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2015 Edition
STUDY QUESTION BANK
ACCA
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Paper F6 | TAXATION (RUSSIA)
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ACCA
PAPER F6
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TAXATION
(RUSSIA)
STUDY QUESTION BANK
For Examinations June and December 2015
®
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(i)
No responsibility for loss occasioned to any person acting or refraining from action as a result of any
material in this publication can be accepted by the author, editor or publisher.
This training material has been published and prepared by Accountancy Tuition Centre (International)
Limited
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United Kingdom.
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(ii)
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
CONTENTS
Page
Rates and allowances
Supplementary data
Answer
Marks Date worked
(v)
(viii)
CORPORATE PROFITS TAX – INCOME RECOGNITION
OOO Mix
OOO Polus
OOO Pelmen
1
2
2
1001
1001
1002
6
4
20
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1
2
3
CORPORATE PROFITS TAX – DEDUCTIBLE EXPENSES
OOO Ulei
OOO Festival
OOO Videomir
OOO Trimpex
3
3
4
4
1004
1005
1005
1007
7
3
7
3
5
1007
6
5
1008
15
6
1010
17
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4
5
6
7
CORPORATE PROFITS TAX – OTHER INCOME AND EXPENSES
8
OOO Begemot
VALUE ADDED TAX
9
OOO Metalurg
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CORPORATE PROFITS TAX & VAT – CASE STUDY
10
OOO Complex
PERSONAL INCOME TAX – SCOPE, COMPUTATION AND DEDUCTIONS
11
12
13
14
15
16
17
18
19
Dmitriy Kruglov
Lora
Roman
Vera
Alla
Larisa
Maxim
Stanislav
Irina
7
8
8
9
9
10
10
11
11
1013
1013
1015
1015
1016
1017
1018
1019
1020
7
12
4
9
6
6
14
4
13
12
12
13
1022
1022
1023
8
6
8
PERSONAL INCOME TAX – SPECIAL RATES AND RULES
20
21
22
Jana
Zhanna
Matvei
©2015 DeVry/Becker Educational Development Corp. All rights reserved.
(iii)
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
CONTENTS
Page
Answer
13
14
15
16
17
1024
1026
1027
1028
1029
Marks Date worked
PERSONAL INCOME TAX – CASE STUDIES
23
24
25
26
27
Igor
Roman Veliky
Marina
Anton Barannikov
Izabella Dudkina
OOO Krug
18
1031
3
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PL
28
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CORPORATE PROPERTY TAX
14
14
8
15
21
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(iv)
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
RATES AND ALLOWANCES
The following tax rates and allowance are to be used in answering the questions unless the
question states otherwise.
Children allowances
Children allowance
1,400 RR per child for the 1st and 2nd child (up to 280,000 RR)
3,000 RR for the 3rd child (up to 280,000 RR)
General limitation on “property” allowance
Investments in residential property and land for tax purposes
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Statutory exclusions from taxable income
Prizes and awards
Gifts at work
Support payments
2,000,000 RR (upper limit)
4,000 RR (upper limit)
4,000 RR (upper limit)
4,000 RR (upper limit)
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Maximum limit for social deductions listed below
120,000 RR
(medical, personal educational, non-state pension insurance and voluntary pension insurance and
additional insurance contributions for the accumulated part of labour pension – subject to certain
conditions set out in the law)
Educational deduction for children
50,000 RR (upper limit)
Professional deduction 1
20%
30%
40%
30%
40%
30%
40%
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– general
– architects
– music writer
– photographers
– sculptor
– designers
– film editors
Charity deduction
up to 25% of income
Gains on property sales:
– immovable property
– movable property
1,000,000 RR (upper limit)
250,000 RR (upper limit)
Housing allowance (deduction)
2,000,000 RR (upper limit)
Statutory per diem rate for personal income tax:
– for domestic business trips
– for foreign business trips
700 RR per day
2,500 RR per day
Threshold interest rates for personal income tax purposes
Rouble bank deposits
CB refinancing rate increased by 5%
Foreign currency bank deposits
9%
Rouble loans
2/3 of the CB refinancing rate
Foreign currency loans
9%
Threshold interest rates for profits tax purposes
Foreign currency loans
Rouble loans received
1
0.8 times the CBR refinancing rate
1.8 times the CBR refinancing rate
The relevant deduction for any specific profession is always given in the rates and allowances.
