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Chapter 7: The Russian Tax Account

 

 

Russian Taxation Rules

Every farmer must report for the tax authority his quarterly sales and income for purchase tax and income tax purposes. The principles are rather simple, nearly only covering cash sales and cash costs.

 

Russian farmers pay two or three kinds of taxes:

 

The Taxable Farm Profit is defined in the following way. -

 

The farmer is obliged to inform the tax authorities of his sales and income quarterly on a certain one-page form at the latest 19 days after the end of the quarter. The matching tax should be paid at the same time. As mentioned above, the principles of the tax accounts are rather simple.

 

According to these principles, it is rather easy to show the taxable income and to calculate the different taxes in the farmer's tax account. Entrepreneurs in other sectors than agriculture pay 70 per cent income tax on business profit. It is quite common, that farmers make other business beside their agricultural business. The income taxation rule of other sectors is put into force, when a farmer has more than 30% of non-agricultural sales.

 

Wage earners pay approximately 12% income tax. This tax is to be withheld by the employer. Besides the wage cost, the employer has other costs of hired staff such as contribution to pension funds. Tax of wage earners' interest income is withheld by the bank. Tax of entrepreneurs' interest income is not withheld. Instead, the farmer must show this income in his tax form.

 

Principles for the Tax Accounts

Which figures should be shown in the Tax Account? That is a question of which information is needed to fill the Tax Form, and what is expected by the tax authorities.

 

The bookkeeping practice should follow the demands of the tax authorities. The vouchers need to be controlled by Consultancy Centre staff, cash balance controlled, etc. It is important, that the tax authorities believe in the Consultancy Centre's work, so it must be properly done.

 

When should an income or a cost be entered the books? When the buyer and seller agree on the amount. If the amount is paid, then at the month of payment.

 

A Proposal for Plan of Accounts

 

Tax Form

Account

Text

Cash

Non-Cash

Sum

 

20

Sales 1 (crops)

Х

 

 

 

21

Sales 2

Х

 

 

 

22

Sales 3

Х

 

 

 

23

Sales 4

Х

 

 

 

24

Sales 5

Х

 

 

 

25

Sales 6 (milk)

Х

 

 

 

26

Sales 7 (animals)

Х

 

 

 

27

Sales 8

Х

 

 

 

28

Sales 9

Х

 

 

 

29

Sales 10

Х

 

 

1

 

Total Sales, Taxes Excluded

 

 

Х

1A

 

non-processed agricultural sales

 

 

Х

1B

30

Processed agricultural sales

 

Х

 

1C

31

Work and service for other firm

 

Х

 

 

32

Income form realisation

Х

 

 

 

33

Interest from bank

Х

 

 

 

34

Yields from value papers

Х

 

 

 

35

Other income 1

Х

 

 

 

36

Other income 2

Х

 

 

2

 

Interest, yields, realization income, etc.

 

 

Х

3

 

Total taxable incomes, row 1+2

 

 

Х

3A

37

Non-agricultural part

 

Х

 

4A

38

Credits obtained

Х

 

 

 

39

Dotations from budget funds

Х

 

 

 

40

Assurance received

Х

 

 

 

41

Other donors, non-budget funds

Х

 

 

4

 

Credits obtained, dotations, etc.

 

 

Х

5

42

Depreciation by end of use

 

Х

 

 

43

Repair 1

Х

 

 

 

44

Repair 2

Х

 

 

6

 

Cost of repair

 

 

Х

 

45

Production costs 1 (crops)

Х

 

 

 

46

Production costs 2

Х

 

 

 

47

Production costs 3

Х

 

 

 

48

Production costs 4

Х

 

 

 

49

Production costs 5

Х

 

 

 

50

Production costs 6

Х

 

 

 

 

51

Production costs 7

Х

 

 

 

52

Production costs 8

Х

 

 

 

53

Production costs 9

Х

 

 

 

54

Production costs 10

Х

 

 

 

55

Production costs 11 (animals)

Х

 

 

 

56

Production costs 12

Х

 

 

 

57

Production costs 13

Х

 

 

 

58

Production costs 14

Х

 

 

 

59

Production costs 15

Х

 

 

7

 

Costs for production work and service

 

 

Х

8

60

Salaries

Х

 

 

9

61

Payments to farm members

Х

 

 

10

62

Social and medical insurance

Х

 

 

11

63

Depreciation

 

Х

 

12

64

Leasing paid

Х

 

 

13

65

Obligatory insurance payment

Х

 

 

 

66

Interest 1

Х

 

 

 

67

Interest 2

Х

 

 

 

68P

Reserved

 

 

 

 

69P

Reserved

 

 

 

14

 

Interest paid

 

 

Х

 

70

Sales commision paid

Х

 

 

 

71

Specialists paid

Х

 

 

 

72

Telephone etc.

Х

 

 

 

73

Bank costs

Х

 

 

 

74

Other expenses

Х

 

 

 

75P

Reserved

 

 

 

 

76P

Reserved

 

 

 

15

 

Other expenses

 

 

Х

16

 

Total deductible costs

 

 

Х

16А

 

Costs for agricultural sales

 

 

Х

16В

77

Costs for processed agr. sales

 

Х

 

16С

78

Costs for work and service for other firms

 

Х

 

16D

79

Costs for non-agricultural sales

 

Х

 

17

 

Investments and repayments

 

 

Х

 

 

80

Buildings

Х

 

 

 

81

Machines 1

Х

 

 

 

82

Machines 2

Х

 

 

 

83Р

Reserved

 

 

 

 

84Р

Reserved

 

 

 

 

85Р

Reserved

 

 

 

 

86Р

Reserved

 

 

 

 

87Р

Reserved

 

 

 

17А

 

Buildings and machines

 

 

Х

17В

88

Production livestock, etc.

Х

 

 

17С

89

Repayments

Х

 

 

18

 

Taxable profit (row 3 minus row 16)

 

 

Х

18А

 

Non-processed agricultural sales

 

 

Х

18В

 

Processed agricultural sales

 

 

Х

18С

 

Work and service for other firms

 

 

Х

18D

 

Income from non-agricultural activity

 

 

Х

19

 

Turnover (row 3 + row 4 - row 16 - row 17)

 

 

Х

19A

90

Profit of the farm members

 

Х

 

 

91

Cash by beginning

Х

 

 

 

92

Cash by end (negative)

Х

 

 

 

93

Bank by beginning

Х

 

 

 

94

Bank by end (negative)

Х

 

 

 

95

From private means

Х

 

 

 

96

To private consumption

Х

 

 

 

97

Paid VAT and special tax

Х

 

 

 

98Р

Reserved

 

 

 

 

99

Regulation of non-cash figures

 

Х

 

 

(110)

Calculated VAT (to Cash Balance control)

 

 

*

 

(111)

Calculated Special tax (to Cash Balance control)

 

 

*

 

(112)

Cash Balance control (should be zero)

 

 

Х

 

(113)

Non-cash Balance control (should be zero)

 

 

Х

 

(114)

Calculated agricultural income tax

 

 

*

 

Notes

This material is adapted from the booklet "Regnskabsføring i landbrugsvirksomheder", published by Danish Radio 1975. It is intended to instructing in farmers' accounts in Russia. The purpose is to give inspiration and understanding of Danish farmers' accounts - it is not a final precept for Russian accounts. Chapter seven on the Russian Tax Account is entirely a proposal at my own expense.

Illustrations by J. Skjødsholm , translation to Russian by Natacha Grigoriyeva.

Smolensk, June 1995

Ebbe Munk

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