Russia

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Tax Policy

TAX POLICY

Income Tax Rate 9-35%

Corporate Tax Rate 20%

Sales Tax / VAT Rate 18%

Income tax rates

There are three income tax rates for tax residents in the Russian Federation - 9%, 13%, 35%. Both income received in the Russian Federation and received abroad is subject to the income tax. The most commonly used rate is 13%. This rate, for example, is applied to income from employment or income from the sale of property (a car, for example). Tax rates are flat and do not change with the income amount.

For those who are not tax residents, there are two tax rates - 15% for dividends and 30% for all other types of income. Only income received in the Russian Federation (as opposed to income received abroad) is subject to the income tax.

Corporate Tax

The tax on company profits is made up of 2 rates:

-       Federal tax - -2%.

-       Regional tax - 18% (with a possible incentive reduction of up to 4.5%).

The maximum profit tax is 20%.

Capital Gains (for a corporation)

The standard rate of tax for a corporation is identical to the tax on its regular income.

Sale of certain Russian shares bought after 1.1.2011 and held for more than five years are tax exempt.

A capital loss on the sale of a fixed asset may be offset against income in the following years. The offset is spread over the remaining useful life of the asset that has been sold.

There is no cost inflation adjustment for capital gains.

Reporting Dates and Payment

The tax year in the Russian Federation is the year ending on December 31.

Advance payments of income tax are made as specified below:

-                      An Individual - An individual whose income is only from a wage is not obligated to file an annual return. The employer deducts tax from the employee and transfers it to the Tax Authority every month.

  • An individual who is self-employed is obligated to make 3 advance payments: on July 15, August 15 and November 15.
  • A self-employed individual must file a return by the end of the month of April following the end of the tax year.
  • The balance of the tax due, after filing the annual return, is to be paid by July 15

-            A Limited Company - It is compulsory for a limited company to submit the financial statements by March 30.

  • During the course of the year, the company is obligated to made advance payments on a monthly basis.
  • These prepayments are based on the profit in the previous quarter.
  • Small businesses are not obliged to make advance payments.
  • Fines are imposed on the submission of returns after the date prescribed.

Property Tax

This local tax is imposed on movable and immovable fixed assets, according to their depreciated book value.

The maximum tax rate is 2.2%.

Land is exempt from property tax.

Value Added Tax

In most cases, VAT is 18%.

There are reduced rates of VAT of 10% that refers mainly to children's products and food products.

VAT is charged on assets and services in the Russian Federation as well as on imports into the Russian Federation.

Medications and medical products and technological products are exempt from VAT on being imported.

Exports are not subject to VAT.

Income from medications and medical services as well as income from insurance and banking services is exempt from VAT.

VAT returns are made once a month, if the VAT payable is over RUR 2 million; the payment is made up until the 20th day after the current month.

When the VAT payable is less than RUR 2 million, the return is made quarterly, and not monthly.
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Sources: http://www.nalogia.ru/
http://www.bridgewest.eu/