The Russian Tax System
The revenue enhancement system is one of the most of import levers of regulating fiscal dealingss between the province and endeavors. It is designed to supply fiscal resources for the province in order to decide economic and societal aims. The province influences upon economic behavior through the revenue enhancement inducements and fiscal countenances which are an of import portion of the revenue enhancement system. Introducing the revenue enhancements the province withdraws from endeavors their income in province ‘s favor. The financial revenue enhancement system provides a redistribution of national income and creates conditions for good governance.1
The chief job of Russian complexness of revenue enhancements and revenue enhancement was that in the Soviet Union “ society lawfully declared the building of the first province in the universe without revenue enhancements ” 2. This means that during the Soviet period, there was no scientific development in revenue enhancement. Economic reform in Russia meant the demand for revenue enhancement reform relevant theoretical surveies and the acceptance of revenue enhancement statute law. One of the jobs that were needed to be solved is to clear up the content of the class of “ revenue enhancement ” .3
The Law “ About the revenue enhancement system in the Russian Federation ” 27.12.91, N 2118 – 1, defines the basic rules of revenue enhancement. By and large, they are the same for revenue enhancement of any state and are as follows:
1. The degree of the revenue enhancement rate should be set taking into history the capacity of the taxpayer ( the degree of income ) .
2. Every attempt of the revenue enhancement of income has to be individual. Multiple revenue enhancement of income or capital is non allowed. An illustration of this rule is the replacing of gross revenues revenue enhancement into VAT where freshly created pure merchandise is taxed merely one time ( until its execution there was the rule of multiplicity of revenue enhancement payment ) .
3. Duty to pay revenue enhancements. The revenue enhancement system should go forth no uncertainty of the inevitableness of a taxpayer payment ( rule of irresistible impulse ) .
4. The system and processs for revenue enhancement payment should be simple, apprehensible and convenient for taxpayers and cost-efficient for bureaus that collect revenue enhancements ( the rule of mobility ) .
5. The revenue enhancement system should be flexible and adaptable to the altering socio-political demands ( rule of effectivity ) .
6. The revenue enhancement system should be created to guarantee the redistribution of GDP and be an effectual instrument of province policy.4
Advantages and disadvantages of Russian revenue enhancement system.
The Russian revenue enhancement system has undergone large alterations in recent old ages such as 1. Decrease of the revenue enhancement load 2. Decrease of the list of collectible revenue enhancements 3. The conditions of competition are become good by extinguishing many unneeded privileges. These steps, combined with the ruble ‘s devaluation and favorable universe market conditions for traditional Russian exports have enabled local enterprisers to get down the resurgence of Russia ‘s economic system, increased production and modernised concern. The Russian revenue enhancement system has become more competitory compared with the old period, which showed an addition in foreign investing, capital influxs into the state, non merely in trade and extractive industry.5
But at the same clip Russian Tax system is still far from be perfect.
First, Russian revenue enhancement system is lack of benefits at the entryway to the market, particularly in high engineering. Individual revenue enhancement interruptions that were made for occupants of particular economic zones and market information and telecommunication engineerings do non alter the overall image. At the same clip, most states are actively viing with Russia ; they widely use rule of revenue enhancement vacations, particularly for income revenue enhancement in the first 2-3 old ages from the beginning of a new endeavor.
Second, the revenue enhancement load is significantly high and that is peculiarly sensitive for endeavors fabricating industries. And it is non a comparing of Russian world to offshore zones with ace revenue enhancement benefits but with the major developing states.
Third, keeping an inordinate revenue enhancement load as a consequence of imposing value added revenue enhancement ( VAT ) . The current system of VAT disposal generates an tremendous and dearly-won system of answerability and leads to the claims for VAT refunds. The effectivity of the disposal remains low ; the balance of payments in the budget and the return of this revenue enhancement is deteriorating.
Fourth, there is an absence of wide pattern of supplying investing revenue enhancement credits.
Fifth, there is a deficiency of revenue enhancement inducements for voluntary pension and insurance systems.
