Doing Business in Russia
34 Doing Business in Russia
Simplified taxation system
The simplified tax system replaces
profits tax, VAT (except for VAT payable
on imports) and property tax (except for
tax based on the cadastral value).
A company can apply the simplified
tax system if it satisfies the following
criteria in the first nine months of the
year preceding its planned adoption of
the simplified tax system:
-
The company's revenue for 9 months
does not exceed RUB 45,000,000
(USD 675,517)5, though this limit is
subject to annual indexation;
The net book value of fixed assets
does not exceed RUB 100,000,000
(USD 1,501,150)*;
The average annual number of staff
does not exceed 100.
The following entities cannot apply the
simplified tax system:
Russian legal entities with branches;
Foreign legal entities and
representative offices (branches) of
FLES;
Banks, insurance companies,
pension funds, investment funds,
parties to production sharing
agreements, unified agricultural tax
taxpayers, etc.;
Entities in which other legal entities
have participation shares exceeding
25%.
The simplified tax rate can be:
-
6% on revenues. The regional
authorities can decrease this rate
to anything within a range from 1 to
6%, depending on the taxpayer's
category; or
15% on profits (revenues minus
deductible expenses). The regional
authorities can decrease this rate
to anything within a range from 5 to
15%, depending on the taxpayer's
category.
Taxpayers must make quarterly advance
payments, making the annual final
payment by 31 March of the following
calendar year. Advance tax estimates
and annual tax returns are due
within the same timeframes as their
corresponding payments.
Unified agricultural tax
Agricultural producers are allowed to
apply the unified agricultural tax. This
tax replaces profits tax, VAT (except for
VAT payable on imports) and property
tax.
The unified agricultural tax is levied on
income minus deductible expenses.
Income is calculated in accordance
with general profits tax rules. Expenses
are deductible only if they are referred
to in the authorised list, economically
justifiable and properly documented.
Unified agricultural tax is paid at a rate
of 6%.
Advance payment is due after the first
six months, with final payment and
completion of the tax return due by 31
March of the following year.
4 Actual exchange rate of the Central Bank of the Russian Federation as of 2 June 2016 (RUB 66.6156: USD1)
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