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Year of foundation – December 1992, now one of the TOP 20 leading Russian independent audit firms
11 Partners & Staff – near 190 persons
Services: Audit Tax & accounting consulting Legal consulting & legal support Foreign representative offices’ support Management consulting Due diligence, others
value added tax (VAT) tax on profit (income)
of organizations unified social tax (UST) personal income tax excise duties tax on mining
operations water tax fee for the right of use
of fauna state due
Federal Taxes
tax on property of organizations
transport tax tax on gambling business
land tax individual property
tax
Regional Taxes
Local Taxes
Basic System of Taxation
Structure of TStructure of Tax ax Revenues to Federal Budget, Revenues to Federal Budget, January-November 2007January-November 2007
VAT38%
Excise Duties3%
Other taxes & duties
2%UST11%
Tax on profit of organizations
17%
Tax on mining operations
29%
VALUE-ADDED TAX (VAT)VALUE-ADDED TAX (VAT)
Rates:Rates: 0%0% (export goods, works and services related to export, (export goods, works and services related to export,
provided in cosmic space, international transportation, provided in cosmic space, international transportation, goods for diplomatic representations)goods for diplomatic representations)
10%10% (foodstuffs and children's goods, periodicals (except (foodstuffs and children's goods, periodicals (except for advertising and erotic materials), some medical goods)for advertising and erotic materials), some medical goods)
18 % (18 % (other goods)other goods)
Some goods, works and services Some goods, works and services are exempt from the VAT:are exempt from the VAT: rent of premises for foreign citizens and organizations rent of premises for foreign citizens and organizations
accredited in Russiaaccredited in Russia some medical goods and servicessome medical goods and services insuranceinsurance financial services and otherfinancial services and other
VALUE-ADDED TAX (VAT)VALUE-ADDED TAX (VAT)
Taxpayers: Taxpayers:
Russian and foreign companiesRussian and foreign companies
individual entrepreneursindividual entrepreneurs
There is no special registration as a VAT – payerThere is no special registration as a VAT – payer
VALUE-ADDED TAX (VAT)VALUE-ADDED TAX (VAT)
Objects of taxation and tax basesObjects of taxation and tax bases::
goods, works or services realized on the Russian goods, works or services realized on the Russian territory. Cost of goods is included into the taxable territory. Cost of goods is included into the taxable base on the date which is the first in time: the date base on the date which is the first in time: the date of receiving payment from the customer or the of receiving payment from the customer or the date when the goods are dispatcheddate when the goods are dispatched
goods having been brought into the Russian goods having been brought into the Russian custom territorycustom territory
fulfillment of building and assembly works for fulfillment of building and assembly works for organization’s own consumptionorganization’s own consumption
VALUE-ADDED TAX (VAT)VALUE-ADDED TAX (VAT)Goods, works or services considered to be realized in the Russian Goods, works or services considered to be realized in the Russian
Federation, if:Federation, if: goods are located on the Russian territory at the moment of goods are located on the Russian territory at the moment of
beginning of the shipment beginning of the shipment works and services - according to the special rules established by works and services - according to the special rules established by
the Tax Codethe Tax Code The Russian territory shall be considered the place of rendering a The Russian territory shall be considered the place of rendering a
service service ((fulfillment of workfulfillment of work)) if if it bears relation to any property which is placed on the Russian it bears relation to any property which is placed on the Russian
territoryterritory cultural, educational, tourist or sport services take place in the RFcultural, educational, tourist or sport services take place in the RF the consumer of the services operates on the Russian territory and the consumer of the services operates on the Russian territory and
these are services in granting patent or license rights, author’s these are services in granting patent or license rights, author’s rights, in design of software programs, or consulting, legal, rights, in design of software programs, or consulting, legal, accounting, advertising, information and some other servicesaccounting, advertising, information and some other services
the executor of other kinds of services and works performs operation the executor of other kinds of services and works performs operation in the RFin the RF
Tax On Organizations’ ProfitTax On Organizations’ Profit
Taxpayers:Taxpayers:
Russian organizations Russian organizations foreign organizations carrying out their activity in the foreign organizations carrying out their activity in the
Russian Federation through their permanent Russian Federation through their permanent representations and/or receiving incomes from sources representations and/or receiving incomes from sources situated in the RFsituated in the RF
Tax on foreign organizations’ income which do not have a Tax on foreign organizations’ income which do not have a permanent representative office in Russia is withheld by permanent representative office in Russia is withheld by the tax agent who is a source of income payment.the tax agent who is a source of income payment.
