Russia – Tax System
Corporate taxpayers include: • Russian companies; • Foreign
companies which operate in the Russian Federation through permanent
representative offices and (or) receiving income from sources in the Russian
Federation; • Foreign companies recognized as tax residents of the Russian
Federation are considered as Russian companies.
For the purpose of this Code, the following organisations
are recognized as tax residents of the Russian Federation: 1) Russian
companies; 2) Foreign companies recognized as tax residents of the Russian
Federation in accordance with the international tax treaty - for the purpose of
applying this international treaty; 3) Foreign companies actually managed in
the Russian Federation unless otherwise is provided by the international tax
Companies which are responsible participants of the
consolidated group of taxpayers are recognized as income taxpayers of such
consolidated group of taxpayers.
TAX PERIOD - The tax period is one calendar year. The reporting
periods for tax purposes are the first quarter, a half-year, and nine months of
a calendar year. With the exception of foreign legal entities, enterprises are
obliged to make monthly advance payments of their quarterly liabilities.
Advance payments are due not later than the 28th day of the corresponding
TAX RATES - The standard rate of tax is currently of 20% of
which of 2% of is normally paid to the federal budget and 18% - to the budgets
of constituent entities of the Russian Federation. The tax rate of the tax
payable to the budgets of constituent entities of the Russian Federation may be
lowered by the laws of constituent entities of the Russian Federation for
specific categories of taxpayers. Yet, the specified tax rate may not be lower
than 13.5% unless otherwise is established by the Tax Code (in particular,
special tax rates for taxpayers which are participants of regional investment
projects are established).
Foreign enterprises deriving income which is not connected
with carrying out their business activities through a permanent establishment
pay profit tax at the rate of 20%. A rate of 10% applies to non-residents on
income from the use, maintenance or rent of charter ships, aircraft and other
moving vehicles or containers (including trailers and ancillary equipment
required for traffic) in connection with international traffic.
A rate of 15% applies to non-residents receiving dividends.
Domestic enterprises have the option to pay tax monthly
based on their actual profits. Payments are due no later than the 28th day of
the following month. Foreign enterprises carrying out their business activities
through permanent establishments make quarterly advance payments.
In general, income tax returns must be filed no later than
28 March following the tax year.
The following allowances are deducted from the taxable base:
• Profits received as payments to the charter capital; • The costs of
maintaining certain social facilities; • Profits received as special-purpose
financing in the forms of: (a) Foreign financing of capital investments; (b)
Grants for the benefit of culture, sports, recreation, scientific research and
approved research foundations; Assets received by Russian enterprises free of
charge for the purposes of increasing net assets or from enterprises which hold
more than 50% of the share capital of the recipient. In the latter case, the
assets should not be distributed to a third person within a year of the
CONTROLLED FOREIGN COMPANIES AND CONTROLLING ENTITIES –
A foreign company is recognized as a controlled foreign
company if it meets the following conditions: 1) The company is not recognized
as a tax resident of the Russian Federation; 2) The company’s controlling
parties are companies and (or) individuals recognized as tax residents of the