The Russian economy continues to face challenges from restrictive trade sanctions by the EU Council, which have been extended to January 31 2018. Sectors such as finance, energy and defence in particular are suffering from the prolonged sanction regime in place since 2014.
Other factors contributing to the environment of uncertainty are global oil price dynamics and Russia's upcoming presidential election in 2018. With both the rouble and oil prices under pressure, revenue from tax collection has dramatically increased in importance for the government.
"Russia is under sanctions and we must ensure that revenue is collected. Tax officials' competency is improving and they are skilled," said Clara Vorobieva, head of FinExpertiza.
"The most important point is to get Russian tax in line with international standards. We are coming closer to them, which is new for us, but not the rest of the world," said Alexander Golikov, head of tax at BGP Litigation. "Russian tax administration is improving. We as tax advisers have been very busy in this respect."
The country plans to increase the proportion of corporation income tax (CIT) revenue assigned to the federal budget for public expenditure from 2% to 3% in 2017, until 2020. This means there will be a decline in CIT income allocated to constituent regions, from the current 18% to 17%.
Regions in Russia could also lower their CIT rates to 12.5% in the future to encourage investment, which could reduce the minimum tax rate to 15.5%.
The finance department will increase VAT from 18% to 22% in January 2019, which assists in funding the cut in employee tax rates from to 30% to 22%.
"[The] Russian authorities have developed their position," said Vorobieva. "They are more formalised. Federal tax magistrate clients are afraid to get into disputes. The authorities have introduced a system covering all invoices of VAT into [the] system. It is very transparent and checked on input and output."
A digital VAT bill implemented from January 2017, covers sales to Russian consumers of electronic services from foreign providers. VAT is now applied at a rate of 18%; foreign providers must register as non-resident tax payers; reports must be filed quarterly; and the reverse charge will be applied to business-to-business suppliers, with no VAT paid by the foreign provider.
Samotechnaya str. 7 build 2
Phone: +7 916 733 39 83
Main areas of focus:
Corporate Tax, Mergers & Acquisitions, Transfer Pricing, International Tax & Permanent Establishments, Indirect Tax, Customs, Private Clients, Global Mobility, Tax Controversy, Tax Technology
Ernst & Young
Sadovnicheskaya nab. 77
Tel: +7 495 755 9700
CIS/Russia Tax Leader
Tel: +7 495 705 9738
Business Tax Services Leader
Tel: +7 495 755 9687
Global Compliance and Reporting Leader
Tel: +7 495 755 9838
Indirect Tax Leader
Tel: +7 495 664 7860
International Tax Services Leader
Tel: +7 495 705 9737
Transaction Tax Leader
Tel: +7 495 664 7884
Transfer Pricing Leader
Tel: +7 495 660 4880
People Advisory Services Leader
Tel: +7 495 641 2932
Tel: +7 495 287 6511
|Corporate profits tax||0%||15.5%||20%|
|Net Operating Losses (years)|
|Interest on certain types of state and municipal securities||15%|
|Other interest rates||20%|
|Royalties from, for example, patents, know-how||20%|
|Income from the operation, maintenance or rental of vessels or airplanes in international traffic||10%|
|Payments of other Russian-source income of foreign companies||20%|
|Branch Remittance Tax||0%|
Senior partner Sergey Gerasimov is the head of tax at ALTHAUS Group. The team comprises six partners and 53 experts working within the areas of indirect tax, corporate, disputes, compliance and accounting.
Manager Evgeny Nenashev, consultant Dmitry Lavnik and manager Gulnara Nazarova advised more than 50 private clients in May 2017. The team successfully defended the clients in a tax dispute, which arose in relation to personal income and real estate tax issues.
Gerasimov, Nenashev and Lavnik assisted OSRAM, a multinational lighting manufacturer, in April 2017. The indirect tax case concerned the audit of a VAT account and check-up of a VAT return for the Russian subsidiary of a major producer of electric tools.
Partner Maria Semenova is the head of tax and legal at AO Mazars. Semenova oversees a team of nine other professionals. The team works across the areas of indirect tax, corporate tax, disputes, compliance and accounting.
The team is experienced in assisting businesses operating in retail and consumer goods, machinery production, professional services, IT, pharmaceuticals and financial services.
Semenova, senior tax consultant Diana Marfitsyna and junior tax consultant Vladislav Tretiakov advised a US company and an international marketing and research agency in April 2017 on the proper tax and legal set up in Russia.