Tax On Organizations’ ProfitTax On Organizations’ Profit
Tax rates:Tax rates: for Russian organizations and foreign representative officesfor Russian organizations and foreign representative offices
- - 24%24% basic rate basic rate
- - 15%15% for interest on government securitiesfor interest on government securities
- - 9%9% for dividends (only for Russian companies) and on some for dividends (only for Russian companies) and on some kinds of government securitieskinds of government securities
for foreign companies receiving incomes from sources situated in for foreign companies receiving incomes from sources situated in RFRF::
- - 9%9% for interest on some kinds of government securities for interest on some kinds of government securities
- - 10%10% for freight of ships, planes and other means of transport for freight of ships, planes and other means of transport
- - 15%15% for dividends received from participation in Russian for dividends received from participation in Russian organizations and interest on certain kinds of government organizations and interest on certain kinds of government securities securities
- - 20%20% for other kinds of income for other kinds of income
Tax On Organizations’ ProfitTax On Organizations’ Profit
Object of Taxation:Object of Taxation:
for Russian organizations and foreign for Russian organizations and foreign representative offices - incomes decreased by representative offices - incomes decreased by the amount of expenditures. There is a complete the amount of expenditures. There is a complete list of incomes that are not levied by the tax on list of incomes that are not levied by the tax on organizations’ profitorganizations’ profit
for foreign organizations - incomefor foreign organizations - income
Tax On Organizations’ ProfitTax On Organizations’ Profit
Expenditures shall be justified by pertinent Expenditures shall be justified by pertinent documentation and economically substantiated.documentation and economically substantiated.
There are special norms for certain groups of expenditures:There are special norms for certain groups of expenditures: some kinds of advertisingsome kinds of advertising entertainment expensesentertainment expenses for staff trainingfor staff training interests on loansinterests on loans some othersome other
Expenditures connected with the fixed assets and intangible Expenditures connected with the fixed assets and intangible assets reduce the taxable amount in the form of assets reduce the taxable amount in the form of depreciation.depreciation.
Tax On Property of Tax On Property of OrganizationsOrganizationsTaxpayers:Taxpayers:
Russian legal entities,Russian legal entities,
foreign companies’ representative offices,foreign companies’ representative offices,
foreign legal entities possessing real estate in Russia. foreign legal entities possessing real estate in Russia.
The object of taxation:The object of taxation:
for both Russian companies and foreign firms’ representations for both Russian companies and foreign firms’ representations - the net book value of movable and immovable property - the net book value of movable and immovable property (fixed assets). (fixed assets).
The tax rateThe tax rate - established by laws of subjects of the Russia - established by laws of subjects of the Russia
but cannot exceed but cannot exceed 2,2%2,2% of the net of the net book value of the book value of the property.property.
Unified Social taxUnified Social tax
The taxpayers:The taxpayers: legal entities and natural persons making legal entities and natural persons making disbursements for the benefit of natural persons. disbursements for the benefit of natural persons.
The object of taxationThe object of taxation - remunerations accrued by taxpayers for - remunerations accrued by taxpayers for the benefit of natural persons under labor and civil legal contracts the benefit of natural persons under labor and civil legal contracts the subject matter of which is performance of works or provision the subject matter of which is performance of works or provision of services. of services.
The tax rateThe tax rate is deemed to be regressive: is deemed to be regressive: if the taxable amount is if the taxable amount is smaller than 280,000 rublessmaller than 280,000 rubles (about (about
8,000 euro) - 8,000 euro) - 26%26% if the taxable amount ranges if the taxable amount ranges from 280,000 to 600,000 rublesfrom 280,000 to 600,000 rubles
(8,000 - 17,150 euro) - (8,000 - 17,150 euro) - 10%10% if the taxable amount if the taxable amount exceeds 600,000 rublesexceeds 600,000 rubles (17,150 euro) - (17,150 euro) -
2%2%
Personal Income TaxPersonal Income TaxTaxpayersTaxpayers - natural persons, tax residents and non - natural persons, tax residents and non
tax residents of Russia. tax residents of Russia.
A tax resident - a person who is staying on the A tax resident - a person who is staying on the Russian territory for not less than 183 days within Russian territory for not less than 183 days within 12 months that go one after another.12 months that go one after another.
There are 4 kinds of tax deductionsThere are 4 kinds of tax deductions:: standardstandard socialsocial propertyproperty professionalprofessional
ResidentsResidents Non-Non-residentsresidents
Tax ratesTax rates
13%13% (basic rate) (basic rate) 9%9% (for (for dividends)dividends)35%35% for certain for certain kinds of income kinds of income (e.g. the cost of (e.g. the cost of prizes gained in prizes gained in competitions competitions aimed at aimed at advertising advertising goods)goods)
30%30% for any for any incomeincome
Object of taxationObject of taxation
any income any income (from sources (from sources in the RF and in the RF and outside it)outside it)
only income only income obtained from obtained from sources in the sources in the RFRF
Special Tax RegimesSpecial Tax Regimes
taxation system for agricultural producers. taxation system for agricultural producers. The tax rateThe tax rate - - 6%6% of of the difference between income and expenditures. the difference between income and expenditures.
simplified taxation systemsimplified taxation system. . Tax rateTax rate - either - either 6%6% of the total of the total revenue or revenue or 15%15% of the difference between receipts and of the difference between receipts and expendituresexpenditures
unified tax on imputed income. unified tax on imputed income. Tax rate - Tax rate - 15 %15 % of the imputed of the imputed income amount.income amount.
taxation system, when implementing production sharing taxation system, when implementing production sharing agreementsagreements
Contact information3, bld. 1, Krivokolenny side-street,Moscow, RussiaTel.: + 7 (495) 628 5560, 621 1015Fax: +7 (495) 621 [email protected]