©2015 DeVry/Becker Educational Development Corp. All rights reserved.
(v)
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
Single threshold for social insurance contributions for the year 2014 (several categories of insurance
contributions subject to special incentives and reduced rates are not examined)
For employers (general) and individual entrepreneurs
Remuneration
per annum
up to 568,000 RR
Rate
30%
For employers (license, copyrights, civil contracts)
up to 568,000 RR
27.1%
For all categories of payers
excess over 568,000 RR
10%
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Expenses for profits tax purposes
Voluntary medical insurance expenses (subject to conditions set out in the law) are limited to 6% of
labour costs.
Voluntary life insurance expenses (subject to conditions set out in the law) are limited to 12% of labour
costs.
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Voluntary personal insurance against accident at work resulting in death or permanent physical
disability are limited to 15,000 RR per insured employee per annum.
Certain advertising expenses listed in the law are limited to 1% of sales revenue.
Reimbursement of interest on employees’ mortgage loans is limited to 3% of labour costs.
Entertainment expenses (subject to conditions set out in the law) are limited to 4% of labour costs for
the reporting period.
3 (upper limit)
Historic cost of fixed assets
40,000 RR (minimum)
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Special depreciation ratios
Fixed assets received in financial leasing
Allowances for receivables
General limitation
Aged 0-44 days
Aged 45-90 days
Aged more than 90 days
10% of sales
0% of receivable
50% of receivable
100% of receivable
Value added tax (VAT) rates
Standard
Veterinary products
Exports
Limit for VAT-exempt promo presents
18%
10%2
0%
100 RR (upper limit)3
General profits tax
20%
Tax on dividends for residents
Tax on dividends for foreign companies
9%
15%
Property tax rate
2
3
2.2%
Reduced rate
May not be included in rates and allowances provided in the exam
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(vi)
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
Personal income tax rates
Basic rate
Higher rate
13%
35%
Tax on dividends for residents
9%
Central Bank refinancing rates (notional)
15%
7%
5%
Number of days in calendar months for the year 2014
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31
28
31
30
31
30
31
31
30
31
30
31
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January
February
March
April
May
June
July
August
September
October
November
December
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1 January to 30 April 2014
1 May to 30 September 2014
1 October to 31 December 2014
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(vii)
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
SUPPLEMENTARY DATA
Depreciation groups and rates for the non-linear method
Depreciation group
Term of fixed asset useful life
Depreciation rate (per month)
from 1 year up to 2 years
14.3
2
more than 2 years up to 3 years
8.8
3
more than 3 years up to 5 years
5.6
4
more than 5 years up to 7 years
3.8
5
more than 7 years up to 10 years
2.7
6
more than 10 years up to 15 years
7
more than 15 years up to 20 years
8
more than 20 years up to 25 years
9
more than 25 years up to 30 years
10
more than 30 years
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1
1.8
1.3
1.0
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0.8
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(viii)
0.7
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
Question 1 OOO MIX
OOO Mix (“Mix”) purchases milk from different farms. It re-sells 20% of the milk to other companies
and processes 80% into ice cream. Mix uses the accruals method of income recognition.
