Russia: Domestic Taxation
Other Significant Taxes
Value Added Tax (VAT)
All types of organisation are subject to VAT, and it applies to sales of goods and services in the territory of Russia, certain types of internal transfer and expense, and the importation of goods and services into the customs territory of Russia. Registration for VAT purposes is automatically a part of tax registration as such.
VAT is levied at a general rate of 18% on taxable supplies, which include the majority of domestic sales of goods and services. There is a reduced rate of 10% for certain basic food products, children's goods, certain medical products, medicines, drugs, and newspapers and magazines, including services related to their production.
Exempt supplies include the provision of financial, insurance, educational, cultural, or medical services, and the provision of certain medical equipment, prosthetics, and facilities for disabled persons. There is no right to offset input VAT on such supplies. Exemptions from import VAT are few but include specific technological equipment and spare parts contributed to the charter capital of Russian entities.
VAT due to the government is calculated as the difference between VAT collected from customers for goods, works or services sold, and VAT paid to suppliers. VAT paid to suppliers is generally recoverable as long as the underlying costs relate to business activity of the company. VAT refunds are made only to tax registered persons making taxable supplies in Russia, and in practice obtaining refunds of input VAT is extremely time-consuming if possible at all.
Taxpayers with aggregate revenue over 2m roubles in the preceding three-month period are required to pay VAT and file VAT returns on a monthly basis (by the 20th of the following month); otherwise, VAT accounting and payment is quarterly.
The assets tax is levied by local authorities on property belonging to Russian legal entities and representative offices of foreign legal entities. The tax is based on the net book value of fixed assets, intangible assets and deferred expenses incurred as of the balance sheet date.
The maximum permitted rate since 2004 has been 2.2% annually, charged by regional governments.The tax is paid quarterly based on current balance sheet values.
Excluded assets include final products, stocks, raw materials, goods, and inventories, monetary assets, securities, social and cultural assets, environmental protection assets, agricultural equipment, pipelines, electricity lines, and land. Prepaid rent is specifically included in the tax base.
Advertising tax is levied at 5% all direct and indirect advertising expenses, excluding VAT. Tax is paid in full to the local budgets. Local authorities may decrease the tax rate but in Moscow and St. Petersburg, the maximum rate of 5% applies. Advertising tax is deductible for profits tax purposes.