Awara Russian Tax Guide 2014 Jon Hellevig Artem Usov Anton Kabakov Moscow 2014 First Edition published, 2014 Hellevig J., Usov A., Kabakov A. Awara Russian Tax Guide / Jon Hellevig, Artem Usov, Anton Kabakov. — Awara Group, 2014. — 332 p. ISBN 978-5-00077-021-4 Awara Russian Tax Guide is the i rst comprehensive book of ering a full overview of all Russian taxation laws and rules. Awara Russian Tax Guide de scribes the general framework of the Russian tax laws, the Tax Code and its principles. It describes the general rules of the Tax Code Part I and each type of tax and tax regime of Tax Code Part II, among them: Proi t Tax, VAT, Personal Income Tax, Property Tax, Employer’s Social Contributions. h e book also covers the now so important case law and taxation principles set by court precedents. Publisher: Awara Group Bolshaya Sa dovaya ulitsa, BLD 10, 123001, Moscow, Russia [email protected] Copyright to Awara Group All rights are protected. No part of this book may be reproduced in any form without the written permission of the copyright holders. CONTENTS About the Authors . .1 1. Introduction. .5 Foreword — Russia’s Good Fortune — the Tax Reform . .5 History of the Russian Tax Reform . .5 Flat Tax Leads to Surge in Tax Revenue . .16 h e Russian Economic Miracle . .19 From Rags to Riches. .29 Mind the Gap!. .33 2. General about Russian Tax Law . .41 h e Dif erent Taxes and Special Tax Regimes . .45 Tax Reform and Court Precedents. .47 Tax Authorities . .54 Powers and Obligations of the Tax Authorities . .55 Rights and Obligations of the Taxpayers . .56 Tax Secrets . .58 3. h e Russian Judiciary . .61 Courts of General Jurisdiction . .63 h e Supreme Court . .65 Commercial Courts . .66 h e Constitutional Court . .69 h e European Court of Human Rights . .72 Justice in Russia — a Work in Progress . .74 4. Tax Registration (Incorporation) and Regional Registration of Subdivisions . .79 Russian Subsidiary Company . .81 Simple Tax Registration and Regional Tax Registration of Subdivisions . .83 Accounting and Taxation of Subdivisions . .85 Taxpayer’s Identii cation Number . .86 Obligation to Keep the Tax Inspectorate Informed . .87 5. Accounting and Audit in Russia . .89 Russian Tax Accounting . .92 Russian Accounting Standards vs. International Standards such as IFRS and USGAAP . .93 Primary Source Documents . .94 Storage of Accounting and Tax Records . .97 Audit in Russia . .97 6. Tax Audit (Tax Inspections) and Tax Disputes . .101 Cameral Tax Inspection. .101 Field Tax Inspection. .102 Requesting Evidence . .104 Audit Protocol and Resolution . .104 Tax Disputes . .105 7. Tax Of ences and Enforcement Measures . .109 Securing Measures . .109 Penalty Interest . .109 Pledge of Assets and Guarantee. .110 Bank Guarantee . .110 Freezing of Bank Accounts. .110 Seizure of Assets . .111 Establishing the Tax Due Using the Deemed Method . .111 Enforced Tax Collection . .112 Sanctions for Tax Of ences (Tax Violations). .114 Tax Of ences as per the Tax Code. .115 Tax Of ences per Code of Administrative Of ences . .116 Criminal Tax Of ences . .117 8. Double Taxation Treaties in Russia. .121 Residents . .122 Permanent Establishment . .122 Dividends. .123 Loan Interest . .123 Royalties . .124 Benei cial Owner . ..