Further to the budget message of the President of the Russian Federation, the Government has adopted the main direction in tax policy for the upcoming three years. The document is intended to inform individuals and companies on the tax reforms already implemented as well as the planned changes to Russian tax legislation as follows:

Change to insurance contribution rates

The rate of insurance contributions will be decreased from 34% to 30%. The basis for calculating insurance contributions in 2012 will be RUB 512,000 (approx. EUR 11,785) per employee and will increase to RUB 567,000 (approx. EUR 13,050) per employee in 2013. Amounts in excess of this will be taxed at a 10% rate.

Small- and medium-sized enterprises will be taxed at a rate of 28%.

Increase of excise duties

In 2014, the rates of excise duties on tobacco and alcohol will be increased. For example, excise duties for alcohol will increase more than two times:

  • alcoholic beverages up to 9% per volume will increase from RUB 231 (approx. EUR 5.30) to RUB 500 (approx. EUR 11.50) per litre of spirit; and
  • alcoholic products exceeding 9% per volume will increase from RUB 190 (approx. EUR 4.37) to RUB 400 (approx. EUR 9.20) per litre of spirit.

Cancellation of the single tax on imputed income

In 2012, a new simplified tax regime will be introduced based on a certificate (patent).

Starting from 2013, retail and catering companies (with salesrooms not exceeding 150 square metres) will not be able to take advantage of paying a single tax on imputed income. This tax regime will be completely cancelled in 2014.

Introduction of a real estate tax

In 2014, a local tax on real estate owned by individuals and companies will be introduced. The following real estate will be taxed:

  • real estate property qualified as housing stock and relevant land plots;
  • garages and relevant land plots; and
  • dacha (country house) and garden plots.

The basis for calculating the real estate tax will be the cadastral value of real estate. Mass cadastral evaluation will be completed by the end of 2012. The real estate tax rate will be 0.1% – 1%.

To date, most of the draft laws on the above matters have not yet been developed and introduced to the State Duma.

[Primary direction of the tax policy of the Russian Federation for 2012 and for the planning period for 2013 and 2014 (please see the link to the Russian text: http://www.consultant.ru/law/hotdocs/14569.html)]