Contents / System of taxes

SYSTEM OF TAXES

In Russia taxes are divided into federal, regional and local ones (for the complete list of taxes click here).

Federal taxes are collected throughout the Russian territory, but part of the tax rate may be set at regional level. An example of tax, whose rate is set at the federal level is VAT (20%). Examples of taxes, part of whose rate is set at the regional level are the tax on profit (from 12 to 16% of the basic tax rate equal to 24%) and the enterprise profit tax.

Regional and local taxes are enacted on the respective territory by the decision of the regional or local legislative body within the list of taxes set by the federal law. Their examples are the sales tax (a regional one), the advertising tax (a local one).
Thus, different taxes may be levied in various Federation subjects.

Special tax regimes

The Tax Code provides for application of three special tax regimes:

As a result, the tax burden may dramatically vary with different regions. Besides, if a company operates via representative offices or branches this system of taxation brings to a necessity to pay taxes to different budgets at different rates, as well as to register and to submit tax reporting at each place of its activity.

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Types of taxes
Federal taxes
  • VAT
  • Tax on profit
  • Personal income tax
  • Unified social tax
  • Customs duties
  • State duty
  • Mineral resources tax
  • Fee for license and right to produce and trade in ethyl alcohol, alcoholic products
  • Other federal taxes
Regional taxes
  • Enterprise property tax
  • Transport tax
  • Sales tax
  • Other regional taxes
Local taxes
  • Land tax
  • Advertising tax
  • Retail trade patent fee
  • Liquors "patent" (for retail trading in liquors)
  • Other local taxes
Simplified system of taxation

The simplified system of taxation may be applied by small businesses - organisations and individual entrepreneurs whose sales proceeds do not exceed a threshold of 10 mln. Rb. per annum, and the number of employees is up to 15. When the simplified system of taxation is applied, the obligation to pay most taxes (VAT, tax on profit, UST, sales tax) is substituted with an obligation to pay the unified tax whereas the taxpayer chooses the object of taxation on its own - either income (tax rate is 6%), or income minus expenses (tax rate is 15%). When this system of taxation is applied, a taxpayer must still pay charges on obligatory pension insurance.

Once a taxpayer applies the simplified system of taxation, he must still pay pension insurance charge.

Unified tax on imputed income

The unified tax on imputed income may be introduced by regional laws for those types of activities where tax control is difficult to be exercised (retail trade, domestic services, catering trade, passengers and cargo transportation services). The unified tax at the rate of 15% is levied on the tax base which is calculated by multiplying a natural index unit by the base yield set by the law for this natural index. Once a taxpayer is transferred to unified tax on imputed income, he must still pay pension insurance charge.

Interpretation of unremovable doubts

In accordance with Article 3 of the Tax Code of the RF, all unremovable doubts, contradictions and ambiguities of legislative acts relevant to taxes and/or fees shall be interpreted in favour of taxpayers.