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Consolidated Taxpayer Law to be Enforced

Russia

On 2 November 2011 the Russian State Duma passed a Draft Law with amendments to the Russian Tax Code in regard to the consolidated taxpayer. The Draft law now needs to be passed by the Federation Council and signed by the President. It will then be enforced from the 1 January 2012. The draft is initially meant for very large corporations but with time it can be changed to regulate the taxation of middle income tax-payers. Taxand Russia, examines the scope of the new rules and likely effect on multinational taxpayers.

The new rules will allow business groups to become a consolidated taxpayer if:

  • the mother company owns shares directly or indirectly of more than 90% of all the companies
  • all the companies to be consolidated are Russian
  • the summary of taxes paid by the group of companies in the year before registration as a consolidated taxpayer is over 10 billion RUB
  • the summary of gross profit paid by the group of companies in the year before registration as a consolidated taxpayer is over 100 billion RUB
  • the summary value of assets the group of companies held in the year before registration as a consolidated taxpayer is over 300 billion RUB

Taxand's Take


The Draft law is going to be passed in the near future and is going to be forced from 1 January 2012. It is of great importance because it is needed to support the new rules of transfer pricing. This is a first step to the simplification of tax administration and it is hoped the Law will allow the application of the consolidated taxpayer scheme to the smaller businesses after a time.

Your Taxand contacts for further queries are:
Andrey Tereschenko
T. +7 495 967 00 07
E. a.tereschenko@pgplaw.ru

Ivan Zelenin
T. +7 495 967 00 07
E. i.zelenin@pgplaw.ru

Taxand's Take Author