NB Consulting Law Firm

+7 (343) 379-79-10
+7 (343) 379-79-11
+7 (343) 379-79-96

Friday, 18 March 2016 00:00

Key facts about tax system of the Russian Federation

tax systemValue Added Tax (hereinafter - VAT)
Subject to the sale of goods on the territory of the Russian Federation or the importation of goods into the customs territory of the Russian Federation. The tax base is the difference between the amount of tax calculated from the sale of goods for the reporting period and the amount of tax paid to suppliers of goods in the same period. VAT paid on the imported goods is deducted from the amount of tax payable. VAT rate for most goods is 18%.

Profits tax
Is payable on profits of legal entities. The tax base is determined as the difference between the company's revenues excluding VAT and its costs excluding VAT in the tax period. The tax rate is 20%.

The tax payable in connection with the use of a simplified system of taxation
For small businesses in Russia there is a simplified tax system, which provides for the replacement of VAT and profit tax payment with a single tax with a rate of 6% from the income of organization, or 5-15% (depending on the region of Russia) of revenues with the expenses deducted. The main limitations of using the simplified system of taxation is the maximum size of the annual income of the taxpayer, which may not exceed $ 2 million, and that the participation of other legal entities in the share capital of a taxpayer may not exceed 25%.

Payroll taxes
The employer pays contributions for social, pension and health insurance for employees at the total rate of 30%, as well as withholds personal income tax at 13% rate.

In respect of income received by  foreign organizations in the form of dividends from Russian organizations a withholding tax at a rate 15% is applied. Russia has double taxation treaties with many states providing for a reduced rate of the dividends tax, commonly 10%.

33 Radischeva Str., 3rd floor,
Ekaterinburg, Russia 620014
P.O. Box 398, Russia, 620014

Phone: +7 (343) 379-79-10,
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+7(343) 379-79-96
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