Recent changes in Russian tax
laws will affect foreign companies. On March 31, 1999, the President signed
Federal Law No. 62-FZ "On Amendments and Additions to the Law of the
Russian Federation on Tax on Profits of Enterprises and
Organizations." The changes to the
Corporate Profits Tax provide for three
types of change. First, it reduces the profit tax rate for most foreign
companies from 35% to 30%; the tax rate on profits for intermediary activities,
banks and insurance goes down from 43% to 38%; and the fixed federal profit
rate declines from 13% to 11%. Secondly, tax registration and profit tax
requirements for foreign companies will be the same as for Russian companies.
There will be quarterly profit declarations and monthly tax payments (the
Ministry for Taxes and Levies issued an explanatory letter on this on June 28,
1999). Finally, the Law creates new tax exemptions, for example, for new
production facilities with an investment of more than 20 million rubles. — The
same day, the President signed Federal Law No. 64/FZ "On Amendments and
Additions to Individual Legislative Acts of the Russian Federation on Taxes." The changes to the VAT Tax Law make foreign
companies, regardless of their legal form, responsible for VAT payments.
Foreign companies must withhold VAT from payments to foreign legal entities not
registered in Russia for VAT purposes. — The laws entered into force on April
1, 1999. Citation: Russian Federation, Laws Nos. 62-FZ and 64-FZ,
published in Rossiyskaya Gazeta of April 7, 1999. [The information on
Amendments to Russian Tax Legislation was prepared by US & Foreign
Commercial Service in Russia and distributed by U.S. Department of Commerce,
BISNIS, Phone: (202) 482-2022.]
**** Mr. Richard Ehrlich is a specialist in Corporate, Estate and Personal Financial Planning in Florida. In the course of his career, he has prepared hundreds of estate plans and helped hundreds of small businesses navigate the various issues involving insurance, retirement and employee retention. He has helped numerous families deal with the difficulties of taking care of elderly relatives and assisted with all of their long-term planning and long-term care needs. Finally, he has helped investors with their losses in unsuitable investments. LinkedIn Profile: https://www.linkedin.com/in/richard-ehrlich-777b513/; Attorney Profile: http://www.eldercounsel.com/profile/richard-ehrlich-ehrlich-law-center-pa/; Attorney Profile: https://solomonlawguild.com/richard-ehrlich%2C-esq; Attorney News: https://attorneygazette.com/richard-ehrlich%2C-esq#c35a1098-f039-43ab-b0dc-06cff6dabf61