Alexander Chmelev is a partner and head of the tax practice group at Baker McKenzie Russia, where the firm is present in Moscow and St Petersburg. The tax department comprises five partners and 16 additional experts. Associates Artem Toropov and Hava Kadyrova joined the firm in the past year.
The practice advises on tax planning and structuring, including cross-border structuring; M&A, including tax due diligence; tax controversy work, tax audits, tax litigation in the courts; VAT, including indirect tax advice under the 2017 regime on taxation of electronically supplied services. The firm also deals with the taxation of employee benefits and share incentives; private wealth management; transfer pricing, including functional, economic and benchmarking analysis; transfer pricing documentation; defence file and strategy; capital markets and financial products taxation; customs valuation; trade sanctions and export control.
Associate Roman Bilyk and partners Arseny Seidov and Maria Kostenko advised a global manufacturer of products and raw materials for consumer foods in January 2017. The corporate tax case entailed the restructuring of inter-company services and licensing of know-how, patents and trademark rights. The team analysed the multi-layered structure of inter-company flows of services and IP rights.
Kostenko advised the Russian subsidiary of an international manufacturer and distributor of pharmaceuticals in August 2016. The tax dispute concerned Russian tax authorities denying deduction of costs on the write-off of medicines, which had passed their expiration date, for corporate tax profit purposes.
Partner Sergey Chelyshkov leads BDO Unicon's tax team. The team comprises two partners and 34 other professionals. The team's work is mainly focused on corporate tax, in addition to indirect tax, disputes, compliance and accounting.
Partner Vitaly Ivanenko and manager Alexey Tsiklauri advised a group of foreign companies in March 2017. The corporate tax case involved the analysis of a group of foreign companies, in accordance with Russian de-offshorisation. The team analysed the activities of more than 35 foreign companies and applied new CFC rules related to company tax residence, in addition to accounting for the impact of upcoming BEPS implementation.
Ivanenko and Mikhail Kolesnik advised Toyota Motor Europe in April 2017. The team supported the client in tax dispute against Russian customs, which arose from use of ATA Carnets, an international customs document that permits the tax-free and duty-free temporary export and import of goods for up to one year.
A key tax contact at Clifford Chance in Moscow is partner Alexander Anichkin. Anichkin joined the firm in 2007, and was promoted to his current position in 2012. The team advises clients in the sectors of automotive, financial services, insurance, transport and logistics.
The team provides assistance dealing with stamp duty and transfer taxe, transfer pricing, and VAT.
CMS Russia was established in 1992. Partner Dominique Tissot is a key contact who joined the firm in 2008. The tax team comprises 350 tax lawyers.
The team advises international clients on every aspect of business in Russia, as well as assisting Russian clients in Europe and beyond.
Services cover the areas of VAT, international taxation, transfer pricing, e-commerce, M&A and investment funds, tax planning and financing. The team assists in tax control cases and deal with tax authorities as well as managing tax litigation cases.
Partner Grigory Pavlotsky is the head of tax at Deloitte in Russia. The group comprises 15 partners and 13 additional tax experts working in indirect tax, corporate, disputes, compliance and accounting.
Partner Yulia Orlova, manager Nikita Soshnikov, legal manager Anastasia Matveeva, senior tax consultant Ivanna Grishina and senior legal consultant Ekaterina Seryakova assisted a major international tyres manufacturer in February in 2017. The team provided tax and legal analysis of consequences related to the implementation of the strategic partnership program between OOO Bridgestone CIS, the official distributor of Bridgestone tyres and dealers.
Partner Raisa Alexakhina advised a major Japanese car company in a tax dispute in December 2016. Alexakhina and the client appealed against the tax official's decision to eliminate $760,000 from the corporation's losses for income tax purposes and imposing of additional income tax of $150,000 in addition to penalties and charges. The team demonstrated the significant impact of currency fluctuations when buying and selling cars. The courts subsequently took into account that within this particular case it was important to determine the profitability of sales of the cars, rather than that of the entire company.
Dentons has offices in Krasnodar, St Petersburg and Moscow. Dzhangar Dzhalchinov is the managing partner of the tax and legal department and oversees its 18 professionals. Dzhalchinov joined the firm in 2013.
In 2017, the firm hired five tax specialists from Egorov Puginsky Afanasiev & Partners, including the practice's head of tax, Igor Schikow.
