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Taxes in Russia

Russian Taxation

Out of all BRICS countries, Russia has probably the most liberal tax system:

  • Lowest corporate income tax at 20% out of all BRICS countries
  • Lowest in Europe personal income tax at flat 13%
  • One-time write-off opportunity for 30% depreciation costs
  • Zero-rated profit tax for healthcare and educational establishments
  • No capital gain tax for long-term direct investments

Taxes and levies are imposed on the federal, regional, and local levels.

Major corporate taxes:

Tax 

Taxable Base

Tax Rate

Profits tax 

Income minus expenses

Max 20% - base rate reducible by regional authorities

Value-Added Tax (VAT)

 

Sales of goods and services

Max 18% - base rate with a lower rate of 10% for certain basic foods, children's clothing, medicines, printed publications, etc.)

Excise tax 

Production and import of cars, tobacco, alcohol, petrol and lubricants

Variable

Customs duty 

Goods crossing the Russian customs border

0% – 20% as per the Tariff Code for goods imported and the Country of Origin.

Property tax 

Book value of fixed assets as per taxpayer's balance sheet.

Max 2.2% reducible by regional authorities

Transport tax

Engine power, tonnage, type of vehicle per engine power (hp).

Fixed rates per vehicle type. Rates vary to each vehicle type.

 

Simplified taxation system

The simplified tax system replaces profits tax, VAT (except for VAT payable on imports), and property tax.

A company can apply for the simplified tax status if in the first nine months of the preceding year:

  • The company’s annual revenue does not exceed RUB 60,000,000 (appr. EUR 800,000);
  • The net book value of fixed assets does not exceed RUB 100,000,000 (appr. EUR 1,300,000);
  • The average annual number of staff does not exceed 100.

The simplified tax rate can be:

  • 6% on revenues; or
  • 15% on profits (revenues minus expenses). Regional authorities can reduce 15% rate down to 5%.

 

Tax incentives

The following tax incentives exist in Russia:

  • Regional incentives granted by regional or local authorities with respect to taxes paid to their budgets;
  • Special tax regimes in Special Economic Zones (SEZs);
  • Incentives related to certain activities (e.g. activities related to R&D, information technology);
  • Incentives related to particular projects (e.g. Skolkovo Innovation Centre, the Sochi Olympics).