Digital Report - immediate delivery to your email.
Date of Publishing: March, 2021.
No. of Pages: 179.
This guide has been prepared by EY Russia to give the potential investor an insight into Russia and its economy and tax system, provide an overview of forms of business and accounting rules and answer questions that frequently arise for foreign businesses. Russia is a fast-developing country and is committed to improving the investment climate and developing a better legal environment for doing business. On the one hand, this makes doing business in Russia an attractive prospect; on the other, it can make for difficult decisions both when starting a business and further down the line.
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Contents:
1. Welcome to Russia.
2. General Business Information.
- Public holidays.
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The Russian legal system.- The court system.
- Registration, certification and disclosure.
- Registration of rights in real estate.
- Corporate law LLCs vs JSCs.
- Contract law.
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The financial system. - Banking system.
- FATCA implementing legislation.
- Automatic exchange of tax information (CRS).
- Basic principles of Russian securities regulation.
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Currency control. - General principles.
- Currency control restrictions for Russian residents.
- Liability for violation of currency law.
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Competition law. - Merger control.
- Abuse of dominance.
- Anti-competitive agreements, concerted actions and illegal coordination.
- Unfair competition.
- State aid.
- Trade law.
- The Eurasian Economic Union.
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Licensing. - Permits for certain activities.
- Licenses for subsurface access.
- Environmental permits.
- Recycling requirements.
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Data protection and privacy. - Regulation of the digital sphere.
- Investment platforms (crowdfunding).
- Financial platforms (marketplaces).
- Digital financial assets (tokens) and related information systems.
- Cryptocurrency.
* Sanctions and restrictive measures. 3. Tax System.
- Tax rates.
- Penalties for late payment and tax filing violations.
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Corporate Profits Tax. - Taxpayers.
- Tax year.
- Russian legal entities.
- Rates.
- Tax base.
- Taxable income.
- Exempt income.
- Tax-deductible expenses.
- Unjustified tax benefit.
- Interest.
- Depreciation.
- Investment tax credit.
-Expenses subject to special rules.
- Loss carry-forward.
- Dividend income.
- Capital gains and losses.
- Tax reporting and payment.
- Tax accounting.
- Foreign companies operating through a branch or representative office (FLEs).
- Tax compliance requirements.
- PE risk for profits of an FLE attributable to its Russian business.
4. Real Estate Transaction Costs and Taxes Sale of real estate via an asset deal.
- Sale of real estate via a share deal.
5. Tax Control Tax audits.
- Administration of major taxpayers.
- Digital tax control.
- Tax Monitoring.
- Hot trends.
6. Value Added Tax (VAT) Taxpayers.
- Registration.
- Taxable operations.
- Place of supply of goods and services.
- Rates.
- Non-taxable supplies.
- Time of supply.
- Calculation of VAT.
- Recovery of VAT by taxpayers.
- Tax reporting and payment.
- Imported goods.
- Withholding of VAT on purchases from foreign legal entities.
- VAT on e-services.
- VAT and the EAEU.
7. Corporate Property Tax Taxpayers.
- Tax base.
- Tax rate.
- Tax reliefs.
- Tax reporting.
8. Other Taxes Excise duty.
- Transport tax.
- Mineral extraction tax.
- Additional income tax on hydrocarbon production.
- Other taxes and duties.
9. International Taxation Matters Taxation of Russian-source income of FLEs without a PE in Russia.
- Treaty relief.
- Foreign tax relief.
- MLI.
10. “Deoffshorization” Measures CFC rules.
- The concept of Russian tax residence for foreign companies.
- The beneficial ownership concept.
- Special administrative districts.
11. Tax Treatment of Company Reorganizations.
12. Customs Overview.
- Eurasian Economic Union of Russia, Belarus, Kazakhstan, Armenia and Kirgizia.
- Import duties.
- Export duties.
- Customs value.
- Customs coding.
- Customs procedures.
- CIS free trade regime.
- Free trade with other countries.
- Tariff preferences for goods originating from developing and/or least developed countries.
- Import permissions.
13. Transfer Pricing Overview.
- Scope of TP control.
- TP methods.
- Documentation requirements.
- TP audits.
- Penalties.
- Penalty relief.
- Advance pricing agreements.
- Mutual Agreement Procedure.
14. Investment Promotion Measures Special economic zones (SEZs) 125 Special investment contracts (SPICs).
- Regional investment projects (RIPs).
- Investment protection and promotion agreement (IPPA).
15. Offshore Oil and Gas Developments.
16. Financial Reporting and Auditing Sources of accounting principles.
- Applicability of IFRS for consolidated financial statements of public companies in Russia.
- Significant accounting concepts for investors.
- Disclosure, reporting and filing requirements.
17. Individuals Personal income tax.
- General 143 Who is liable?
- Definition of resident.
- Object of taxation
- Tax rates.
- Tax collection procedure.
- Capital gains and losses.
- Tax deductions.
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Immigration. - Highly Qualified Specialists (HQS).
- Submission of forecasts of foreign labor needs (quota applications).
- Work permits.
- Work visas.
- Notifications.
- Registration and deregistration.
- Sanctions for non-compliance with immigration legislation.
- Mandatory notification of second citizenship.
- Liability.
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Social security. - Exemptions.
- Social contribution rates.
- Workplace accident insurance.
- Russian labor law.
- Sanctions for non-compliance.
18. Appendices
Appendix 1: Useful addresses and telephone number.
Appendix 2: Exchange rates (as of year’s end).
Appendix 3: Treaty withholding tax rates.
Appendix 4: Blacklist of jurisdictions approved by the Ministry of Finance.
Appendix 5: Blacklist of jurisdictions approved by the Federal Tax Service.
Appendix 6: Compliance calendar 172 EY in the CIS 179.
