Doing Business in Russia

24 Doing Business in Russia Business Taxation Saint Petersburg Tax system overview Russian tax legislation comprises the Tax Code of the Russian Federation (hereinafter, the "Tax Code") and laws arising from it. Taxes and levies are imposed in Russia at all levels: Federal, regional and local. Federal taxes and levies are those established by the Tax Code and by Federal Law, and are paid throughout the Russian Federation. As of 1 January 2016, the following Federal taxes and levies are effective: - - - Value-Added Tax (VAT); Excise tax; Personal Income Tax (PIT); Profits tax; Mineral extraction tax; Water tax; Levies on the consumption of natural and biological resources; State duties and registration fees. Regional taxes and levies are those established by the Tax Code and by specific regional tax laws effective in the regions of the Russian Federation and only paid in those specific regions. Regional taxes include property tax, gambling tax and transport tax. Local taxes and levies are those introduced by the Tax Code and by the regulations of municipal authorities, and which are paid only in that particular municipal area. Local taxes consist of land tax, personal property tax and trade tax. Local (or regional) legislative bodies only have the right to introduce the taxes and levies delegated to their authority by the Tax Code. When deciding on tax rates, local or regional authorities are allowed to establish the following taxation aspects: - - - Tax concessions; Tax rates (within limits established by the Tax Code); Procedures and deadlines for tax payments. The tax system outlined above results in different tax burdens for taxpayers registered in different regions. Tax registration requirements No separate tax registration needs to take place in order to pay VAT or profits tax, as taxpayers need only obtain one single tax ID number for all taxes. However, taxpayers have to obtain supplementary tax registration ID numbers ('KPP') from the tax authorities for the places where their separate subdivisions are located. A separate subdivision is a subdivision located somewhere else other than the head office (e.g. in another city). A separate subdivision implies the creation of stationary working places for periods of longer than one month. Foreign Legal Entities (FLES) have to register with the local tax authorities within 30 calendar days from the date that their activities begin at that location. KPMG © 2016 KPMG. All rights reserved.

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