The following article is an excerpt from Awara Russian Tax Guide, the first comprehensive book offering a full overview of all Russian taxation laws and rules. Awara Russian Tax Guide provides insight into the general framework of the Russian tax laws, the Tax Code and its principles. It describes the general rules of the Tax Code Part I and each type of tax and tax regime of Tax Code Part II, among them: Profit Tax, VAT, Personal Income Tax, Property Tax, Employer’s Social Contributions. The book also covers the now so important case law and taxation principles set by court precedents.
The transport tax is a regional tax and will have to be implemented by separate laws of each Region of the Russian Federation. The regional laws will determine the applicable tax rate for the region within the limits specified by the Tax Code, the specific procedures, dates for tax payments, tax privileges, and also the forms for tax filings (art 356).
The taxpayers for the tax are individuals and legal entities, in whose name the vehicles and vessels (means of transportation) are registered (art 357). Exempt are foreign legal entities which take part in organizing Olympic Games and Para-Olympic Games in Sochi 2014 (and are officially recognized as such) for the income gained in connection with their services in connection with the games. The exemption is effective till 1 January 2017.
Object of Taxation
The objects of taxation are automobiles, motorcycles, motor scooters, buses and some other self-propelled vehicles, caterpillars, aircrafts, helicopters, ships, yachts, sailing boats, cutters, snowmobiles, sledge-cars, motor boats and other water and air vessels registered in due order.
The following kinds of means of transportation are excluded from taxation:
1. Oar boats and motorboats with engine power not exceeding 5 horse powers;
2. Motor cars specially designed for the disabled;
3. Commercial fishing seagoing and river vessels;
4. Passenger and cargo sea, river and air vessels utilized in passenger and cargo transportation;
5. Tractors, combined harvesters, special motor vehicles of agricultural manufacturers used in manufacturing agricultural products;
6. Vehicles and vessels of federal military bodies;
7. Vehicles and vessels under search by the police authorities;
8. Aircrafts and helicopters medical services.
9. Vessels registered in the Russian International Register of Vessels
Computation and Payment of the Tax
The tax rates (art. 359) of the transport tax are determined as follows:
• engine power – for vehicles and vessels with engine (the tax rate differs, depending on the vehicle type, from 2 to 50 rubles per horsepower);
• total capacity measured as registered tonnage – for towed vessels (the tax rate is 20 rubles per a registered ton);
• vehicle unit – for other water and air vessels (the tax rate is 200 rubles per vehicle unit).
• static take-off thrust of the jet engine – for aircraft with jet thrust (20 rubles on each kilogram force of thrust)
Since the January 1, 2011 the base rent of transport tax was reduced by half due to the increase of excise on a fuel.
The tax rates given in the Tax Code can be increased or reduced by the laws of the subjects of the Russian Federation, but no more than ten times (art. 361 For passenger cars which engine less than 150 (110.33 kw) horsepower the tax rates may be even further reduced.
The tax period for the transport tax is a calendar year (art.360).
Companies calculate the amount of the tax on their own and file corresponding tax returns. The tax inspectorate compute the tax due by individuals and hand to the taxpayer the corresponding notifications with the sum of tax due.
The tax (including advance payments) is paid at the location where the vehicle or vessel is registered in accordance with the procedures and terms set in the laws of the relevant Region (art 363).
Moscow Transport Tax
As an example of the regional application of the federal law, we refer to the Moscow law on transport tax on July 9, 2008 N33.
The Moscow law significantly increased the transport tax rates in comparison with the default rates of the Tax Code. The law also sets some exemptions in regard to persons owning motor vehicles with engine power not exceeding 70 horse-powers. There is also an exemption benefiting companies performing services for urban public transportation.