Accounting and tax

accounting and tax planning in Russia

  1. Healy Consultants Accounting Department will assist our Clients efficiently and effectively discharge their annual accounting, taxation and auditing obligations in accordance with the Russia corporate law. This is what our Clients need to know about the business services in Russia: The taxation system in Russia is a simplified one;
  2. Capital gains tax is 20%;
  3. The standard VAT rate in Russia is upto 18% and the corporate VAT returns must be filed quarterly with the exemption to those companies whose revenue is less than US$575,530 in the previous 3 months;
  4. Russian tax law allows business losses to be carried forward indefinitely;
  5. Dividends from a foreign entity will be tax-exempt only if all of the following conditions are met i) the Russian company owns at least 50% stake in the foreign entity, ii) the shares are held for at least 1 year and iii) the foreign country is not blacklisted as a tax haven;
  6. Dividends to a Russian resident firm will be taxed at 9%, while dividends paid to non-resident firm are taxed at 15%;
  7. Royalty payments and interest payments to another Russian-resident business entity are tax-exempt, while payments to a non-resident entity are subject to withholding tax of 20%;
  8. Property in Russia is taxed annually up to 2.2% of the value;
  9. Annual tax returns must be filed by the 30th of April, every year and final date to pay your taxes is 15th July. A penalty of additional 20% of the tax amount is charged on delays;
  10. There are no exchange controls imposed on repatriation of funds to a non-resident business;
  11. Employers in Russia are required to make
    • Contributions to the Social Insurance Fund: Only the first US$12,400 (RUB 815,000) of salary is taxed (at a rate of 2.9%);
    • Contributions to the Pension Fund: The first US$ 15,500 (RUB 1,021,000) is taxed at 22%, and the excess is taxed at 10%;
    • Contributions to the Medical Insurance Fund: A 5.1% rate applies to the total salary.
  12. Russia has signed double taxation avoidance agreements (DTAAs) with 83 countries including Australia, China, India, Germany, Singapore, USA and UK to reduce withholding taxes on foreign payments;
  13. Healy Consultants Group PLC will assist the Client with a complete guide to the Russian corporate tax and accounting system including i) documenting and implementing accounting procedures ii) implementing financial accounting software iii) preparing financial accounting records and iv) preparing forecasts, budgets and performing sensitivity analysis;
  14. It is important our Clients’ are aware of their personal and corporate tax obligations in their country of residence and domicile including accounting practices in Russia; and they will fulfill those obligations annually. Let us know if you need Healy Consultants’ help to clarify your annual reporting obligations.

Legal and compliance

Company regulation

  • All Russian Federation companies are required to maintain a registered office address within the country;
  • The standard VAT rate in Russia is 18% and the corporate VAT returns must be filed quarterly. However, an exemption is provided to companies whose revenue is less than US$575,530 in the previous 3 months;
  • Foreign companies can verify the legal standing and company details with the Federal Register. Consequently, information available for viewing to residents and non-resident include i) business name, registered address and legal standing; ii) names and details of the shareholders and directors; iii) the total amount of paid up share capital;
  • The minimum share capital required in Russia is i) RUB10,000 (US$130) for a limited liability company (OOO); ii) RUB10,000 (US$130) for a joint stock company which is not planning to get listed and iii) RUB100,000 (US$1,300) for a joint stock company which is planning to get listed. The full amount of the company’s share capital must be paid up before company setup;
  • Annual financial statements for both private and joint stock companies must be filed in accordance to accounting rules in Russia which is the Russian Accounting Standards (RAS), which substantially differ from IFRS.

Staff regulations

  • All employment contracts must be translated into Russian. Non-Russian speaking employees must also be provided with a contract copy in a language they can understand;
  • In accordance with the Russian Federation Labour Code the period of probation may not exceed three months, except for heads of i) legal entities; ii) branch offices or iii) chief accountants. However, pregnant women are not subject to probation period;
  • Minimum wage in Russia increased to US$170 (RUB 11,163) per month on 1st May 2018;
  • The standard working week is i) fixed at maximum 40 hours of work in a five or six day working week and ii) All employees are entitled to
    • At least 280 days of paid annual holidays per year of employment;
    • 12 days of national holidays and;
    • No minimum amount of sick leave;
    • 70 days prior and 70 more after childbirth.
  • Employers are entitled to suspend employment contract with a minimum notice of two weeks in case of i) serious material violation; ii) continuous non-performance of employment obligations and iii) if work is performed in clear violations to Russian Federation Labour Code;
  • In case of labor conflicts, The Federal Labor Inspection is the authority to settle the dispute;
  • All employees in the Russian Federation are required to have a Labour Book containing records of the employee work history.

Other business regulations

Contact us

For additional information on our accounting and tax services in Russia, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Mr. Vladislavs Grekis, MICA, directly:
Consultant at HC - Vladislavs
cpa russia Russia government website Central Bank of Russian Federation Russia federal customs service world trade center moscow