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Tax based on cadastral value
Since January 2014 regions of the Russian Federation have been entitled to apply their own approaches to determining the tax base for specific items of real estate. Taxand Russia discusses the regions who have adopted this and the impact on non-residential property owners.
Moscow and the Moscow Region are 2 of only a few regions to have tried so far to tax commercial and office property items based on their cadastral value. It is to be hoped that executive bodies of other regions of the Russian Federation will analyse the examples of these regions before implementing their own rules.
To enjoy this right a region of the Russian Federation should approve the results of the cadastral valuation of the relevant property. If the results of the cadastral valuation have been approved, the region passes a law which actually lays down the specific approaches to determining the tax base.To ensure that the law is enforced an authorised executive body of the relevant region should draw up a list of real estate items for which the tax base is taken to equal their cadastral value and then file the list with the tax authorities and post it online.
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Also published in Thomson Reuters' Taxnet Pro, 10 July 2014
Against a backdrop of constant changes in tax legislation stability could be safeguarded by a balanced approach to determining whether a region is ready to implement property tax based on the cadastral value of real estate. Taxpayers should keep up to date on any further changes that may have an impact on the taxation of their real estate investments in Russia.