Accounting Services for Foreign Business in the Russian Federation

More and more branches and representative offices of foreign companies are established in Russia. When performing the functions of a legal entity, they must keep accounting and tax records like Russian companies that implies duly preparation of accounting reports according to the established forms and its timely submission to the corresponding authorities in respect of their business activity.

Foreign representative offices and branches are required not only timely submit tax return at the place of accreditation, but also report to the head office of their company on financial activities in the Russian Federation. In this case it is necessary to monitor the deadlines for submitting accounting documents to the head office so that it could be included in the general accounting reports of the whole company.

Accounting and taxation management of a foreign representative office is not an easy task and requires proficiency in accounting, tax and legal matters.

Accounting of a foreign branch or a representative office includes the same aspects as the accounting of any company registered in Russia. However, additional tasks include internal reporting in a foreign language stipulated by the head company on the basis of the regulatory system of the head office’s country.

All organizations carrying out their business activity on the territory of the Russian Federation are required to pay taxes according to the current laws.

The activity of foreign companies in Russia has its own specialties in respect of the calculation and payment of income tax received by foreign organizations from the sources in the Russian Federation withheld by a tax agent, i.e. taxation of income of non-residents from a Russian organization that is a source of payment (a tax agent) needs special knowledge and experience.

Foreign representative offices and branches carrying out business activity on the territory of the Russian Federation are required to calculate profit and pay income tax according to the special rules and regulations of the Tax Code of Russia, fill in tax returns on income tax of a foreign organization, i.e. a declaration different from the ordinary income tax return.

The taxation system of the country has a lot of differences that restrains foreign capital flows.

The following tax rates are applicable to non-residents of Russia:

  • VAT — 20% (a reduced amount of 10% is applicable for certain groups of products,);
  • Income tax for individuals that are non-residents — 30%;
  • Corporate income tax — 20%;
  • Property tax — 2.2%;
  • Dividend tax — 9% for Russian residents (30% for non-residents);
  • Insurance contributions for employees for the Pension Fund — 22%;
  • Medical insurance for employees — 5.1%;
  • Social insurance contributions — 2.9%.
The main difficulty of keeping accounting for a foreign representative office or branch is that these records should be kept in accordance with foreign accounting rules and regulations and the requirements of the Russian legislation.

The peculiarities of accounting and taxation management for foreign representative offices and branches require knowledge of Russian laws, standards and accounting rules as well as the laws of the head office’s country. In this case a specialist should permanently monitor amendments, additions and alterations in a particular branch of law in order to easily interpret the dynamic Russian legislation. Foreign language knowledge must be at a high level in order to promptly provide the customer with detailed information in an accessible form and fluent communication.

In these circumstances, branches and representative offices of foreign companies, their representative offices and branches prefer to contact consulting firms that provide a full range of accounting services. Foreign representative offices and branches can entrust accounting services to Modern Accounting Consulting LLC and directly focus on business development.

Our specialists have significant experience in accounting and taxation management for foreign representative offices and branches of foreign companies in various fields and industries.

Advantages of the accounting company Modern Accounting Consulting LLC

  • The flexibility of the services provided from a single task to the yearly accounting for representative offices and branches of foreign companies;
  • Identification and minimization of risks in business activity of representative offices and branches of foreign companies, optimization of tax payments, financial and material resources related with the development of the Russian market;
  • Commitment to foreign business (English speaking staff, daily practice of dealing with foreign business in the Russian Federation, knowledge of specifics and peculiarities in various sectors of the economics, experience);
  • Guarantee of complete and timely preparation and submission of all necessary reports to the tax authorities, statistics agencies and non-budgetary funds.
  • Free advice on accounting and taxation of representative offices and branches of foreign companies any time.

Our Services

  • Registration of basic documents;
  • Preparation of internal reporting for the company’s head office; <//li>
  • Preparation of accounting and tax reporting for submission to tax authorities and non-budgetary funds;
  • Performance of all tax and accounting operations;
  • Personnel reporting;
  • Development of an individual workflow schedule of a representative office or branch;
  • Consulting services and tracking of any changes in Russian taxation law related to the activities of a foreign representative office in the Russian Federation.

The price of accounting services for representative offices and branches of foreign companies is determined individually for each Customer. The price of accounting depends on the volume of services provided.