Russia

Business Environment

Business practices

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Closed hours and days: Banks and administrative offices are closed on Saturdays and Sundays. You find bureaux de change everywhere, and they like US dollars and euros above all. Some of them are open at weekends.
Shops and bureaux de change are open on Saturdays and until about 8pm during the week. Some are open 24/24 and 7/7.

Public holidays

New Year	1 and 2 January
Orthodox Christmas (Rojdevstvo)	7 January
Defenders of the country Day	23 February
International Women's Day	8 March
Labor Day holiday	1 and 2 May
Victory Day (Armistice 1941-45)	9 May
National Day (Russian independence)	12 June
Unity Day	4 November

Compensation day: When a public holiday falls over the weekend, the Russian authorities announce if the day will be celebrated on the preceding Friday or the following Monday.
The authorities can declare days holidays to create long weekends. These days are usually made up for on other close dates.

Periods when companies usually close

New Year	1st week of January
Labor Day	1st week of May
Summer holidays	2 weeks in July or August

Standards

National standards organizations: Federal Agency for technical regulation and metrology
Test and certification Center
Certification research institute
Institute for information on certification and quality
Integration in the international standards network: 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).
Classification of standards: GOST + 4 figures indicating the rank + 2 figures indicating the technical domain.
Online consultation of standards: On-line catalog (in Russian)
New standards (in English)
Certification organizations: List of certification organizations
GOST
Rostest USA

Legal framework

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.
Consulting national laws online: Database of the Council of the Federation (in Russian)
Kodeks

Intellectual Property

National organizations: 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).
Regional organizations: Russia is a member of the Eurasian Patent Organization.
International membership: Member of the WIPO
Signatory to the Paris Convention

Tax rates

Consumption taxes

Nature of the tax: Nalog na dobalennyu stoimost (NDS) VAT
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.

Corporate taxes

Tax rate

Federal tax	:	6.5%
Regional tax	:	17.5% (with a possible reduction of 4%)
SMEs can choose to adopt a "simplified tax system". It takes the place of Profits tax, Income tax, VAT and Capital tax.	:	6% of profits or 15% of profits less expenses

Tax rate for foreign companies

Russian legal entities are taxed on their worldwide income.
Foreign legal entities which have a permanent establishment in Russia (subsidiary, branch, agency, etc.) are taxed on the income earned by this establishment in Russia. Expenses occurred abroad by this establishment can be deducted.

Capital gains taxation

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%.

Main allowable deductions and tax credit

All expenses (with a few exceptions) are deductible if the documents confirming these expenses, even indirectly, are provided.
Since 2006, research and development expenses have been deductible up to 100% until 2 or 3 years after the end of the project.

Other corporate taxes

- Unified social tax: paid on all payments made to employees; the rate is progressive.
- Tax on personal property and real estate: the maximum rate is 2.2%; property ownership is exempt.
- Extraction tax on mineral materials: for example, 16.5% on crude petroleum from 2007.
- Transport tax: according to horsepower, the rate depends on the region.

Individual taxes

Tax rate

Tax for residents	:	13%
Tax for non-residents	:	30%
Tax on dividends	:	9%

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.

Special expatriate tax regime

There is no special regime for expatriates.

Double taxation treaties

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

Sources of fiscal information

Tax Authorities: Russian federal tax service
Other domestic resources: Federal tax service (in English); Center for deduction of R&D expenses; RosBusinessConsulting

Accounting rules

Tax year: From 1 January to 31 December.
Accounting standards: In Russia, accountancy is mainly interpreted as the rules defining the way of keeping accounts books.
It is governed by the Russian accounting standards (RAS in English), which are different from international standards.
Accounting regulation bodies: Ministry of Finance
Russian Central Bank
Accounting reports: Company annual accounts must be composed of:
- a balance sheet,
- a profit and loss account,
- notes.
Small companies can produce simplified accounts.
Publication: Only certain companies, such as insurance companies or joint-stock companies are obliged to publish their accounts (with the audit report).
Professional accountancy bodies: Russian institute of professional accountants
International association of accountants and auditors
International certification program for professional accountants (ECCAA)
Certification and auditing: Russian College of auditors, Institute of professional auditors
Accounting news: EIN News
IAS Plus