It implies continuous communication of all its members and related objects: payers; legislative framework; oversight authorities; types of mandatory payments.
The Code is designed as a complete national system for federal, regional and local taxes but excludes customs tariffs.
Taxes or levies not listed explicitly by the Code or enacted in violation of its specific provisions are deemed illegal and void.
[citation needed] The second, and probably most important, stage of Putin's tax reforms—Chapter 25 of the Code dealing with corporate profits—was enacted in August 2001 (effective January 1, 2002).
The government slowly but regularly increases excise taxes on alcohol, tobacco, gasoline and motor oil; the current Code provides a detailed plan for raising the rates until 2010 fiscal year.
The purpose of taxation is to fund governmental and municipal activities, leveraging rights of ownership, economic jurisdiction, or operational management.
It is a prerequisite for state authorities and local government bodies to perform specific legally significant actions, such as granting rights or issuing permits (licenses) to the payers of the levy.
In addition, it might provide an exemption from obligation to pay certain taxes or levies and to describe a special procedure for defining the elements of taxation.
[citation needed] VAT exemption extends to targeted companies in medicine, pharmaceutical industry, education, public housing and transportation; to private homes and apartments; to traditional banking and insurance services; to sales of exclusive copyright on software, integrated circuit topologies and similar high technology contracts.
[39] Tax on mineral extraction is the second largest source of federal revenue regulated by the Code; most of it is paid by oil companies.
In March 2008 Moscow Oblast initiated a federal bill intended to change the system in favor of suburban territories.
Exact rates are set by regional (property, vehicles, gambling) or municipal (land) legislators within the Code's framework.
Radioactive waste storage facilities, space satellites, church property and other itemized assets are specifically exempt from taxation.
Three alternative tax systems replace the above taxes with a simplified procedure: Imputed taxation applies to specific, typically small business, activities involving trading with general public in cash: small retail and food service outlets, hotels, repair shops, taxi companies, etc.
Imputed tax, uses rates set by local authorities (per square meter of shop space, per vehicle etc.)
Taxation system for agriculture (including animal farms and fisheries) uses a flat unified tax levied at 6 percent on gross margins, with its own unique set of accounting rules.
Finally, a Product-sharing agreement framework applies to a very limited list of joint state-private enterprises, typically in oil extraction.
[63] Cash transfers between a branch and overseas head office and back are not subject to withholding tax and are not considered taxable income or deductible expenses.
[65] Deductibility of royalties and service fees remitted from Russia to foreign companies is frequently disputed by tax authorities and has been subject of high-profile cases against subsidiaries of PricewaterhouseCoopers,[66] Procter & Gamble and SABMiller.
These changes have been influenced by geopolitical situation, economic sanctions imposed by Western countries as a response to the invasion and the subsequent impact of all these factors on Russian economy.
It currently includes the US, all EU member states, the UK, Canada, Australia, New Zealand, Switzerland, Norway, Japan, South Korea, Taiwan, Singapore, Ukraine, Albania, Andorra, Iceland, Liechtenstein, Micronesia, Monaco, San Marino, North Macedonia and Montenegro.
In March 2022, the Russian Government implemented new regulations requiring prior approval from the Government Commission for Control over Foreign Investments in Russia (the 'Commission') for a range of financial and real estate transactions involving Russian individuals and citizens of 'unfriendly' States or entities connected to such States.
Russian residents looking to engage in transactions with individuals from 'unfriendly states' need to obtain prior clearance by the Government Commission for Control over Foreign Investments.
As well as the compensation to be paid to rights holders from 'unfriendly states' for using inventions, utility models or industrial designs without consent is set at 0% of actual proceeds from the production and sale of goods.
Moreover, there's a six months' pause on money transfers from Russian accounts of non-residents, either companies or individuals, in countries imposing sanctions.
Until December 31, 2022, Russian banks and insurance companies have certain exemptions from publishing certain information aimed at sidestepping sanctions from 'unfriendly states', concerning their ownership and control structure, members of management bodies and other officers or corporate restructuring.
Subsequently, Russia has put restrictions on the entry of several prominent officials from the US, EU, UK, and other countries deemed 'unfriendly', although this isn't explicitly mentioned.
[70] Last but not least, some of the new rules require all foreign investors, commonly labelled as 'unfriendly' ones, to make a 'voluntary contribution' to the Russian State budget established at at least 10% of the proceeds from the sale of any asset located in Russia.
To be able to transfer, either directly or indirectly, shares in Russian entities, they must first obtain a permit from the Commission, as it has been decided since December 2022.
However, recently, with the deepening crisis, key structural organizations started to express their dissatisfaction with the current tax system as well.