Tax Compliance

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An Overview of Tax Compliances in Russia

Russia has moderate flat or regressive tax rates. For a federal state, it is highly centralized. It relies highly on revenues from oil and natural gas corporations. Taxation in Russia was governed by the Russian Tax Code. The first part regulates the relationship among taxpayers, the second part prescribes the tax rates, tax payments, etc. Rules and rates of regional and local taxation must be as prescribed in the code. Violation of the provisions is deemed illegal and void.

Types of Taxes in Russia

  1. Personal income tax

This tax is paid by individuals that is: tax residents and non-residents of the Russian Federation. Individuals are subject to tax on the income expressed by them either in money or in kind. Personal income is taxed at the rate of 13% and reduced by an amount of tax deductions. Tax deductions are not applicable to personal income taxed at other rates. The tax rates applicable to residents are 9%, 13%, and 35% whereas the tax rates applicable to non-residents are 15% and 30%.

  1. Value Added Tax (VAT)

VAT is paid by legal entities and individual entrepreneurs on the sale of goods, works, and services or on the transfer of property rights. The taxable period is a quarter of the year and the tax rate is 0%, 10%, and 18% depending upon the type of goods and operations. The tax must be paid for the expired tax period on or before the 20th day of each of the three months following the expired tax period. The tax return should also be filed on or before the 20th day of the month succeeding the expired quarter of a year.

  1. Excises

This tax is paid by legal entities, individual entrepreneurs, and individuals who carry goods across the Russian Federation’s national boundaries. This tax is charged on the sale of excisable goods such as ethyl(cognac) spirits, alcoholic beverages, tobacco products, etc. The tax rate is different for each excisable goods. The tax payment should be made on or before the 20th day of the month following the reporting period. However, for legal entities that are in possession of certificates, the tax must be paid on or before the 25th day of the third month following the expired tax period.

  1. Individual Property Tax

This tax is paid by individuals who are owners of the property that is recognized as taxable objects. The tax rate is determined by the legislative acts of representative bodies of municipal government and depends on the integrated inventory value of the object of taxation. The tax amount is assessed by the tax authorities based on the data provided by the cadastral and registry federal authority and by surveying companies that maintain technical building records. The due date of payment is determined by the laws of the subjects of the Russian Federation. The due date is should not be later than the 1st day of November succeeding the expired tax period.

  1. Corporate Property Tax

Corporate Property Tax is paid by businesses in possession of property objects identified as taxable objects. The tax base is the annual average value of the property. The taxable period is a calendar year and the reporting period is the first quarter, half year, and nine months of the calendar year. The tax rate is established by the law of the subjects of the Russian Federation and it cannot exceed 2.2% of the taxable value. Filing of tax returns is done at the end of the tax period.

  1. Transport Tax

This tax is paid by legal entities and individuals in possession of registered transport. The tax is imposed on transport vehicles registered and established by law. Further, the tax base depends upon the type of transport vehicle. The tax period is the calendar year and the tax rate is established by the laws of the subjects of the Russian Federation. Tax returns should be filed by legal entities on or before the 1st of February of the year following the expired tax period.

  1. Water Tax

Water tax is paid by legal entities and individuals for using water bodies. The tax rate is determined separately for each water body depending on the watershed of rivers, lakes, and seas. It should be paid on or before the 20th day of the month succeeding the expired period. Tax returns should be filed on or before the 20th day of the month succeeding the expired period.

  1. Profit Tax

Profit tax is paid by Russian businesses and non-resident businesses that operate in the Russian Federation through permanent establishments and gain income from sources located in the Russian Federation. The reporting period is the first, second, and third quarters. The taxable period is the calendar year. The tax return should be submitted to the tax authorities not later than 28 calendar days from the relevant reporting period. An annual return must be filed with the tax authorities no later than the 28th day of March of the year succeeding the expired tax period.

  1. Mineral Extraction Tax

This tax is paid by organizations and entrepreneurs recognized as users of subsoil. Tax is levied on the extracted commercial minerals. The tax period is a calendar month and the tax is to be paid on or before the 25th day of the month succeeding the expired tax period. The tax return shall not be filed before the last day of the month following the expired tax period.

  1. Gambling Tax

Gambling tax is paid by legal entities on the gaming table, gambling machine, pay-box of tote, pay-box of book-market office. The tax base is established separately for each taxable object. The tax period is the calendar month. The calculation of tax is done by taxpayers. The tax return and tax payment should be made on or before the 20th date of a month after the expired tax period.

  1. Land Tax

Land tax is paid by organizations, individuals, and individual entrepreneurs who are owners of land. The taxable base is the cadastral value of the land plot as of January 1st of the tax period. The reporting period is the first, second and third quarters. The taxable period is the calendar year. The tax return should be filed no later than 1st February following the expired tax period.

  1. Biological Resource Use Fee

The biological resource use fee is imposed on legal entities, individuals inclusive of individual entrepreneurs who have received permission for procurement of objects of fauna and water biological resources on the territory of the Russian Federation. The taxable objects are fauna and water biological resources as established by the Tax Code of the Russian Federation. The fee rate is established separately for each object of fauna or each biological water resource. Fee payment is done regularly and single duties are paid.

  1. Stamp Duty

Stamp duty is levied on legal entities and individual entrepreneurs. Stamp duty is levied by state authorities, local authorities, and other authorities and is entitled to an official person relevant to law activities and is determined under Chapter 25.3 of the Tax Code of the Russian Federation.

Frequently Asked Questions

The tax number or the tax identification number is a single number assigned to every taxpayer for payment of all taxes, duties and dues throughout the territory of the Russian Federation.

An individual is said to be a tax resident in Russia if he or she is physically present in Russia for at least 183 days in any consecutive 12-month period.

Yes, Russia taxes the worldwide income of a resident.

The 183-day rule in Russia is that if a person is physically present in Russia for at least 183 days in any consecutive 12-month period then he or she will be considered a resident for the purpose of tax and will be subject to tax on their worldwide income.

Yes, Russians do file tax returns. However, tax return differs based on the type of taxes.

If you live in Russia for more than 183 days per year and have a legal Russian residency permit then you will be considered as a tax resident and be liable to pay taxes in Russia.

Russia follows VAT and not GST.

 

 

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