Dzhalchinov advised Berga Development in the implementation of a project concerning a construction sector-related VAT refund. The $53 million tax dispute was completed in July 2016.
Dzhalchinov and associate Valentin Larin advised Cyprus-based digital company GOG in April 2017. The indirect tax case involved the registration of a foreign e-services provider with Russian tax officials for VAT reasons, filing returns and assisting in payment of tax from a foreign bank account. The team took into account new VAT compliance requirements which were actioned in January 2017.
DLA Piper has a presence in Moscow and St. Petersburg. Partner Elena Mikhailovskaia is a key tax contact. The team assists clients in equity compensation, tax counsel, controversy and disputes, transactional tax planning, transfer pricing, VAT and customs duties.
Egorov Puginsky Afanasiev & Partners has a presence in Moscow, Kiev and Minsk. Counsel Sergey Kalinin is the head of tax practice based in Moscow. Kalinin has extensive experience and a Big 4 background.
The team assists with pre- and post-acquisition restructuring.
Ongoing tax support is offered for cross-border transactions, indirect taxes related to business models, structuring related-party transactions and transfer pricing compliance.
Peter Reinhardt is the lead tax partner at EY, he joined the firm in 1993. Reinhardt is also the tax and legal leader of EY for the Commonwealth of Independent States.
The firm offers clients advice on a broad range of tax issues such as income tax accounting, preparation and review, transaction tax, tax controversy, VAT, GST and other sales taxes, as well as assistance in transfer pricing and operating model effectiveness.
FBK Legal's partner-in-charge of tax is Nadezhda Orlova. The tax branch comprises three partners and 31 additional experts, working within indirect tax and disputes.
Partner Galina Akchurina and senior lawyer Alexander Grigoriev assisted independent energy wholesale company TNS Energo in December 2016. The dispute concerned tax charges of $5 million based on audit findings in 2012. Tax officials rejected the application of a reduced rate to the dividends paid to a corporation located in Cyprus. Under pre-trial procedures, FBK established that the position of the tax authorities was unsubstantiated, and the claims against the company were eventually lifted.
Orlova and attorney at law Dmitry Paramonov advised a Ukrainian agribusiness with a presence in Russia in January 2017. The firm assisted on $500 million cross-border tax issues connected with absence of transparent law due to changes in Russian legislation.
Clara Vorobieva is the managing partner at FinExpertiza, who joined the team in October 2016. The tax department comprises four partners and 16 experts.
Head of consulting Alexander Freiberg assisted Proventis Group in a tax dispute in December 2016. The team assisted in the preparation of a statement of claim and subsequent representation in litigation proceedings.
Julia Eshkina and Victor Demidov assisted Inkerman Vintage Wine Factory in April 2017. The team assessed the client's tax calculation and fees relating to corresponding tax periods from 2015 to 2016. The report comprised results of the provision of service: tax on profit, tax on income paid to foreign organisations, tax on property and excise tax from December 2014 to December 2016.
Evgeny Timofeev is senior partner of Goltsblat BLP's tax unit. It comprises two partners and 17 additional professionals.
Head of tax dispute resolutions Alexander Erasov and Timofeev assisted an industrial group in February 2017. The team represented the client in tax dispute, which covered several regions of Russia and arose when officials refused to deduct VAT and expenses for intra-group service agreements.
Timofeev, Erasov and associate Anton Isakov advised Abbott Laboratories in February 2017. The team assisted in the development of a model for collaboration between a pharmaceutical manufacturer and pharmacy chains. This enabled direct payment of volume bonuses to the chains, when medicines were purchased through third-party distributors and not directly from the manufacturer.
A client said: "Goltsblat had a better perspective on wider issues including customs and criminal law, which was crucial in selecting the firm in various projects we currently do with them."
Oleg Konnov is the head of the tax practice at Herbert Smith Freehills. He specialises in the key sectors of consumer products and oil and gas.
The team assists clients across all areas of tax such as direct and indirect tax, customs duty issues, information exchange, treaty disputes and cross-border issues, disclosure facilities, transfer pricing disputes, civil and criminal fraud proceedings, tax warranty and indemnity claims and other commercial tax disputes.
KPMG's tax and legal department is led by partner Mikhail Orlov. The firm comprises 15 partners and 444 additional experts.
