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NH Consulting will help your company to understand the complex system of the Russian tax legislation regarding such basic tax as VAT, property tax, insurance premiums, taxes on income and others.
It is often difficult to find a reliable and trustworthy accountant. With NH Consulting as your partner, you don’t have to look further.
NH Consulting is a Russian (Dutch owned) accounting firm, which follows the best international business practices. We provide accounting outsourcing services in Moscow and all over Russia.
Since 2001, we assist our clients with international standard accounting instead of soviet-style practices. We offer professional management reporting in accordance with international standards, which allows business owners and the management team to get a clear overview of their company’s current condition.
Our Russian accounting services include:
NH Consulting offers you the possibility to outsource all of your accounting in Russia. Especially for smaller and medium-sized businesses, accounting outsourcing will lead to higher cost efficiency and will enable you to focus on your core business in Russia. Accounting outsourcing includes daily bookings and preparation of documents and reports for the Russian tax and social authorities.
NH Consulting offers bookkeeping services in Russia already since 2001!
A challenge in finance in Russia is that Russian accounting and reporting is highly formalistic and bureaucratic. Tax regulations are also much more influential in Russian bookkeeping and finance systems than in Western ones. Combined with the obligation to file complete reports quarterly, the effort that needs to be put into accounting in Russia is much higher than in Western countries.
Our Russian accounting outsourcing services :
The Russian tax system is based on the first and second parts of the Russian Tax Code. Here, the taxation principles, procedures, and types of tax are standardized for the Russian Federation as a whole. Besides that Russia is involved in over 80 double taxation treaties, including the USA, UK, Japan, Singapore, Germany, Austria, Switzerland, Luxembourg, Italy, the Netherlands, Saudi-Arabia, Turkey, Iran, Egypt, India, Indonesia, Kuwait, Qatar and more.
The Russian tax system has three levels: the first federal level, second federal level, and regional level. On the first federal level, a consistent tax rate is applied to the whole of Russia. One such instance is VAT. Second-level federal tax rates are also determined centrally by the federal fiscal code, but local municipalities are entitled to reduce this by a certain amount. An example is corporation tax. Regional or local-level taxes include wealth and property tax.
Here are the most important tax types in Russia with the respective rates:
There is no need to be scared of Russian taxes or let them deter you from your project in Russia. Instead, find and choose the right business partner for such matters. You will see that Russia is also a very interesting business location for tax purposes. NH Consulting is with you all the way!
Our Russian tax services include:
NH Consulting payroll services provide a full support for companies looking to outsource the handling of their payroll accounting. Whether you have a single employee or a large scale project.
We support the payrolling for:
Through our in-house Legal Department, our support goes beyond just the technical matter of calculating salaries & taxes, provision of tax reports and underlying accounting. If needed NH Consulting is able to deliver a comprehensive turn-key solution for Payroll Outsourcing.
Unfortunately, the Russian Statutory Accounting is based on informing the tax office rather than the business owners. The standard Russian (tax) reporting does usually not provide company management with the needed financial information.
At NH Consulting however we can provide you with financial reports tailored to your individual requirements in terms of currency, language, frequency and accounting standards. Once you have provided us with the required format, we will prepare weekly, monthly, quarterly and/or yearly output accounting reports, including the reconciliation between statutory and management reports.
Our services include:
Our team creates an individual solution for your management reporting. We work closely with your finance team and our reporting consultants speak English. Once up and running, our consultants ensure in-time, correct and complete reporting which is at all times transparent.
In order to determine how companies might be affected by Transfer Pricing regulations, it is necessary to firstly determine if they are regarded as “related parties” in the context of Transfer Pricing rules. The TP legislation provides for a large list of criteria to determine if two parties are deemed to be related. In practice, the most important ones are the following:
There are some other criteria such as membership in the supervisory board of companies, etcetera. An analysis of the specific situation by NH Consulting is recommended.
The courts have the right to recognize parties as being related for reasons which are not directly foreseen by the Tax Code if the relationship between the parties may influence the conditions of performed transactions. It is important to note that even if independent companies which do not perform additional functions and do not bare any business risks faced by the related parties are included in the supply chain between the related parties, the transaction will be treated by the tax authorities as a deal between related parties and will fall under TP control. Consequently, TP regulations will be applied even if a “middle-man” is included in a transaction between the parent company and its Russian subsidiary.
The following transactions are regarded as “controlled transactions” and fall under the TP rules:
All cross-border transactions between related parties: The applicable threshold for cross-border transactions between related parties has significantly changed since 2012, when it amounted to 100m RUB. In 2013, this threshold was reduced to 80m RUB. Since 2014, the threshold has been fully abolished, meaning that all cross-border transactions between related parties are subject to TP control and that TP notification shall be prepared and may be requested by the tax authorities for all such transactions. This applies even for the smallest of transactions.
Transactions within Russia:
Domestic transactions between related parties will be controlled by the tax authorities if their amount exceeds 1bn RUB (since 2014).
Domestic transactions will not be subject to tax control if the transactions are performed between members of the same consolidated group of taxpayers or if all of the following criteria are met:
Please note: There are some ambiguities with respect to controlled transactions of permanent establishments of foreign legal entities. According to letter N 03-01-18/9-183 of the Ministry of Finance from December 2, 2012, the threshold for cross-border transactions shall be applied to transactions between subdivisions of foreign entities in Russia (permanent establishments, branches, representative offices) and affiliated Russian legal entities. It should be noted that Russian subdivisions of foreign legal entities are also Russian taxpayers, and therefore shall also prepare TP notifications and documentation. Only the allocation of profit between the foreign head office and the Russian subdivision is not yet fully subject to TP regulations. However, an amendment to the Russian Tax Code already indicates that the functions, risks and assets of a company shall be taken into account when determining the taxable income of such subdivisions in Russia. Hence, it is quite probable that the tax authorities will also, in the future, direct their attention to such expenses and income transfers. As Russia does not fully apply TP rules to the allocation of profit between foreign head office and Russian subdivisions double taxation problems might occur. Therefore careful structuring is recommended when larger projects in Russia are to be implemented via such subdivisions of foreign legal entities.
Cross-border transactions between non-related parties, including transactions with exchange-traded commodities (crude oil, petroleum products, ferrous and non-ferrous metals, fertilizers, precious metals and gemstones) and transactions with foreign entities registered in low-tax (“offshore”) jurisdictions blacklisted by the Russian Ministry of Finance, are subject to control if the income obtained under such transactions exceeds 60m RUB per year. Transactions within Russia are subject to TP controls if the aggregate income from such transactions exceeds 60m RUB per calendar year and if one party of a transaction is:
Transactions within Russia are subject to TP controls if the aggregate income from such transactions exceeds 100m RUB per calendar year, and if one party applies the unified agricultural tax or the unified imputed income tax while the other party pays profit tax under the general rules.
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