Tax on the property of organizations

The procedure for calculating the tax on organizations' property is established by Chapter 30 of the Russian Federation’s Tax Code.

Organizations that have property are recognized as taxpayers.

If the company has immovable property, including property transferred for temporary possession, use, disposal, trust management or received under a concession agreement, it must be recorded on the balance sheet as fixed assets.

Foreign organizations operating in Russia through permanent representative offices keep records of taxable items in accordance with the procedure established in the Russian Federation for accounting.

The latest amends to the property tax were made by Federal Law No. 325-FZ of 29.09.2019 and Federal Law No. 63-FZ of 15.04.2019, which changed the rules for the property tax from 2020 Organizations pay property tax:

  • on real estate, which was taken into the balance as «Fixed assets» and «Profitable investments». An exception is a property that is not subject to taxation or is subject to a benefit in the form of an exemption;
  • on residential buildings and residential premises not included in fixed assets;
  • on real estate, which was received under the concession agreement and is not in the balance.
The tax base can be defined as the average value of the property or the cadastral value.

The cadastral value of the property is used to determine the tax base in relation to the following types of real property subject to taxation:

  • administrative and business centers, shopping centers, and accommodations;
  • non-residential accommodations for offices, shopping facilities, public catering, and consumer services;
  • immovable property of foreign organizations not carrying out activity in the Russian Federation through permanent establishments and immovable property of foreign organizations not related to the activities of these organizations in the Russian Federation through permanent missions;
  • residential accommodations, garages, parking spaces, objects of unfinished construction, as well as residential buildings, garden houses, farm buildings, or structures located on land plots provided for personal subsidiary farming, gardening, gardening, or individual housing construction.

 

The tax base of other properties for which the cadastral value is not applied is calculated as the average annual value (if the object is considered to be a fixed asset).

The marginal tax rate on «cadastral» real estate objects cannot exceed 2 percent in all regions. For those who use the average annual value, the maximum tax rate is 2.2%.

As for reporting, starting from 2020, you do not need to submit reports quarterly. The declaration must be submitted once for the entire year. Although, payments must be made quarterly.

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