Overview of the Russian Taxation
Russian Tax System Overview
In general, taxes levied at all levels are regulated by the Tax Code, which sets out the structure of each tax (e.g. taxpayer, tax base, maximum tax rates, tax exemptions, administrative matters). The Russian regions are authorized to set their own rates within the framework provided by the Tax Code. The introduction of the Tax Code resulted in the systematization of the tax legislation inherited from the Soviet era and the simultaneous abolition of a number of turnover taxes and ineffective duties. Moreover, it centralized fiscal function within the tax authorities. The Tax Code was introduced in 2001 with General and VAT chapters and was then unified with chapters on other taxes in 2002, 2003 and 2004. Therefore, it is continuously being correlated, with resulting corrections and still contains a lot of loopholes and ambiguities, requiring further clarifications to be made by the fiscal governmental authorities (the Ministry of Finance) or by the courts.
The Tax Code often refers to other legislation composed of other Codes and hundreds of subordinate laws and regulations.
Tax Law Interpretations
Interpretations of the law by the Ministry of Finance and the Federal Tax Service or the tax authorities are not binding on the taxpayer or on the courts, although the tax authorities must follow such interpretations. Generally, court decisions on tax cases, including the decisions of the Supreme Arbitration Court, do not establish a binding precedent. However, the information letters on recent judicial practice issued by the Supreme Arbitration Court and the Supreme Court are binding on lower courts. The Constitutional Court's decisions on the constitutionality of particular legislation establish a binding precedent.
Russian taxes on usual corporations may be grouped as follows:
1. Income taxes Corporate Income tax - 20%
2. Indirect taxes
Please refer to VAT for more details.
3. Payroll taxes
0.2% to 8.5% (depending on industry)
Total amount of contributions payable by agricultural and small business engaged in production and socially important areas of business varies from 14% to 26%.
All property taxes are regional and the rates are established by regional authorities but cannot exceed the following limits established by the Tax Code:
Individuals are liable for:
Please refer to for more details.
5. Other taxes and duties are applied on specific products, activities and certain procedures carried out by notaries and governmental authorities:
There are also special tax regimes for small, agricultural businesses and agreements on product sharing used for the extraction of mineral resources.
Under small and agricultural regimes a unified tax, generally from 6% to 15% (or a fixed contribution) is paid. But certain conditions have to be satisfied in applying such regimes.