Taxation in Russian Agricultural Sector

Taking into account its vast natural wealth, the Russian land is much cheaper in comparison with foreign countries. However, the potential of business in this industry has not yet been revealed to the full. Agriculture allows returning investments that are multiplied many times within a few years. Apart from obtaining income from the agricultural production, the land can be just resold. Based on this, one can earn from 12% to 15% per annum.

The lowest taxes in the world also have an impact on land acquisition. In many ways, their rates depend on the benefits provided by the state.

  1. For some branches of the manufacturing sector in this area, there is zero profit tax rate;
  2. For certain types of agricultural products, a reduced VAT rate is established;
  3. There is also special tax treatment, for example, for peasant farms;
  4. In addition, there exist the benefits related to movable property. Moreover, the compensation for expenses on transportation or seeds is provided as well.

Investing in Russian agricultural land is not only convenient, but also profitable. And tax benefits play a significant role in this.

How to Obtain a Zero Tax Rate?

In this industry, ccommodity manufacturers have the right to receive this benefit. However, their activities should be related to the sale of the products manufactured and processed by them. There exist other peculiarities that our experts can help to deal with. We will select the best option for investing and obtaining income, do all the paperwork, and explain the situation with taxes.

What is Worth Knowing about the Reduced VAT Rate?

When charging VAT, in many areas of agriculture, the discounted rate of 10% is applied. As a rule, it is relevant for the following products:

  • meat and poultry (wet weight);
  • eggs and products containing milk;
  • vegetables and meat products.

The corresponding decree of the Government of the Russian Federation (No. 908) contains the codes of products, the sale of which are taxed at the reduced VAT rate of 10%.

Special Tax Treatments

Another effective measure used to support enterprises belonging to the agro-industrial sector, as well as peasant farms, is special tax treatment. According to it, income as well as property taxes and VAT are replaced by the Single Agricultural Tax. It is calculated on the basis of the results of the work of an organization. The rate of the Single Agricultural Tax is 6% and it has no restrictions in terms of revenue when it is applied, which allows for the accelerated procedure of cost accounting. This is one of the lowest tax rates in the world.

The Peculiarities of Property and Transport Tax Payment

There has been reduced the land tax that is imposed on agricultural land plots for the personal subsistence farming aimed at the production of agricultural products. Tax benefits for movable property of enterprises are provided separately. Certain types of industrial machinery are not subject to transportation tax.

Our experts will find the operating business, conduct its audit, ensure the best value for money, and do all the necessary paperwork.