Shopping centers in Russia asked to reduce taxes and liability
Shopping centers (SCs) wanted the same preferences that marketplaces have. This was reported “News” with reference to the appeal of the Union of Shopping Centers of Russia, Belarus and Kazakhstan to the Russian ministries of industry and trade, finance and economic development.
It says that marketplaces have preferences that allow them to save on tax and operational costs. They also bear a completely different responsibility for the products sold on their sites than in classic offline retail. As a result, marketplaces have acquired a competitive advantage over traditional networks.
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They are asking to correct the situation by reducing the property tax rate for shopping centers and introducing a preferential VAT rate (or its complete abolition), as well as equalizing working conditions for the self-employed. According to the vice-president of the Union of Shopping Centers, Pavel Lyulin, consumers increasingly prefer marketplaces that sell goods cheaper to classic retail. This is the result of non-competitive conditions.
The Ministry of Industry and Trade admitted that there are certain problems with taxation in the trade sector. They hope that some of these issues will be resolved by the federal law regulating the activities of marketplaces. The Ministry of Economic Development also agrees that online trading needs better regulation.
In turn, the head of the Association of Retail Market Experts, Andrei Karpov, called the conversation about tax breaks for shopping centers irrelevant. Marketplaces do not receive any special benefits. Therefore, the request for relief for shopping centers seems fair only from a formal point of view.
President of Opora Russia Alexander Kalinin agreed that shopping centers are losing to marketplaces in an unfair and unequal struggle. First, the property tax that all shopping centers pay is increasing. Secondly, there are costs for utilities and anti-terrorism security measures. Shopping centers will not be able to compensate for all these expenses by increasing prices.
The head of the Public Consumer Initiative, Oleg Pavlov, also spoke about unequal conditions, calling for a systematic increase in taxes on increasingly popular online platforms.
In mid-May 2024, the president of the Union of Shopping Centers of Russia (STC), Bulat Shakirov, complained that offline trade was subject to “competitive pressure” from marketplaces and needed a three-year VAT zeroing out. In response to this, the president of the Association of Internet Trading Companies, Artem Sokolov, said that sellers working on marketplaces themselves declare their taxes, and online platforms pay them on the services provided.
Russian Prime Minister Mikhail Mishustin admitted that there are many questions about online platforms, but the work of such platforms needs to be carefully regulated. He recalled that the Federal Antimonopoly Service already has the power to combat abuses that the owners of marketplaces that dominate the market can indulge in.
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