Representatives of most Russian micro-businesses indicated they would not transition to the new automatic simplified taxation system, AUTS, which Russia planned to launch on January 1, 2023, according to RBC. A nationwide survey conducted by Aktion Accounting among more than 400 small firms from across the country revealed that 39 percent of respondents found it unprofitable to switch to AUSN because the tax burden would be higher under AUTS. Under the AUTS regime, taxpayers can select their taxation object as either income or income reduced by expenses, but the rates are higher than those in the traditional simplified system, STS, standing at 8 percent and 20 percent respectively when compared with 6 percent and 15 percent in STS.
Thirteen percent of participants cited personal reasons for not moving to AUSN. Some did not trust the automated tax filing and reporting system due to perceived frequent errors. Others preferred to manage tax and duty payments independently, while a portion wanted to observe how the new regime would be implemented before committing. A segment expressed satisfaction with the current simplified tax setup and saw no compelling reason to switch.
Only 3 percent of micro businesses in the survey said they were ready to migrate, yet actual migrations occurred in only about 1 percent of companies.
The Russian government approved a pilot for the Automatic Simplified Taxation System, a simplified tax regime, with phased introduction in Moscow, Tatarstan, the Moscow region, and the Kaluga region. Early indicators suggest the transition pilot is planned to run for six years, guiding gradual adoption and assessment of the new framework across the selected regions. attributed to official program trials and regional implementation plans observed by industry observers. The broader implication is that the move to AUTS may unfold slowly, with businesses weighing the perceived costs and operational flexibility against potential long-term simplifications in administration.