The Russian levy system tends to use moderate flat or accumulative levy rates. It’s largely centralized for a civil state and relies heavily on proceeds from oil painting and natural gas entities, which themselves are substantially state-owned. In 2006 the levies burden on oil painting companies exceeded 45 percent of net sales( compared to 12 percent in construction and 16.5 percent in telecommunications). Rates for oil painting-related levies and tariffs, unlike regular levies, are set not by the Tax Code but by government decree. The Russian Ministry of Finance estimated that earnings regulated by the Tax Code accounted for 68 percent of civil profit in the 2008 financial year, rising to 73 percent in 2010.
Income tax
Taxpayers
Taxpayers are subject to Russian income tax as either tax residents or non-residents.
levy residents are taxed on their worldwide income. A person is considered to be a levy occupant if he/ she is physically present in Russia for at least 183 periodic days during a 12- month rolling period. According to interpretations from the Russian Ministry of Finance, still, the duty residency status of a person should be defined by counting the days spent in Russia within the applicable periodic time. In 2020, due to the COVID-19 epidemic and the separate restrictions on the movement of people, a temporary rule was espoused for that levy year. Accordingly, people who spent between 90 and 182 days in Russia in 2020 are entitled to claim duty occupancy status if they so wish. Individuals should submit their operations for voluntary recognition as duty residents and their particular income duty return. Non-residents have levies assessed on their Russian-sourced income, irrespective of the nature of that income.
Taxable income
Taxable income is gross income, smaller deductions, and immunity. Gross income is defined as any profitable gain, in cash or in-kind, obtained from a taxpayer and subject to his/ her optional disposal.
Tax rates
Residents taxation
A standard flat rate of 13 percent applies to most types of tax not exceeding irk 5m( EUR) annually. From 1st January 2021, an increased particular income levy rate of 15 percent applies to the people’s periodic tax exceeding irk 5m( EUR). A rate of 35 percent applies to certain prizes, insurance bills, and interests from bank deposits above specified limits.
Non-residents taxation
A general rate of 30 percent applies to all types of Russian-sourced income except dividends( to which the rate of 15 percent applies). It may be possible to apply the applicable vittles of a DTT to exempt certain types of income from non-resident taxation. In addition, a 13 percent particular income levy rate applies to remuneration entered from professional conditioning of non-residents with an extremely good specialist status under Russian migration law. On 1st January 2019, levy immunity applicable to Russian tax residents who sell the domestic property after a certain period of ownership( the length of the period depends on the ground on which the dealer had obtained ownership of the property) was extended to non-residents. originally, such immunity applied only to the tax from the trade of immovable property acquired by similar non-residents after 1st January 2016. Now it applies irrespective of the date of accession of the property.
Tax payments
Withholding of levy
Russian companies, individual entrepreneurs, and permanent establishments of foreign companies are considered to be levy agents. They must calculate, withhold and pay income tax on the payments they make to people. As a result, workers aren’t needed to file levy returns for their payment, unless they claim property deductions or have other income which is subject to the obligation to file a levy declaration. An individual entrepreneur remains responsible for meeting his/ her income tax mandate.
Tax returns
A person must file returns and pay the applicable income tax if:
- Income was obtained from outside Russia( in the case of a Russian duty occupant).
- The duty wasn’t duly withheld, or income was obtained from the trade of property, etc.
- The duty return must be filed by 30th April the year following the duty period.
The quantum of duty due must be paid by 15th July in the year following the applicable duty period. Still, if the taxpayer leaves Russia, he/ she must file a duty return at least one month before his/ her departure and pay the quantum of duty due within 15 days after the form date.
Individual property tax
Taxpayers
The owners of houses, apartments, apartments, lodges, garages, other structures, or constructions are liable to pay individual property duty.
Tax rates
The cadastral value of the property is used as a taxable base to calculate individual property duty. The applicable duty rate depends on the type of the taxable property concerned.
As individual property duty is a regional tax, the regional government authorities are entitled to set the levy rate within specified statutory limits.