Sixth, there are some legal barriers on a manner to market reappraisal of assets of endeavors and the growing of depreciation, because it leads to a decrease of income revenue enhancement. In the terminal, constrained by capitalisation growing companies, the existent purchase monetary value of belongings composites differ from the official 1. This leads to an increasing in its technological retardation of the economic system and non merely compare to developed states but besides compare to developing states.
Seventh, there is an absence of warrants of immutableness parametric quantities of the revenue enhancement system for the investing undertakings for a period of their recovery. These warrants on the one manus enable the State to alter the parametric quantities of the revenue enhancement system depending on the precedences of economic policy, including consideration to increase the rates of single revenue enhancements. And on the other – allows the investor to maintain revenue enhancement payments unchangeable when State takes such determinations. 6
Investing revenue enhancement recognition.
Russian Federation does non recognize the dividend imputation as a signifier of revenue enhancement inducements.
There is an investing revenue enhancement recognition as a signifier of revenue enhancement inducements and avoiding dual revenue enhancement.
Harmonizing to the Article 67 of Russian Tax Code the organisation have got an chance to cut down their revenue enhancement payments for a certain period and within certain bound followed by a phased payment of the loan sum and accumulated involvement.
Investing revenue enhancement recognition may be granted for income revenue enhancement organisation, every bit good as regional and local revenue enhancements. Investment revenue enhancement recognition may be granted for a term of one twelvemonth to five old ages.
The organisation, which received an investing revenue enhancement recognition, may cut down their payments under the relevant revenue enhancement during the term of the contract about the investing revenue enhancement recognition.
The decrease is granted for each payment in the revenue enhancement coverage period until the clip when the sum of payments which have non been paid by the organisation as a consequence of all such decreases will non became peers the amount of the loan under the investing revenue enhancement recognition understanding.
Investing revenue enhancement recognition may be granted to the organisation in the presence of at least one of the undermentioned evidences:
1 ) transporting out the organisation of scientific research or development activities or proficient re-equipment of ain industry, making occupations for people with disablements or protecting the environment from pollution by industrial wastes ;
2 ) The execution of advanced organisation and invention, including the creative activity of new or improved engineerings used, the creative activity of new types of stuffs or supplies ;
3 ) The execution of this organisation really of import order for socio-economic development of the part or the proviso of its critical services to the populace.
4 ) Performance of the organisation of province defense mechanism order.
Presently, the Russian Federation recognizes the understandings which have been concluded by the former Soviet Union and continues to carry on the plan of updating bing understandings and concludes new understandings. 7
Unless otherwise stated in the understanding on turning away of dual revenue enhancement, a foreign legal entity, non-resident is taxed at:
aˆ? 20 % – of all income, non related to activities in the Russian Federation through a lasting constitution, other than income referred to below ;
aˆ? 15 % – on income received as dividends from Russian organisations ;
aˆ? 10 % – from the usage care or lease ( charter ) of traveling vehicles or containers in connexion with international conveyance. If the commissariats of pacts on turning away of dual revenue enhancement of foreign legal entity must subject a revenue enhancement agent, income paid shows the cogent evidence that this is a foreign legal individual has lasting abode in the State with which the Russian Federation has got an understanding regulating the revenue enhancement issues.
Avoidance of dual revenue enhancement normally takes the signifier of countervailing revenue enhancement paid in other states. With regard to revenue enhancements on income of an person such a recognition is made merely with an understanding on turning away of dual revenue enhancement that contain provisions.8
In malice of different sentiments on execution of dividend imputation I agree that it is a good beginning in extent of forestalling dual revenue enhancement and encouraging investings. But in my state most likely it would non hold worked because of uncertainness of Russian revenue enhancement system. Harmonizing to the Russian Finance Ministry from 25 to 40 % of GDP is created in the informal sector, most of which are non covered by revenue enhancements and budget does non acquire from 30 to 50 % revenue enhancement every twelvemonth. 8
4 The Law “ About the revenue enhancement system in the Russian Federation ” 27.12.91, N 2118 – 1
5 A. Shokhin The Joint Platform of Russian concern on revenue enhancement 2007
7 The Russian Tax System 2010 Senator Club & lt ; hypertext transfer protocol: //www.smsr-senclub.ru/zakon/index.php? ELEMENT_ID=2190 & gt ;
8 The Russian Ministry of Finance Bulletin 2010