RUSSIAN TAX SYSTEM VS INTERNATIONAL ONES

Since 2015, the Russian Government has practically imposed a moratorium on increasing the tax burden on the national economy. The moratorium will extend for the next three years being one of the main lines of the tax policy of the Russian Federation for the period of 2016 – 2018 approved by the Ministry of Finance.

The Government undertakes not to put forward proposals to increase the tax burden to the State Duma in 2016-2018 and reject those coming from other sources.

A stable tax system ensures a comprehensive and predictable business environment. Current tax burden in Russia is much lower than that in the majority of advanced western economies. Special tax regimes are applied to SMEs.

Russia offers tax incentives to foreign investors starting businesses in Special Economic Zones (SEZ) and in the territories of priority development.

Manifold activities: food production, children’s goods manufacture, print media are subject to preferential 10% VAT.

Capital tax in nonexistent in Russia, corporate property tax being its equivalent has limited applicability and involves a lot incentives.

Corporate tax in Russia and overseas

Indirect taxes in Russia and overseas

Personal income tax rate in Russia and overseas

A lower personal income tax rate for Russian tax residents is a distinct advantage of the Russian tax system over those applicable in Europe and the US.

Personal income tax rate for residents amounts to 13%, the same rate applies to the income earned by foreign HQSs. In accordance with the Russian legislation, HQSs are determined according to their salary level.

Dividends received by non-residents from Russian entities are taxed at the rate of 15%; the yield on securities is subject to 30% personal income tax.

The Russian tax system uses flat tax rates, which is equal to any amount of income, which is more expedient than progressive taxes (levied in the EU and the US) with the tax rate increasing as the taxable amount increases. The above makes Russia exclusively compelling to foreigners searching for tax benefits like Gérard Depardieu granted Russian citizenship and registered as a resident of Saransk in 2013 in; or Juan Lezcano, a Paraguayan football defender, and Roy Jones, Jr., an American professional boxer, rapper and actor.