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About Alinga | |
 13.05.08
Welcome from Alinga! Although Russia's newly confirmed political "tandem" of President Medvedev and Prime Minister Putin continues to promise a more liberal government, those in charge of Russia's taxation system have recently made efforts to increase that system's scope and power. Tax audits will be increased and the Tax Authorities have stated they will continue to levy more taxes from businesses even in cases where Russian courts have already established precedents in favor of the taxpayer. This makes a recent ruling that birthday presents to employees should not be taxed less a source of encouragement. It also makes more concerning a recent "suggestion" by the Ministry of Finance that "income" received by employees in the form of free food, drink, and entertainment at corporate parties be calculated and taxed as such.
This month's Alinga Market Update focuses on taxation in Russia and how it may affect you, your HR and/or legal departments. We believe that Russia will continue to be a growth market for businesses for the near future - but we believe it will also continue to offer plenty of bureaucratic snares for businesses operating there.
If you have comments, questions, or suggestions on other ways we can improve our site and newsletter, please contact the editor at jwilson@acg.ru! To subscribe to this newsletter, send an email with "Subscribe Alinga" in the subject field to jwilson@acg.ru.
There is much more "Accounting and Payroll" information available in the Russian version of this same newsletter!
If the length of a business trip exceeded the allowed maximum, the expenses for the extra time may not be deducted as business trip expenses.
Review Of Recent Changes To Tax-Related Legislation In The Russian Federation This monthly Russian-language service from Alinga and regular feature of the Alinga Market Update is designed to bring your financial personnel a broad view of recent changes to the Russian Tax Code. Forward this link to them!
Regardless of any court ruling, the FTS plans to assess additional UST in many cases (i.e. when a company pays severance or a compensation package to an employee at the time of discharge based on an agreement made with the employee.
FTS administration in Moscow has adopted a schedule of field tax audits that includes 6,403 taxpayers or 4% more than were audited during last year.
Russian and Foreign Tax Inspectors Sharing Information More Often Moscow tax inspectors are more often consulting foreign tax authorities. Last year they requested information from foreign tax authorities 764 times, a 10 percent increase from the year before.
VAT For Transaction With Foreign Company To Be Paid By Agent The Ministry of Finance explained how to calculate VAT for transactions with foreign companies conducted through Russian agents.
Bank Credit From A Swiss Bank: How To Pay Taxes On Interest? Many find that borrowing money from foreign banks is a much better deal than working with Russian credit organizations. However, it leads to certain technical difficulties.
Foreign Shipping Agents Are Tax-Vulnerable Tax regulations are harsh on foreign shipping agents in Russia. At least, for those based in Poland, Belarus, and Germany.
Recognition Of Expenses During Reorganization For tax purposes these expenses are calculated under the methods prescribed in and subject to the conditions of Chapter 25 of the TC.
The Ministry holds the same position as in its previous letters: according to article 149 of the TC, giveaways (for promotional purposes) of goods or services which have a production or sale price not exceeding 100 RUR are officially tax exempt and have been since 2006.
MinFin Refuses Taxes Paid Abroad A Russian organization had performed construction services through a separate subdivision on the territory of a foreign country, including paying taxes in that country. However, the Russian Ministry of Finance does not see any grounds for recognizing taxes paid in another country as expenses for calculation of profit tax.
This article from the International Journal for Not-for-Profit Law looks at challenges faced by civil society in several countries, including Russia.
Customs Opens Five More "Green Lines" On April 29, 2008 the number of "green lines" at Russia's border crossings, marine (river) ports, and airports was increased from 33 to 38.
The Federal Migration Service of Moscow has doubled the number of their inspections, and they are dealing out harsher fines.
How To Extend An Employment Contract To bring valid changes to the labor contract, the additional agreement must comply with several conditions.
The aid money allocated by the federal budget for 2008 – 1.5 billion rubles – will be distributed as grants "for the realization of socially significant projects."
Adding Transparency To NGOs: Public Reports Suggested A new draft bill submitted to Russia’s State Duma suggests amendments to the federal laws “On Non-Profit Organizations” and “On Public Associations.”
Find Job Vacancies Here Find Employees Here
Foreign Labor "Reserve" to be Enacted This reserve quota will give a very brief window for obtaining your future company quotas. Please take note that when applying for new quotas, companies should not limit their applications to those coming to Russia in the near future, but also should apply for those employees whose work permits will expire in the coming months.
Permanent Employee May Also Work On Labor Agreement With His Employer Payments made to staff employees based on civil labor contracts are legitimate and may be viewed as production cost expenses for tax purposes if the taxpayer can confirm the economic justification of these expenses.
Tax Consequences of Corporate Parties Corporate parties are famous for their unforeseen consequences, but now the tax authorities have added one more.
Workers On Business Trips May Sleep Where They Like The court declared that workers on business trips have the right to stay in any living quarters -- not just in hotels.
Holding Companies Using Outsourcing An organization had outsourced personnel services to other organizations an contract basis. Tax inspectors discovered that many of the ‘recent hires’ were actually already employed with the other companies in the same holding.
Birthday Gifts For Employees Are Not Subject To UST The court pointed out that material incentives such as birthday gifts are not covered by legislation.
Review of Russian Economic News in English This review is produced monthly by the US-Russia Chamber of Commerce of New England (USRCCNE). Alinga Consulting Group is a USRCCNE member.
Residence Permit Is Not Sufficient For Tax Residency A residence permit does not confirm the actual amount of time spent by its holder in the country.
Interview with Doug Mow of Exigen Services "The way I look at it, no country or region can sustain the low cost position for very long. Look at the inflation they have in India and look at all the new and emerging locations that are offering cheaper rates. And it happens in every industry. So if one were to accept this inevitability, you are going to have to build the value proposition on something else."
Russian Cities: St. Petersburg This article by ACG partner company The School of Russian and Asian Studies details St. Petersburg, which is currently hosting one of Russia's special economic zones for innovation.
The State Of The Russian Economy Russian Analytical Digest recently focused on the Russian Economy. The journal offers a wealth of macro-economic analysis.
Putin called for lower taxes on the oil industry, which has complained that excessive duties are crippling its ability to boost production, but gave no details.
Ruble Cubed? Putin Puts Medvedev in Dilemma on Prices The world's biggest banks are advising their clients to load up on rubles in a bet that one of the first things Dmitry Medvedev may do after he's sworn in as Russia's president this week is to allow a stronger currency.
Russia's Aluminium Oligarch Prefers Hong Kong to London Listing Russia's richest man, Oleg Deripaska, yesterday gave his strongest indication yet that he intends to float his multi-billion dollar aluminium business in China rather than on the London Stock Exchange.
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