What is the Structure of the Russian Tax System?
Taxes may be categorized as follows:
1. Federal Taxes: These are applied throughout the Russian Federation at uniform rates, like Value-Added Tax.
2. Federal Taxes: These are applied throughout the Russian Federation at tax rates determined by the Tax Code but which may be reduced by the regional government authorities in respect to what portion of such taxes go to the regional budget, such as Corporate Profits Tax.
3. Local/Regional Taxes: These are determined by the Tax Code and the local or regional government authorities and are collected locally or regionally only, for example, Property Tax (a regional tax) and Land Tax (a local tax).
Thus, a Franchisor’s Tax Structure can evoke different tax burdens in different locations. It also creates the need for local and regional filings and payments of taxes when an entity has branches in different regions.
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