Russia: Domestic Taxation
Liability To Corporate Tax
Profits tax is levied on Russian legal entities and foreign legal entities that carry on business activity in Russia through permanent establishments and/or receive income from sources in Russia.
Russian Legal Entities (which would include business forms incorporated by foreign owners such as the Joint Stock Company or the Limited Liability Company) are taxed on their worldwide income. Until 2012, there was limited consolidation or group relief for tax purposes; each company within a group being a separate taxpayer. Since January 2012, Russian companies within a group of at least 90% direct or indirect ownership may file a consolidated return. There are a number of conditions attached to consolidated filing: minimum tax payment of RUB10 billion for the previous tax year, the group revenue must be in excess of RUB100 billion and assets must be RUB300 billion or more.
A permanent establishment of a foreign legal entity in Russia - typically meaning a Representative Office but including a branch, division, bureau, office, agency or any other economically autonomous subdivision - is taxed on Russian-source income, which includes income received by the permanent establishment from whatever source.
A PE is deemed to be formed from the moment when entrepreneurial activities begin to be regularly carried out. Certain activities do not lead to the creation of a PE, including those of a preparatory and auxiliary nature, the possession of securities, share interests and other assets in Russia, the mere conclusion of a simple partnership agreement to be carried out in Russia, the secondment of personnel to work in Russia, and the export and import of goods.