Director Anton Zykov has advised Ekaterinburg Non-Ferrous Metals Processing Plant, a member of the Renova Group, since December 2015. Zykov defended the client in a $35 million tax dispute against allegations of tax avoidance. Officials denied the client's VAT deductions, on the basis that banks were supplying precious metals to the group via intermediaries that were not paying their taxes correctly. Since KPMG began assisting the client, the assessment has been decreased by $7 million.
Senior lawyer Andrey Grachev and lawyer Anton Borisichev have also provided consulting and registration services on the new VAT rules to EBay, Booking.com, Alicloud, Vimeo, RELX Group, amongst others, in 2017. This is a new area of practice, as legislation was actioned in January 2017.
Associate Victor Matchekhin is the head of tax at Linklaters in Russia, which he joined in 1998. The team assists clients in the tax areas of M&A, joint ventures, capital raising and structured finance, contentious tax, trusts and tax-based finance.
The team assisted Vodafone in a significant challenge in the UK courts on the compatibility of CFC rules with EU law.
The team assists clients in the sectors banking, automotive, healthcare and pharmaceuticals, pensions, compensation, infrastructure and finance.
Sergey Pepeliaev is managing partner Pepeliaev Group, Taxand Russia. The firm comprises 12 partners and 50 professionals.
The head of the tax practice group Ksenia Litvinova is advising OOO Burovaya Kompaniya Eurasia, a Russian independent drilling company. The team is representing the client in a tax dispute. Officials charged the client for allegedly damaging the environment with waste, in the form of drilling cuttings and fluid, which remained after the client drilled boreholes.
Senior partner Rustem Ahmetshin and senior associate Tatyana Pavlyukova have been assisting Gazprom PJSC, a global energy company, after winning the firm won the contract in a public tender. The corporate tax case concerns de-offshorisation issues related to compliance with tax legislation requirements. A methodology was developed in accordance with profit calculated of controlled foreign companies.
Ekaterina Lazorina is the partner-in-charge of the tax and legal department at PwC. The tax practice comprises 25 partners and 509 additional experts. The overall practice consists of more than 2,500 permanent employees in Russia, including 81 partners.
Partners Vladimir Konstantinov and Natalia Vozianova advised Lamoda group, a leading online fashion retailer expanding in the Commonwealth of Independent States, in September 2016. The client's sales totalled $100 million within the CIS. The team restructured the client's operations in Kazakhstan and Belarus. The client experienced increased demand for delivery from these states and Russia and therefore needed to find a more efficient supply method. The client used the preferences offered by the common market within the Eurasian Economic Union.
Partner Ekaterina Lazorina assisted Sberbank of Russia in completion of the main stages of a project in 2016. Lazorina assisted with the expansion of Sberbank's controlled foreign companies (CFC), the subsequent tax methodology and calculation of relevant liabilities. The team interpreted new 2015 CFC tax legislation, reviewed financial statements of the client's foreign subsidiaries and international financial reporting standards.
Andrei Vladimirov is the head of tax at Sameta. The team offers advice in the areas of tax, transfer pricing and international tax treaties. Clients are assisted in relation to tax officials and represented in disputes, VAT claims and disputes, due diligence and business model optimisation.
Shapovalov Petrov was established in April 2015 by partners Sergey Shapovalov and Kirill Petrov. The tax team is led by Petrov. The team consists of three partners and five additional experts who work across all areas of tax. Two professionals joined the firm in 2017.
Partner Ekaterina Boldinova is the head of the tax group at Tilling Peters, which comprises three professionals. Boldinova joined the team in November 2016.
Boldinova assisted Buongiorno Mobile Rus, a global telecommunication company, in 2016. The team advised on reducing tax risks accompanying a business development in Kazakhstan. The team proposed an optimal business structure and revised first contracts related to corporate tax risks. The client's corporate tax was reduced by $500,000.
Managing partner Oxana Peters and Boldinova advised Dr. Reddy's Laboratories, a pharmaceutical manufacturer, in March 2017. The team represented the client in a $1 million tax litigation case against tax officials.
Partner Irina Dmitrieva heads the tax and legal practice at White & Case in Moscow, she joined the firm in 2004.
The team assists clients in M&A, private equity, greenfield investments, corporate restructuring and reorganisations, capital markets and structured finance transactions.
|Tier 1 - Russia|
|Pepeliaev Group, Taxand Russia|
|Tier 2 - Russia|
|Tier 3 - Russia|
|Egorov Puginsky Afanasiev & Partners|
|Herbert Smith Freehills|
|White & Case|
|Tier 4 - Russia|