Corporate Tax in Russia
- Tax Base For Resident and Foreign Companies
Russian legal entities are taxed on their worldwide income.
Foreign legal entities which have a permanent establishment in Russia (subsidiary, branch, agency, etc.) are taxed on the income earned by this establishment in Russia. Expenses occurred abroad by this establishment can be deducted.
|Regional tax||17.5% (with a possible reduction of 4%)|
|SMEs can choose to adopt a "simplified tax system". It takes the place of Profits tax, Income tax, VAT and Capital tax.||6% of profits or 15% of profits less expenses|
- Tax Rate For Foreign Companies
- The taxation of an establishment belonging to a foreign legal entity is similar to that of a Russian entity.
A foreign company's income of Russian origin may be subject to deduction at source. This concerns, in particular, dividends, interest, royalties, sale of shares in a Russian company or of real estate.
- Capital Gains Taxation
- Long term capital gains are considered in the same way as other income and taxed at the same rate as Corporate tax, i.e. 20%.
- Main Allowable Deductions and Tax Credit
- All expenses (with a few exceptions) are deductible if the documents confirming these expenses, even indirectly, are provided.
Research and Development expenses are deductible up to 100% until 2 or 3 years after the end of the project.
Reduction of up to 4% of profit tax is availble in certain region of Russia. Technology and software companies may also benefit from some concesions
- Other Corporate Taxes
- Unified social tax: paid on all payments made to employees; the rate is progressive.
- Tax on personal property and real estate: the maximum rate is 2.2%; property ownership is exempt.
For additional information access the 2009 Danske Bank guide on Doing Business in Russia.
Country Comparison For Corporate Taxation
|Russia||Eastern Europe & Central Asia||United States||Germany|
|Number of Payments of Taxes per Year||11.0||41.7||11.0||16.0|
|Time Taken For Administrative Formalities (Hours)||320.0||313.9||187.0||215.0|
|Total Share of Taxes (% of Profit)||46.5||41.2||46.8||48.2|
Source: Doing Business
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.
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Russian tax authorities have tracked their WTO bid over the past year by exempting profits tax on the key education and medical services sectors under a one-year-old tax code.
Hong Kong Trade Development Council (HKTDC) on 31 Dec 2011 related to Corporate Tax in Russia
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Government Trade Promotion, Hong Kong SAR