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Tax Guide

Financial Year – 1 January – 31 December
Currency – Russian rouble (RUB)

Corporate Tax Summary

Residence – The following companies are considered to be resident in Russia:

  • Russian companies
  • Foreign companies managed from Russia
  • Foreign companies with a branch in Russia which voluntarily acquire Russian tax residency
  • Foreign companies which are deemed to be Russian tax residents according to the provisions of international treaties

Basis of Taxation – The tax base is gross taxable profits, which is calculated as sales and non-sales income net deductible expenses. Income and expenses are determined on accrual basis except for small taxpayers who may use cash basis.

Deductible expenses are defined as justified and documented expenditures incurred by a taxpayer in the course of activities aimed at deriving income. Individual types of expenses are deducted only within statutory limits, including expenses for certain types of advertising, interest and representation expenses.

Reference
Corporate Income Tax Rate (%) The basic tax rate is 20%. The 20% rate is split between budgetary levels as follows:

  • Federal budget – 2%
  • Regional budget – up to 18% (but not less than 13.5%)
Branch Tax Rate (%) The basic tax rate is 20%
Withholding Tax Rate:
Dividends – Franked 13% at source: Dividends paid between two Russian companies, provided that the 0% rate does not apply.
15% at source: Dividends paid to foreign companies.
13%: Dividends paid by foreign companies to Russian companies.
0%: Incoming dividends from Russian or foreign companies, provided that the Russian company has held not less than 50% of the equity of the payer for at least 365 consecutive days.
Dividends – Unfranked 13% at source: Dividends paid between two Russian companies, provided that the 0% rate does not apply.
15% at source: Dividends paid to foreign companies.
13%: Dividends paid by foreign companies to Russian companies.
0%: Incoming dividends from Russian or foreign companies, provided that the Russian company has held not less than 50% of the equity of the payer for at least 365 consecutive days.
Dividends – Conduit Foreign Income 13% at source: Dividends paid between two Russian companies, provided that the 0% rate does not apply.
15% at source: Dividends paid to foreign companies.
13%: Dividends paid by foreign companies to Russian companies.
0%: Incoming dividends from Russian or foreign companies, provided that the Russian company has held not less than 50% of the equity of the payer for at least 365 consecutive days.
Interest 15%
Royalties from Intellectual Property 15%
Fund Payments from Managed Investment Trusts n/a
Branch Remittance Tax n/a
Net Operating Losses (Years)
Carry Back Not allowed
Carry Forward 10 years

Individual Tax Summary

Residence – Individuals are Russian tax residents if they are physically present in Russia for at least 183 days per 12 consecutive months.

Basis of Taxation – Russian tax residents are subject to personal income tax on their worldwide income. Non-resident tax payers are only subject to tax on their Russian source income.

Individuals are granted standard, social, property and professional deductions. Deductions apply only to income taxed at the 13% rate.

Filing Status – Individuals should file a tax return by 30 April of the following year, but only if the individual has received income which has not been taxed at source (for example, offshore income), or if the individual would like to receive social or other deductions.

All employers (including representative offices of foreign companies) must withhold personal income tax from individuals‘ wages and salaries.

Personal Income Tax Rates

Taxable Income Tax Payable – Residents Tax Payable – Non Residents
Income, except for income taxed at other rates 13%
Dividends 9%
Income in the form of prizes, winnings, etc.; bank deposit interest on the part exceeding the Central Bank refinancing rate or 9% for foreign currency deposits 35%

Goods and Services Tax (GST)

Rate 20% – general rate
10% – a number of foodstuffs, goods for children, medicines, books and periodicals
0% – exported goods and related works (services)
Taxable Transactions VAT is levied on the sales of most goods, works and services on Russian territory, as well as on imported goods. Exported goods are taxed at zero rate, which allows exporters to recover VAT paid for supplies.
Registration There is no separate VAT registration requirement in Russia
Filing and Payment The tax due (output VAT net input VAT) should be paid on a monthly basis. Small taxpayers may pay VAT on a quarterly basis.

The VAT return should be filed quarterly

Other Taxes Payable

Tax Reference
Payroll Tax Parafiscal levies on employers are imposed in the form of:
Pension Fund contributions – up to 22% of the employees‘ salary
Social Security Fund contributions – up to 2.9%
Compulsory Medical Insurance Fund contributions – up to 5.1%
Stamp Duty There is no transfer tax in Russia
Land Tax Land tax is a local tax imposed on land owners (not holders or tenants). The tax base is the cadastral value of the land as of 1 January of the tax year. Tax returns should be filed and tax should be paid quarterly.
Tax rates cannot exceed the rates set at federal level:
0.3% – for agricultural, residential and utility infrastructure lands
1.5% – for other types of land

Last updated: 30.09.2020

Contact us:

Partner in Russia
Oleg Kamenev
Partner – ECOVIS LEGAL RUSSIA
+7 495 627 55 41