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In this page: Accounting Rules | Tax Rates | Intellectual Property | Legal Framework | Standards | Business Practices

 

Accounting Rules

Tax Year
From 1 January to 31 December.
Accounting Standards
In Russia, accountancy is mainly interpreted as the rules defining the way of keeping accounts books.
It is governed by the Russian accounting standards (RAS in English), which are different from international standards.
Accounting Regulation Bodies
Ministry of Finance
Russian Central Bank
Accounting Reports
Company annual accounts must be composed of:
- a balance sheet,
- a profit and loss account,
- notes.
Small companies can produce simplified accounts.
Publication Requirements
Only certain companies (insurance or joint-stock companies) are requested to publish their accounts (with an audit).
Professional Accountancy Bodies
Russian institute of professional accountants
International association of accountants and auditors
CIPA , International certification program for professional accountants.
Certification and Auditing
Only certain companies have to seek a statutory auditor to conduct an annual audit of the financial health of their organization. You can contact the Russian College of auditors.
Accounting News
EIN News
IAS Plus

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Tax Rates

Consumption Taxes

Nature of the Tax
VAT : Nalog na dobalennyu stoimost (NDS)
Tax Rate
18%
No VAT for SME except for imports activities.
Reduced Tax Rate
The reduced rate of VAT in Russia is 10% and mainly concerns foodstuffs and children's clothes. A zero VAT rate is applicable (but is not limited to) to the following operations:
- export of goods to a destination outside Russia;
- transportation, loading/unloading and arranging of transportation, loading/unloading of exported goods performed by Russian organisations or Russian individual entrepreneurs;
- transportation, loading/unloading and arranging of transportation, loading/unloading of imported goods performed by Russian organisations or Russian individual entrepreneurs (except for Russian railway carriers);
- works (services) related to the transportation of goods in transit;
- some goods and services supplied to foreign diplomatic missions;
- Some financial services and medical equipment.
Other Consumption Taxes
There are excise duties on many luxury goods, in particular on cars, motorbikes, alcohol and tobacco.

Learn more about Service Providers in Russia on Globaltrade.net, the Directory for International Trade Service Providers.

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Corporate Taxes

Company Tax
20% (2% payable to the central government and 18% payable to the regional government which have the power to reduce the regional element by up to 4%.)
Tax Rate For Foreign Companies
Russian legal entities are taxed on their worldwide income.
Foreign legal entities which have a permanent establishment in Russia (subsidiary, branch, agency, etc.) are taxed on the income earned by this establishment in Russia. Expenses occurred abroad by this establishment can be deducted.
Capital Gains Taxation
Long term capital gains are considered in the same way as other income and taxed at the same rate as Corporate tax, i.e. 20%.
Main Allowable Deductions and Tax Credits
All expenses (with a few exceptions) are deductible if the documents confirming these expenses, even indirectly, are provided.
Research and Development expenses are deductible up to 150% until 2 or 3 years after the end of the project.

Reduction of up to 4% of profit tax is available in certain region of Russia. Technology and software companies may also benefit from some concessions

Other Corporate Taxes
- Unified social tax: paid on all payments made to employees; the rate is progressive.
- Tax on personal property and real estate: the maximum rate is 2.2%; property ownership is exempt
Other Domestic Resources
Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.
 

Country Comparison For Corporate Taxation

  Russia Eastern Europe & Central Asia United States Germany
Number of Payments of Taxes per Year 7.0 28.0 11.0 9.0
Time Taken For Administrative Formalities (Hours) 177.0 260.0 175.0 207.0
Total Share of Taxes (% of Profit) 54.1 40.5 46.7 46.8

Source: Doing Business - Last Available Data.

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Individual Taxes

Tax Rate

Flat tax rate for residents 13%
Tax for non-residents 30%
Allowable Deductions and Tax Credits
The following expenses can be deducted:
- donations to recognized institutions (up to 25% of income)
- expenses relating to the education of a family member (up to a certain limit)
- for a dependent member of the family (up to a certain limit)
- contributions to a supplementary retirement scheme (up to an annual limit)
- medical expenses (up to 28 000 roubles)
- the purchase of real estate (deductions up to 1 million roubles a year)

The following income is exempt from tax: sale of living accommodation or another good owned for more than 3 years, interest earned on deposits made to Russian banks under certain conditions, grants, retirement pensions or disability benefit.
Special Expatriate Tax Regime
There is no special regime for expatriates.

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
List of treaties signed by Russia with links to texts
Withholding Taxes
Dividends: 9% (15% if paid to foreign entity or non-resident); Interest: 20% to nonresidents, Royalties: 20%. These rates may be lower in the case of a tax treaty with Russia.

