model to reduce taxable base for the calculation of income tax, was signed on July 18, 2017 by Russian President Vladimir Putin.
According to the document, training costs will not be subject to tax on income after January 1, 2018. Companies will have the right to classify as training costs their expenses incurred under agreements on network form of implementing training programs in accordance with the Federal Law “On Education”.
Such costs may include funds allocated by an enterprise for purchase of materials, maintenance of premises and equipment used for training, labor remuneration, the value of property transferred to support the educational process, and other expenses under training agreements.
Tax authorities will not take into account these costs, provided that, after completing a training program, at least one of the students concludes an employment contract with the company for a period of at least one year.
Previously, training programs were financed by an enterprise from the net income. These funds were subject to tax on income at the rate of 20%.
The bill on amending Article 264 of the Tax Code was prepared by the Agency for Strategic Initiatives (ASI), the Ministry of Finance, the Ministry of Education and Science, the Ministry of Industry and Trade, and other federal agencies, as well as by educational institutions and enterprises participating in the ASI’s project “Training of Skilled Workers Meeting the Requirements of High-Tech Industries on the Basis of Dual Education”. In particular, the Chelyabinsk Tube Rolling Plant Group spoke on the need for tax benefits for the development and popularization of a practice-oriented (dual) model of skilled workers’ training among employers.
“The annual expenses for training students under corporate educational programs of the ChTRP Group, implemented in the format of public-and-private partnership in the Sverdlovsk Region and the Republic of Tatarstan, amount to about 100 million rubles,” Svetlana Kuzminykh, ChTRP Group’s HR Director, reported. “The amendments made to the Tax Code will enable the company to save about 20 million rubles annually”.
Yulia Khanzhina, the Head of the Department for Support of Industrial Growth Staffing within the ASI’s “Young Professionals” direction, the adoption of the law will increase the attractiveness of the educational sector for business. “More employers will be interested in participating in the network form of implementing professional educational programs, aimed at training highly qualified workers with their further employment in the company,” Yulia Khanzhina noted.
The Federal bill “On Amending Article 264 of the Second Part of the Tax Code of the Russian Federation in order to Encourage Enterprises to Take Part in the Training of Highly Skilled Workers” has been developed as part of the fulfillment of the Action Plan to Increase Labor Productivity, Create and Modernize High-Performance Jobs, approved by Decree of the Government of the Russian Federation No. 1250-ð dated July 9, 2014.
The Bill provides for amending Paragraph 1 Subparagraph 23 and Article 264 Paragraph 3 of the Tax Code of the Russian Federation, according to which the training costs will also include the costs incurred by a taxpayer under agreements on network form of implementing educational programs, concluded with educational institutions in accordance with the Federal Law “On Education in the Russian Federation”.