Russia-Business Environment

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Published: 06 Oct 2008 17:47:25 PST

Standards

Domestic framework and international association: Russia is a member of the International Standards Organization (ISO), the International Electrotechnical Commission (IEC), the International Telecommunication Union (ITU), the International Organization of Legal Metrology (OIML). It is a signatory to the Metre Convention and an affiliated member of the International Laboratory Accreditation Cooperation.
In the framework of the CIS, Russia is an integral part of the EuroAsian Council for Standardization, Metrology and Certification. It is also a member of the European Organization for Quality, and of COOMET (EuroAsian Cooperation of National Metrological Institutions).

Independence of justice: Judicial power in Russia is not independent. It suffers from corruption, lack of funds and qualified personnel.
Equal treatment of nationals and foreigners: Foreigners cannot expect an impartial hearing in judicial matters.
The language of justice: Russian
Having recourse to an interpreter: Possible
Sources of the law and legal similarities: The main source of the law is the Constitution of December 1993. The country's judicial system is based on a system of civil law and judicial reviews of various legislation.

Domestic network and international agreements: The Russian Federal instrument for the protection of intellectual property is the Russian Patent &Trademark Office.
Given the risks of pirating in Russia, it is imperative to register with the register of trademarks to ensure protection ( be careful: judicial procedures in the country are very slow).

Type	Text	Date entered into law	Period of validity	Remarks

Tax rate: 18%
Reduced tax rate: The reduced rate of VAT in Russia is 10% and mainly concerns foodstuffs and children's clothes.
Other consumption taxes: There are excise duties on many luxury goods, in particular on cars, motorbikes, alcohol and tobacco.

Tax rate for resident companies: 6.5%
Tax rate on long-term capital gains: Long term capital gains are considered in the same way as other income and taxed at the same rate as Corporate tax, i.e. between 20% and 24%.
System governing groups of companies and dividends paid by subsidiaries to their parent companies: In Russia, a 15% withholding rate applies if either the recipient or the payer of the dividends is a foreign legal entity.
Tax rate on branches: Branches are imposed on the corporate tax at a rate between 20% and 24%.

Tax rate: 13%
Allowable deductions and tax credit: The following expenses can be deducted:
- donations to recognized institutions (up to 25% of income)
- expenses relating to the education of a family member (up to a certain limit)
- for a dependent member of the family (up to a certain limit)
- contributions to a supplementary retirement scheme (up to an annual limit)
- medical expenses (up to 28 000 roubles)
- the purchase of real estate (deductions up to 1 million roubles a year)

The following income is exempt from tax: sale of living accommodation or another good owned for more than 3 years, interest earned on deposits made to Russian banks under certain conditions, grants, retirement pensions or disability benefit.

Countries with whom a double taxation treaty have been signed: List of treaties signed by Russia with links to texts

Tax year: From 1 January to 31 December.
Accounting standards: Company annual accounts must be composed of:
- a balance sheet,
- a profit and loss account,
- notes.
Small companies can produce simplified accounts.
Accounting reports: Only certain companies, such as insurance companies or joint-stock companies are obliged to publish their accounts (with the audit report).
Accountancy profession: The term accountant is generally applied to those working inside the company. Outside contributors are called auditors.
Due to the importance of the State in the accounting system, accountants' associations are having difficulty getting organized. At the present time, they are trying to federate under the aegis of the Eurasian Council of Certified Accountants and Auditors (ECCAA) to organize a certification program.
Certification and auditing: Russian College of auditors, Institute of professional auditors