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Russia

Taxes

If you want to set up a company in Russia, this article will educate you on the tax laws for a LLC (or OOO), which is the most common company structure in Russia.

Russia taxes resident entities on their worldwide income. The prevailing tax rate for offshore income, from our research, but seek professional advice, is 20%. The country may have exemptions to remit certain income earned abroad made internationally. Taxes are reasonable in Russia because the rate which LLC (or OOO) will pay tax is 20%. Reduced rates may apply for certain qualified investments. Russia ranks 70th overall in terms of corp. taxation rate internationally.

The valued added tax rate in Russia is 18.00%, that ranks Russia as 63rd when compared to VAT globally. In terms of other taxation, an employer may contribute a maximum of 38.5% to the equivalent of a social security fund and an employee will not be required to contribute. The overall complexity of the tax system is high. This is measured by average time to comply with a country's labor tax requirements is as it is 168hours. Contributing to this is the number of yearly labor tax payments, which is 23 in RU.

Thin cap standards are in effect. This refers to any sort of laws on given company with respect todebt-to-asset ratios.
Dividends from resident companies and foreign entities are taxable income, and taxed at a flat rate of 13%. However, an exemption may apply, if the Russian beneficiary holds at least 50% of participation of paying company for at least 365 days in a calendar year, and the paying company is not resident in a black-list jurisdiction. Dividends are payments of company profits, established by the board of directors, to a class of its shareholders. Dividends can be issued as shares of stock, cash payments, or other property.
Capital Gains are subject to CIT at a rate of 20%. However, an exemption may apply for those from the sales of shares held for at least 5 years of unlisted Russian companies and high-technology listed companies. A capital gains tax is levied on the profits that a corporation or natural person realizes when he or she sells sells a capital asset for a price that is higher than the purchase price.

The interest withholding tax rate is estimated at 20%. This should be interpreted that the tax authorities expects relevant legal entities to withhold 20% of interests paid offshore. The dividends withholding tax rate is 15%. This means that the taxman expects LLC (or OOO)'s to pay tax on 15% of dividends remitted abroad. The royalties withholding tax rate 20%. This should be interpreted that the taxman expects legal entities to withhold 20% of royalties remitted abroad. Withholding tax rates may be reduced under a tax treaty.
There is no known tax on wealth in Russia. There are no known inheritance and transfer taxes. There is a real property tax. There are commonly used credits for innovation spend that include tax relief in RU.

The above is not tax or legal advice for your particular facts and circumstances. We can refer you to a lawyer in Russia who can give you the proper advice and help you need. Want to work together? Click the free consultation button above.

Country details

Russia
RUB
Moscow
Europe
Russian, tt, xal, cau, ady, kv, ce, tyv, cv, udm, tut, mns, bua, myv, mdf, chm, ba, inh, tut, kbd, krc, ava, sah, nog
140,702,000

Tax treaties

Country Type Date Signed
New Zealand DTC  2000-09-05
South Africa DTC  1995-11-27
United Kingdom DTC  1994-02-15
Mongolia DTC  1995-04-05
India DTC  1997-03-25
Montenegro DTC  1995-10-12
Latvia DTC  2010-12-20
Spain DTC  1998-12-16
Korea, Republic of DTC  1992-11-19
Canada DTC  1995-10-05
Belarus DTC  1995-04-21
Ireland DTC  1994-04-29
Iceland DTC  1999-11-26
Ethiopia DTC  1999-11-26
Philippines DTC  1995-04-26
China DTC  1994-05-27
Cuba DTC  2000-12-14
Chile DTC  2004-11-19
Luxembourg DTC  1993-06-28
Austria DTC  2000-04-13
Former Yugoslav Republic of Macedonia DTC  1997-10-21
Lao People's Democratic Republic DTC  1999-05-15
Malta DTC  2013-04-24
Belgium DTC  1995-06-16
Czech Republic DTC  1995-11-17
Kyrgyzstan DTC  1999-01-13
Thailand DTC  1999-09-23
Kuwait DTC  1999-02-09
Hungary DTC  1994-04-01
Moldova, Republic of DTC  1996-04-12
Denmark DTC  1996-02-08
Japan DTC  1986-01-18
Korea, Democratic People's Republic of DTC  1997-09-26
Tajikistan DTC  1997-03-31
Qatar DTC  1998-04-20
Sri Lanka DTC  1999-03-02
Indonesia DTC  1999-03-12
Ukraine DTC  1995-02-08
Netherlands DTC  1996-12-16
Argentina DTC  2001-10-10
Saudi Arabia DTC  2007-02-11
Armenia DTC  1996-12-28
Greece DTC  2000-06-26
Oman DTC  2001-11-26
Mexico DTC  2004-06-07
Lebanon DTC  1997-04-07
Venezuela DTC  2003-12-22
Poland DTC  1992-05-22
Georgia DTC  1999-08-04
Croatia DTC  1995-10-02
Finland DTC  1996-05-04
France DTC  1996-11-26
Sweden DTC  1993-06-15
Cyprus DTC  1998-12-05
Norway DTC  1996-03-26
Albania DTC  1995-04-11
Brazil DTC  2004-11-22
Botswana DTC  2003-04-08
Serbia DTC  1995-10-12
Israel DTC  1994-04-25
Morocco DTC  1997-09-04
Slovenia DTC  1995-09-29
Viet nam DTC  1993-05-27
Egypt DTC  1997-09-23
Germany DTC  1996-05-29
Azerbaijan DTC  1997-07-03
Bulgaria DTC  1993-06-08
Syrian Arab Republic DTC  2000-09-17
Uzbekistan DTC  1994-03-02
Algeria DTC  2006-03-10
Switzerland DTC  1995-11-15
Mauritius DTC  1995-08-24
Slovakia DTC  1994-06-24
Estonia DTC  2002-11-05
United States DTC  1992-06-17
Kazakhstan DTC  1996-10-18
Portugal DTC  2000-05-29
Turkmenistan DTC  1998-01-14
Romania DTC  1993-09-27
United Arab Emirates DTC  2011-12-07
Turkey DTC  1997-12-15
Namibia DTC  1998-03-31
Australia DTC  2000-09-07
Singapore DTC  2002-09-09
Lithuania DTC  1999-06-29
Malaysia DTC  1987-07-31
Mali DTC  1996-06-25
Iran DTC  1998-03-06
Italy DTC  1996-04-09

Tax treaties Map

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Disclaimer

Although we use our best efforts to keep the information of this site accurate and up-to-date, we make no representations or warranties with respect to the accuracy, applicability, fitness, or completeness of the contents of this website. We disclaim any warranties expressed or implied, merchantability, or fitness for any particular purpose. We shall in no event be held liable for any loss or other damages, including but not limited to special, incidental, consequential, or other damages. The contents of this website are just for illustrative purposes and are NOT to be considered as a legal opinion or tax advice and should not be relied upon as such. Far Horizon Capital Inc., and any associated company, is not engaged in the practice of law or tax. If you wish to receive a legal opinion or tax advice on the matter(s) in this website please contact our offices and we will refer you to an appropriate legal practitioner. Use of our websites FlagTheory.com, Incorporations.io, Residencies.io, Passports.io, is subject to our terms and conditions.

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