Mix had the following types of income/expenses:
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income from rent of a piece of equipment to another company;
dividends paid to the parent company;
a fixed asset given free of charge to an unrelated company;
sold ice-cream to employees below market prices;
interest on bank loan accrued;
depreciation on ice-cream production line;
free meals to employees (not provided for in their labour contracts);
advances received from customer;
purchased milk from farmers;
penalties received from one customer for the breach of contract terms;
tax penalties paid to budget;
received a fixed asset from a parent company, which owns 60% of Mix’s capital;
donated a fixed asset to a school;
advance payment made to a supplier of milk;
recognised foreign currency exchange loss on a bank loan received in foreign currency;
sold truck used in business for two years;
recognised expenses on truck sale;
recognised positive currency differences on collection from customer;
provided financial aid to employees (“materialnia pomosch”);
bad debt written-off against an allowance for bad debts;
sold ice-cream;
made a contribution to a charter capital of a legal entity;
a bank loan received;
sold unprocessed milk;
incurred some expenses in excess of statutory norms;
made some gifts in cash and in kind to employees;
incurred some expenses, which are not justifiable and/or documentary proved.
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Required:
Assign to each of the above income/expense types its corresponding “basket”:
Income “baskets” I1 –
I2 –
I3 –
I4 –
Basket 1 – income from sales of goods produced by a taxpayer;
Basket 2 – income from sales of merchandise inventory;
Basket 3 – income from sales of fixed assets;
Basket 4 – non-operational income.
Expense “baskets” E1 –
E2 –
E3 –
E4 –
Basket 1 – expenses on production and sales of goods;
Basket 2 – expenses incurred on sales of merchandise inventory;
Basket 3 – expenses incurred on sales of fixed assets;
Basket 4 – non-operational expenses.
Indicate excluded income/expense as EXL.
(6 marks)
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STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
Question 2 OOO POLUS
Production company OOO Polus has the following types of expenses:
Required:
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depreciation of production fixed assets;
depreciation of other fixed assets;
10% (30%) write-off of the cost of production assets;
amortisation of intangible assets;
repair expenses;
medical insurance of production workers;
cost of materials used in production;
wages and salaries of production workers;
property insurance;
business training expenses;
social insurance contributions on salaries of administrative personnel;
advertising expenses;
wages and salaries of administrative personnel;
bad debt expense;
social insurance contributions on salaries of production workers;
foreign exchange loss.
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Classify each of the above expense into direct operational (D), indirect operational (I) or nonoperational (N) categories for CPT purposes.
(4 marks)
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Question 3 OOO PELMEN
In January Mr Hohlov registered OOO Pelmen (“Pelmen”). Projected income and expenses for the first
quarter are outlined below.
Materials for 141,600 RR (including VAT at 18%) will be purchased each month. It is expected that
10% of the materials purchased each month will not be used in production (i.e. will be closing
inventory at the end of each month and constantly growing).
Fixed assets worth 118,000 RR (including VAT at 18%) will be purchased in January, put in use in the
same month, but will be paid only in March. Depreciation on these assets is 7,000 RR per month. The
company does not use its right for 10% (30%) write-off.
In January Pelmen will make a 12,000 RR prepayment for insurance of its assets for the whole year
(insurance is not subject to VAT).
Pelmen will rent a building and will pay rent of 14,160 RR (including VAT at 18%) for the first six
months of the year. This rental payment will be made in March.
Pelmen will take a loan from Mr Hohlov. 9,000 RR of interest on the loan accrued for January – March
will be paid in March.
Planned monthly sales of Pelmen will be 177,000 RR (including VAT at 18%) (60% collected in the
same month, 30% in the next, 10% in the third month).
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STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
Required:
Prepare, for inclusion in a letter to Mr Hohlov, the following:
(a)
a comparison between accruals and cash method for CPT purposes based on planned
data for each month (i.e. January – March);
(11 marks)
(b)
the limitations on the usage of the cash method for CPT purposes;
(c)
a comparison between monthly and quarterly reporting options for OOO Pelmen.
(6 marks)
(3 marks)
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(20 marks)
Question 4 OOO ULEI
The following data is available for OOO Ulei (“Ulei”), an accruals basis taxpayer reporting CPT on a
monthly basis, as at 28 February 2015:
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Share capital – 250,000 RR
Assets – 4,200,000 RR
Liabilities – 3,950,000 RR (including loans from Funny Bee and Vinny Puh)
Two foreign companies jointly own Ulei – Funny Bee (20% ownership) and Vinny Puh (80%).
