Social security (insurance) contributions
All business units registered in Russia are required to make contributions with respect to their employees and contractors. Remuneration, bonuses, and other income paid in cash and in kind accrued by an employer in favour of employees, as well as remuneration paid under civil law contracts for provision of works/services and copyright agreements, are included in the taxable base. The tax is calculated with respect to remuneration of each individual. The insurance contributions to social funds are the liability of the employer only; employees are not liable to make any contributions.
From 2012, a regressive scale with an uncapped level of certain contributions was introduced.
Pension Fund contributions: Earnings of each employee are subject to a 22% rate within RUB 1,150,000 per annum in 2019. The remuneration paid in excess of this threshold will attract an additional 10% top upcharge.
Social Insurance Fund contributions: Earnings of each employee are subject to a 2.9% (1.8% for foreign nationals temporarily staying in Russia) rate within RUB 865,000 per annum in 2019. Earnings above the cap are not subject to contributions. Social Insurance Fund contributions are not payable with respect to remuneration paid under civil law contracts.
Medical Insurance Fund contributions are not capped. The applicable rate is 5.1%.
Note that a favourable regime has been established for qualifying businesses.
All individual entrepreneurs, private attorneys, and notaries registered in Russia, who are not employers, are obligated to make contributions with respect to themselves.
Employers are also obligated to pay a contribution of insurance against accidents at work and work-related diseases. The rate of this contribution varies from 0.2% to 8.5% of the wage fund, depending on the type of activity of the employer.
Tax on professional income
As of 1 January 2019, a new experimental tax regime was introduced in 4 regions of Russia: Moscow, Moscow region, Kaluga region and Republic of Tatarstan. It is available to Russian citizens and citizens of countries – member of Eurasian Economic Union (Belarus, Kazakhstan, Armenia and Kyrgyzstan).
“Professional income” includes income from activities in which individuals do not have an employer nor employees under employment contracts (e.g. tuition fees, rental income). Income taxable under this special regime is limited to RUB 2,400,000. Extra income is taxable on regular basis depending on status of individual.
If services are rendered for individuals, the tax rate is 4%. If services are rendered for legal entities or individual entrepreneurs, the tax rate is 6%. Tax is payable on a monthly basis. Individuals paying tax on professional income are not obliged to pay personal income tax and/or social insurance contributions.
Individuals and individual entrepreneurs may switch to this special tax regime and communicate with the Russian tax authorities via special app.
Starting from 1 January 2019, the standard value-added tax (VAT) rate is 20% (with a lower rate of 10% for certain basic foodstuffs, children's clothing, medicines and medical goods, and printed publications).
Net wealth/worth taxes
There are no net wealth/worth taxes in Russia.
Inheritance, estate, and gift taxes
Inheritance and gift tax was abolished in Russia as of 1 January 2006; however, PIT may be payable by individuals receiving property by way of gifts, depending on the type of the property and its source. In case of a gift, PIT is generally payable with regard to the market value of gifts received from companies or organisations by individuals. With regard to the gifts received from individuals, taxable income includes houses, apartments, country houses, vehicles, certain securities, and units of investment funds, with an exemption for transactions between close relatives (i.e. spouses, parents and children, grandparents and grandchildren, brothers and sisters). An inheritance is exempt from tax, with an exception applying to payments made to heirs in relation to an author’s remuneration for inventions, arts, etc.
Taxes on property
Taxes on property are payable on the basis of notification issued by tax authorities. Starting from 2015, a taxpayer is obligated to inform tax authorities on the owned property if one has not received the respective notification.
Property tax is imposed on property located in Russia and owned by Russian and foreign individuals. The tax applies to buildings, houses, and apartments and is levied at the rate of 0.1% to 2% of the value of the property.
Individuals owning or using land in Russia are subject to land tax. Rates of tax vary depending on the location and the quality of the land.
Transport tax is imposed on cars, motorcycles, buses, vans, planes, helicopters, yachts, boats, ships, and other water, air, and land transport registered in Russia and owned by Russian and foreign individuals. Fixed rates (per unit of horsepower, gross ton, or unit of transport), which are differentiated based on the engine capacity, gross tonnage, and type of transport, are applied.
Luxury and excise taxes
Excise taxes apply to the production and import of cars, tobacco, alcohol, petrol, and lubricants. Special excise rates for each type of excisable goods are established in the tax code. The rates are widely variable and are based on multiple factors.