Russia Tax System

• Russia has a uniform rate of tax on the income of individuals.
  As of 2016 tax in Russia is payable at the rate of 13% for an individual on most income. (non-residents 30%).
  Russian residents pay 9% on dividend income. (Deduction at source).
  Non-residents pay 15% on dividend income.
• Exemptions are granted to certain income earners.
• The standard rate of Russia corporate profit tax in 2016 is 20%.
• Companies pay 9% tax on dividend income.
  Under certain terms dividend income received by companies with holding of 50% or more is entitled to participation exemption.

Russia Income Tax for an Individual

• An individual is liable for tax on his income as an employee and on income as a self-employed person.
  Tax will be payable on income earned in Russia and overseas by an individual who meets the test of a "permanent resident" of Russia.
  A foreign resident who is employed in Russia pays tax only on income earned in Russia.
• To be considered a Russian resident, residence must be established of at least 183 days in Russia during 12 months in a calendar year.
• An employer is obligated to deduct, immediately, each month, the amount of tax and national insurance due from a salaried worker.
• A self-employed individual is obligated to make advance payments on income tax that will be offset on filing an annual report.
  In the case of a new business, the advance payments will be calculated on the basis of the business owner's estimate.
  The advance payments will be made at least 3 times in each year.
• Certain payments are deductible from taxable income as detailed below.

Russia Corporate Tax

• The tax on company profits is made up of 2 rates:
  - Federal tax - -2%.
  - Regional tax - 18% (with a possible incentive reduction of up to 4.5%).
• The maximum profit tax is 20%.

Russia Capital Gains

Capital Gains (for an individual)

• The standard rate of tax is 13% for a resident and 30% for a foreign resident.
• The profit on the sale of real estate or other asset that has been held for 3 years or 5 years if bought after 1.1.2016 is exempt from tax.
• Sale of certain Russian shares bought after 1.1.2011 and held for more than five years are tax exempt.
• The maximum deduction on the sale of residential real estate held for less than 3 years is RUR 1 million.
  On the sale of another asset the deduction is RUR 250,000.

Capital Gains (for a corporation) in Russia

• The standard rate of tax for a corporation is identical to the tax on its regular income.
• Sale of certain Russian shares bought after 1.1.2011 and held for more than five years are tax exempt.
• A capital loss on the sale of a fixed asset may be offset against income in the following years.
  The offset is spread over the remaining useful life of the asset that has been sold.
• There is no cost inflation adjustment for capital gains.

Reporting Dates and Payment in Russia

• An Individual - An individual whose income is only from a wage is not obligated to file an annual return.
  The employer deducts tax from the employee and transfers it to the Tax Authority every month.
  - An individual who is self-employed is obligated to make 3 advance payments: on July 15, August 15 and November 15.
  - A self-employed individual must file a return by the end of the month of April following the end of the tax year.
  The balance of the tax due, after filing the annual return, is to be paid by July 15
• A Limited Company - It is compulsory for a limited company to submit the financial statements by March 30.
  - During the course of the year, the company is obligated to made advance payments on a monthly basis.
  These prepayments are based on the profit in the previous quarter.
  - Small businesses are not obliged to make advance payments.
  - Fines are imposed on the submission of returns after the date prescribed.

Withholding Taxes in Russia

Social Security Tax in Russia