Russian Tax Code - Regional and Local Taxes

Regional and Local Taxes

All regional and local taxes in Russia are asset-related: property tax, vehicle tax, land tax and tax on gambling businesses. These taxes are assessed and paid in re. Exact rates are set by regional (property, vehicles, gambling) or municipal (land) legislators within the Code's framework.

Corporate property tax, or tax on fixed assets, is assessed on year-averaged book value of fixed assets excluding land (which is subject to land tax). Radioactive waste storage facilities, space satellites, church property and other itemized assets are specifically exempt from taxation. The maximum rate is 2.2 percent; regional authorities can vary rates depending on types of taxpayers and assets. This provides a method to establish disguised individual preferences, which are outlawed by the Code.

Land tax is the only local tax in Russia: its rates are set by municipal authorities (excluding the federal cities of Moscow and Saint Petersburg, where the rates are set by city legislators). The maximum rate is 0.3 percent on lands zoned for agriculture, housing and dachas, and 1.5 percent on other lands. Forest reserves and bodies of water are exempt. Land values are periodically assessed by land registrars and kept substantially below market prices. Unlike corporate property tax, land tax is paid by individual taxpayers.

Vehicle tax is levied annually on owners of motor vehicles and trailers, ships, and aircraft. Commercial ships and aircraft operated by transportation companies, agricultural, military vehicles and ambulances are exempt. The Code establishes maximum rates tied to engine power. Rates increase steeply with increasing horsepower. For example, in 2009 fiscal year the city of Moscow levies 700 roubles on a 100 h.p. passenger car, 2400 roubles on 120 h.p., 12,000 roubles on 200 h.p. and 45,000 roubles on 300 h.p. Taxation does not depend on emission levels.

Tax on gambling businesses is paid by registered gambling outlets at a flat rate per each table, slot machine or bookmaker's cash desk. The Code provides both minimum and maximum rate limits (1:5 ratio), thus prohibits establishment of tax-free gambling. For example, one slot machine is taxed at 1,500–7,500 roubles a year, and one table at 25,000–125,000 roubles a year. From July 1, 2009 gambling in Russia is banned, except in four specially designated gambling areas in remote regions. Online gambling is banned.