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Sources of Fiscal Information

Tax Authorities
Russian federal tax service
Other Domestic Resources
Federal tax service (in Russian)
Center for deduction of R&D expenses (in Russian)
RosBusinessConsulting in English

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Learn more about Taxes and Accounting in Russia on Globaltrade.net, the Directory for International Trade Service Providers.

Intellectual Property

National Organizations
The Russian Federal instrument for the protection of intellectual property is the Russian Patent &Trademark Office.
Given the risks of pirating in Russia, it is imperative to register with the register of trademarks to ensure protection ( be careful: judicial procedures in the country are very slow).
Regional Organizations
Russia is a member of the Eurasian Patent Organization.
International Membership
Member of the WIPO (World Intellectual Property Organization)
Signatory to the Paris Convention For the Protection of Intellectual Property
 

National Regulation and International Agreements

 
Type of property and law Validity International Agreements Signed
Patent
 
Patent Law
20 years Patent Cooperation Treaty (PCT)
Trademark
 
Law on Trademarks, Service marks and Appellations of Origin of Goods
10 years Trademark Law Treaty
Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks
Design
 
Patent Law
10 years  
Copyright
 
Law on Copyrights and Relative Rights
70 years after the death of the author Berne convention For the Protection of Literary and Artistic Works
Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their Phonograms
Rome ConventionFor the Protection of Performers, Producers of Phonograms and Broadcasting Organizations
Industrial Models
 
Patent Law
5 years  

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Legal Framework

Independence of Justice
Judicial power in Russia is not independent. It suffers from corruption, lack of funds and qualified personnel.
Equal Treatment of Nationals and Foreigners
Foreigners cannot expect an impartial hearing in judicial matters.
The Language of Justice
Russian
Recourse to an Interpreter
Possible
Sources of the Law and Legal Similarities
The main source of the law is the Constitution of December 1993. The country's judicial system is based on a system of civil law and judicial reviews of various legislation.
Checking National Laws Online
Database of the Council of the Federation (in Russian)
Kodeks

Learn more about Lawyers and Legal in Russia on Globaltrade.net, the Directory for International Trade Service Providers.

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Standards

National Standards Organizations
Federal Agency for technical regulation and metrology
Test and certification Center (in Russian)
Certification research institute
Institute for information on certification and quality
Federal Service for Control over Healthcare and Social Development (Roszdravnadzor)
Federal Service for Supervision of Consumers Protection and Welfare (Rospotrebnadzor)
Federal Service for Ecological, Technological and Nuclear Surveillance (Rostechnadzor)
Federal Agency of Svyaz (Rossvyaz) Ministry of Communications and Mass Media
Integration in the International Standards Network
Russia is a member of the International Standards Organization (ISO), the International Electrotechnical Commission (IEC), the International Telecommunication Union (ITU), the International Organization of Legal Metrology (OIML). It is a signatory to the Metre Convention and an affiliated member of the International Laboratory Accreditation Cooperation.
In the framework of the CIS, Russia is an integral part of the EuroAsian Council for Standardization, Metrology and Certification. It is also a member of the European Organization for Quality, and of COOMET (EuroAsian Cooperation of National Metrological Institutions).
Classification of Standards
GOST + 4 figures indicating the rank + 2 figures indicating the technical domain.
Online Consultation of Standards
On-line catalog (in Russian)
New standards (in English)
Certification Organizations
List of certification organizations
GOST
Rostest USA, Inc.

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Business Practices

General Information
ExecutivePlanet
Kwintessential
Communicaid
Opening Hours and Days
Banks and administrative offices are closed on Saturdays and Sundays. You find bureaux de change everywhere, and they like US dollars and Euros above all. Some of them are open at weekends.
Shops and bureaux de change are open on Saturdays and until about 8pm during the week. Some are open 24/24 and 7/7.
 

Public Holidays

New Year 1 and 2 January
Orthodox Christmas (Rojdevstvo) 7 January
Defenders of the country Day 23 February
International Women's Day 8 March
Labor Day holiday 1 and 2 May
Victory Day (Armistice 1941-45) 9 May
National Day (Russian independence) 12 June
Unity Day 4 November
 
Holiday Compensation
When a public holiday falls over the weekend, the Russian authorities announce if the day will be celebrated on the preceding Friday or the following Monday. The authorities can declare day's holidays to create long weekends. These days are usually made up for on other close dates.
 

Periods When Companies Usually Close

New Year 1st week of January
Labor Day 1st week of May
Summer holidays 2 weeks in July or August
 

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Last Updates: January 2015