Types of taxes in Russia:

Federal taxes — VAT, corporate income tax, excise taxes, subsoil tax, water tax
Regional taxes — property tax, transport tax, gambling business tax
Local taxes — land tax and retail tax

Other kinds of taxes and fees may apply, depending on the region, type of business and company assets. Some products such as cigarettes, alcohol, etc., are subject to excise duties.

Social contributions and personal income tax

Social contributions to the Social Fund of Russia are accrued to the employee's salary and are paid at the expense of the employer.

Basic rates of social contributions:

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* The subject of personal income tax is the employee, but the tax is to be paid by the company. Some specific types of income as (such as lottery prizes) may be subject to different tax rates.
** Tax residency is determined by the duration of stay in the Russian Federation during the last 12 months — a resident is a person who stays in Russia for a total of more than 183 days during the year.

Some companies apply preferential contribution rates.

In addition, the employer shall pay occupational accident insurance in the amount of 0.2% to 8.5%, depending on the type of company activity. For the majority of companies providing services or selling goods, the fee amounts to 0.2%.

Simplified tax system (STS)

Companies using STS are exempt from VAT (not including import VAT) and corporate profit tax.

STS is available for companies which meet the following criteria:

company is at least 75% owned by individuals
annual income does not exceed 188 mln RUB
fixed assets values does not exceed 150 mln RUB
company staff includes no more than 100 employees
company has no branches

In addition, the company may choose one of two STS options:

15% of income minus expenses (but not less than 1% of revenue) (for Moscow; each subject of the Russian Federation has the right to determine the rate independently in the range from 5 to 15%)
6% of income (for Moscow; each subject of the Russian Federation has the right to determine the rate independently in the range from 1 to 6%)

Companies, that have exceeded the limits retain the right to use the simplified tax system if:

annual income in the range of 188–251 mln RUB *
company staff in the range of 100–130 employees

In this case, increased tax rates are applied depending on the STS regime:

20 % of the difference between income and expenses
8 % of income

Automated simplified taxation system (ASTS)

The tax authorities strive for maximum transparency and automation of interaction with companies.

Automatic tax calculation is available in several regions of Russia (incl. Moscow), to companies that meet the following criteria:

At least 75% of the company is owned by one or more individuals
Annual income not exceeding 60 mln RUB
Value of fixed assets not exceeding 150 mln RUB
No more than 5 employees, all employees are tax residents of the Russian Federation
The company has no branches
Settlement accounts are opened only in authorized Russian banks
Salary is paid only non−cash

Companies can choose one of two ASTS variants:

20% of the difference between income and expenses (but not less than 3% of income)
8% of income

ASTS and PIT are calculated by the tax authority and the bank itself. With some exceptions, no tax declarations are required.

Tax benefits for small and medium enterprises (SME)

SMEs included in the Federal Tax Service's register of small and medium-sized businesses and accredited IT companies benefit of special government support

Main tax benefits for SMEs:

Reduced rate of insurance contributions — 15% on incomes exceeding the minimum wage (instead of ~ 30%)
Possibility to conclude fixed−term employment contracts with a staff of up to 35 people, for the retail sector — up to 20 people
Mitigation of punishment for administrative violations
Priority rights in state tenders
Simplified accounting regulations and personnel document management, etc.

Conditions to be included into the SME registry

Automatic inclusion in the registry is provided for companies that have:

annual turnover up to 2 bln RUB
number of employees up to 250 people
more than 51% of the company is owned by individuals or SMEs (there are exceptions for this criterion)

A company with foreign participation can also obtain the status of an SME if the foreign shareholder also meets the criteria for revenue and headcount and is not registered in an offshore zone.

These facts must be confirmed by an independent auditor who checks the data and sends it to the Federal Tax Service.

The register is updated monthly, while information on foreign participants must be confirmed annually.

Benefits for the IT sector

The following benefits are available to IT companies that have passed accreditation:

No scheduled inspections by state agencies until the end of 2024
Deferment from military service, preferential loans for employees of certain specialties
Simplified procedure for employment of foreign specialists
Aggregate insurance premium rate of 7.6% (instead of ~ 30%)
Income tax rate of 0% (instead of 20%)

Due to the fact that the legislation in the IT sphere is regularly updated, we recommend to re−specify the latest criteria for benefits application.

The Russian-Asian Union of Industrialists and Entrepreneurs (RAUIE) has been helping foreign companies to develop business with Russia since 2010. To start cooperation with Russia with the support of the RAUIE you can leave an application via the "ask a question" form on the website, or by email office@raspp.ru.

Our experts will help you develop your business with Russia not only in export but also in import, namely to find a direct manufacturer in Russia and conclude a deal with him on the supply of products to China or start your investment project in Russia for the production of agricultural or food products for export to China, including obtaining government incentives for the investor in Russia.

The article was prepared by experts from Bellerage, a member of the Russian-Asian Union of Industrialists and Entrepreneurs

Important to know

Important to know