Russian agricultural tax an example for Western Countries ?
You might criticize a lot about Russian economy, but some models about taxation in Russia could act as pioneer for western European States.
Agricultural enterprises pay a tax of 6 % (amount yielded and deducted by cost and depreciation on assets). For newly created agricultural enterprises you are exonerated during the first two years and a reduced rate for other two years is foreseen. The more agricultural enterprises are exempt from VAT and do not need a cash-registering system.
To obtain this favourable tax-regime, there is only one condition, the enterprise has at least to get 70 % of its yield out of the agricultural activity (incl. the processing of agricultural products).
This tax-regime is complicated by partially unreasonable administrational claims for the documentation of expenses. A simple cash-slip isn't sufficient to justify the expense, additionally you will need an invoice or a receipt with a stamp on it. This condition is valuable, no matter the amount of the expense and does also concern amounts of some cents.
Also the chapter travelling-expenses and representation is matter of critics. The chapter "representation" isn't foreseen at all in the Russian tax-regulations and for travel-expenses an amount of 231 Rubels per day (7 Euro) is allowed, beside of that cost for flight, train and hotel is allowed.
Depreciation on assets is calculated according to a list of the tax-administration, where meticulously all items are mentioned. Every year, this list shows modifications and every year new again, the accountant has to adapt the accountancy in accordance.
There is another little catch by the obligation to declare with the balance-sheet within the first six months of the year. When submitting the balance, taxes already have to be paid in and depreciation on assets are only admitted at the years end. Reserves for future cost aren't allowed for the first semester.
Clever idea, by this way, most enterprises have a positive result during the first 6 months - and they have to pay taxes. With the final-years balance the tax-administration will credit you with this amount, but take it as you read it, you won't get cash back, but the amount will be reported and been taken into consideration with the next tax payment. Call it a credit you give to the Government.
Never the less, the Russian tax-regulations for the agricultural sector show to be modern and functional.
These tax-regulations are an incentive to meet the decrease in investments in the agricultural sector, and to be honest they represent subsidies. This could also be a valuable model for States such as Germany which every year new again fights for the amounts of subsidies inside den EC. Instead of subsidies and disputes, just a lower income-tax, which would show its effects on consumer-prices.
Here, Russia is forerunner with a new model of tax-regulations to stimulate agriculture.
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