Date de publication : 06-10-1907
The following information are for the sole purpose of providing a general overview of the local taxation of the Corporate tax aspects of the country. In any case, it can not replace a tax advice, or be considered as an official information.
Yes we tax in Russia
New tax reform: No specific information
New tax treaties: No specific information
Local tax advisors
No specific information on the local tax advisors.
Local tax administration
The definition of Permanent Establishment follows the wording of article 5 of the OECD Model:
- Dependent agent who habitually concludes contracts in the name of a non-resident company (except if the activity is limited to purchase of goods);
- Fixed place of business, building site, construction, assembly or installation and any related supervisory activity.
Resident companies are taxed on their worldwide income. However, non-resident companies are only taxed on their revenues derived from Russia sources.
Entities are considered to be resident for tax purposes in Russia if the executive body of the company regularly performs activities from Russia, or if the day to day operations of the company are managed in Russia.
Note: the definitions of permanent establishment and place of residence are subject to the relevant provisions of any applicable double tax treaty, if any.
Corporate Income Tax
The general CIT tax rate is 20% (federal and regional).
Non-taxable income includes the following:
- Dividends received from qualifying participations
- Certain capital gains deriving from qualifying participations
Non-deductible expenses includes the following:
- Dividends benefiting from the participation exemption
- Interest in excess of the thin-capitalization threshold
Carry forward: Yes indefinitely, but some restrictions may apply.
Carry back: No
Companies should submit the tax return annually before the 28 March of the following year.
Annual tax returns are established by the company on a self-assessment system.
Companies shall pay monthly advance payments on the current taxable year.
Whithholding Taxes (payment to foreign companies)
The local tax rates in Russia are the following, subject to the provisions of an applicable double tax treaty, if any.
There is no WHT on the profits paid from a branch to its foreign head office.
The general rate of WHT on dividends is 15% of the gross amount.
The general rate of WHT on interest is 20%.
The general rate of WHT on Royalties is 20%.
The general rate of WHT on management fees is 0%.
The general rate of WHT on technical services is 0%.
Generally, capital gains are taxed under the regular CIT as general income.
Note: capital gains deriving from qualifying participations are exempt under the participation exemption.
Standard VAT tax rate is 18%
Reduced tax rates are:
- 10% (among others, supply of foodstuff, medicines, …);
Zero-rated supplies include, subject to certain conditions:
- exports of goods;
- transport of goods and services directly related to import and export of goods;
- Certain services related to passenger transportation.
Exempt supplies include, subject to certain conditions:
- Certain financial services
- Certain insurance services
- Public transport
Note: exempt transactions differ from zero-rated transactions in that the input VAT associated with exempt transactions is not deductible.
In case where for a tax period, Input VAT exceeds Output VAT, certain non-resident companies (which are not required to register and incur Russia-VAT in the course of their business activities in Russia) may apply for a refund under the same conditions than resident companies.
No other specific information of VAT in Russia.
There is no specific information in the local tax law regarding the statute of limitation.
There is foreign exchange control in Russia. However, in theory income and capital could be freely repatriated.
There are thin capitalization rules in Russia. The interest derived from loans between related parties may not be deductible in case where interest exceeds some ratios (3 times the taxpayer’s net equity).]
Do not hesitate to share your exprience in Russia with us in the comments below. Any comments are welcome !