Coding for textile has not yet started
Mandatory coding of textiles, including clothing, was to start on December 1, 2019. However, the government decree, which starts the process, was not approved by this date. Moreover, the draft document received a negative assessment by the experts of the Ministry of Economic Development. This means that the resolution will have to be reviewed.
Retail store owners were worried. Not only because of the introduction of coding, but also because of the risk of losing the right to special tax treatment in the form of imputed income tax. After all, it is known that it is not allowed to trade coded goods under the imputation tax system. And there was uncertainty about what to do with inventories, with clothes that have already been purchased but not sold.
The decision on coding in the textile industry are being reviewed.
There is no reason to panic. First, it is necessary to monitor when the decision on the textile products coding will be officially adopted. The document can be reviewed here: Draft government resolution on the rules of mandatory coding of light industry goods.
By the way, the Project already has questions. Thus, in the conclusion by the Ministry of Economic Development (dated 29.11.2019) it is noted that in the current form the resolution contains unclear terms, excessive requirements, duties and prohibitions. All this leads to restrictions in business activities, unreasonable expenses of both legal entities as well as citizens, and budgets at all levels of the Russian Federation.
Also, the experts of the Ministry of Energy noted that the Project has two more groups of products than what is provided for by the order of the government No. 792-R dated 28.04.2018 on the introduction of textile coding. Order No. 792-R did not plan to code working clothes and bed linen (there were no OKPD (Russian Classificator of Products) codes for these commodity groups in the government's order).
Mandatory coding of light industry goods
Previous coding campaigns have shown that it takes up to six months or more from the start of the process to the introduction of a ban on the circulation of unmarked products. And in the case of textiles, this trend has been confirmed. Thus, the start of coding was scheduled for December 1, 2019, and the ban on the sale of unmarked textiles was planned to be introduced from July 1, 2020. This means that before the ban, trading could be continued as before, but by the date of its introduction, all unsold goods would have to be marked.
We recommend to estimate the volume of unsold product balances. To understand how much time and money would be required to comply with the legislation requirements at the time when the coding is introduced. And it will certainly be introduced, this has been repeatedly expressed by experts of the CRPT.
Trading of coded goods under imputation taxation
The ban on the use of a special regime in the form of a single tax on imputed income does not yet apply to all goods subject to coding. Trade under imputation taxation cannot be only for drugs, fur products and shoes. Such explanations were issued by the Russian Ministry of Finance (letter of the Ministry dated 31.05.2019 no. 03-11-06/3/39855). Clothing and other light industry products have not yet been affected by restrictions.
The decision on coding in the textile industry are being reviewed.
There is no reason to panic. First, it is necessary to monitor when the decision on the textile products coding will be officially adopted. The document can be reviewed here: Draft government resolution on the rules of mandatory coding of light industry goods.
By the way, the Project already has questions. Thus, in the conclusion by the Ministry of Economic Development (dated 29.11.2019) it is noted that in the current form the resolution contains unclear terms, excessive requirements, duties and prohibitions. All this leads to restrictions in business activities, unreasonable expenses of both legal entities as well as citizens, and budgets at all levels of the Russian Federation.
Also, the experts of the Ministry of Energy noted that the Project has two more groups of products than what is provided for by the order of the government No. 792-R dated 28.04.2018 on the introduction of textile coding. Order No. 792-R did not plan to code working clothes and bed linen (there were no OKPD (Russian Classificator of Products) codes for these commodity groups in the government's order).
Mandatory coding of light industry goods
Previous coding campaigns have shown that it takes up to six months or more from the start of the process to the introduction of a ban on the circulation of unmarked products. And in the case of textiles, this trend has been confirmed. Thus, the start of coding was scheduled for December 1, 2019, and the ban on the sale of unmarked textiles was planned to be introduced from July 1, 2020. This means that before the ban, trading could be continued as before, but by the date of its introduction, all unsold goods would have to be marked.
We recommend to estimate the volume of unsold product balances. To understand how much time and money would be required to comply with the legislation requirements at the time when the coding is introduced. And it will certainly be introduced, this has been repeatedly expressed by experts of the CRPT.
Trading of coded goods under imputation taxation
The ban on the use of a special regime in the form of a single tax on imputed income does not yet apply to all goods subject to coding. Trade under imputation taxation cannot be only for drugs, fur products and shoes. Such explanations were issued by the Russian Ministry of Finance (letter of the Ministry dated 31.05.2019 no. 03-11-06/3/39855). Clothing and other light industry products have not yet been affected by restrictions.
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