On 1 January 2015 Funny Bee gave Ulei 10,000 US dollars as a loan at 14% per annum. The loan term
is a year. Interest is paid on a monthly basis on the last day of each month.
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On 1 February 2015 Vinny Puh gave Ulei 30,000 US dollars as a loan at 12% per annum. The loan
term is three months. Interest and principle are paid back on 1 May 2015.
The following notional USD/RR exchange rates are to be used:
1 February
28 February
31
31.2
Required:
For each of the loans calculate:
(a)
tax-deductible interest and tax on deemed dividends (if any) for OOO Ulei for
February 2015 (not on cumulative basis); and
(6 marks)
(b)
foreign exchange losses on the principal for February 2015.
(1 mark)
(7 marks)
Question 5 OOO FESTIVAL
OOO Festival (“Festival”) runs different cultural events and incurs significant business entertainment
expenses. The following entertainment expenses have been properly documented and confirmed as
being for business purposes:
RR mln
Cost of official receptions
28.32 (including VAT)
Transportation costs
5
(no VAT)
Cost of cultural events held as a part of business:
Entertainment
56
(including VAT)
Cost of external translators
2
(no VAT)
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STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
Labour costs of Festival for the year are 187.5 million RR, related social insurance contributions are 55
million RR.
Required:
Calculate:
(a)
(b)
(c)
total business entertainment expenses potentially qualifying for CPT deduction; (1 mark)
the amount of business entertainment deduction for the year; and
(1 mark)
recoverable VAT.
(1 mark)
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(3 marks)
Question 6 OOO VIDEOMIR
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OOO Videomir (“Videomir”) purchased two new items of equipment. Item A was purchased and put
into use in December 2014 and item B in September 2014. Item A cost 40,000 RR and item B cost
60,000 RR. The estimated useful life of item A is three years (36 months) and of item B is three and a
half years (42 months).
In January 2015 Videomir also received a passenger car (fixed asset C) as a gift from a parent company,
which owns 51% in Videomir. The net book value of this car on the balance sheet of the donor is
320,000 RR and the market price of the car is 300,000 RR. The original cost of the car is 330,000 RR.
The car was used for two months; its total term of service life is five years.
Videomir decided to apply the non-linear method of depreciation starting 1 January 2015.
Required:
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Calculate depreciation expense of OOO Videomir for the first quarter 2015. Ignore VAT.
Assume that OOO Videomir will take advantage of immediate 10% and 30% write-off.
(7 marks)
Question 7 OOO TRIMPEX
OOO Trimpex (“Trimpex”) had a 360 million RR tax loss in 2013.
In 2014 Trimpex had 130 million RR of taxable profits before loss carry-forward.
In 2015 Trimpex had 200 million RR of taxable profits before loss carry-forward.
Required:
Calculate taxable profits for 2014 and 2015 after loss carry-forward. Explain the carry-forward
rules for the tax loss and show the amounts of losses utilised in each year and amounts to be
carried forward.
(3 marks)
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STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
Question 8 OOO BEGEMOT
OOO Begemot (“Begemot”) started its operations in April 2014. The tax accounting policy of
Begemot for the years 2014 and 2015 provides that the company creates a bad debt allowance in
accordance with the provisions of the Tax Code. The following data (in RR) is available in respect of
Begemot’s operations in 2014 and 2015 (the company uses an accrual method for the calculation of its
liabilities):
1. Sales revenue for the period
from the beginning of the year
to the date (including VAT at 18%) 708,000
2. Debt overdue by more than 90 days
as at the date (including VAT)
30 September 31 December 31 March
2014
2014
2015
944,000
1,416,000
590,000
40,000
60,000
80,000
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30 June
2014
–
60,000
100,000
140,000
116,000
4. Debts overdue by less than 45 days
days as at the date (including VAT)
40,000
26,000
28,000
34,000
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3. Debts overdue by 45 to 90 days
as at the date (including VAT)
In October 2014 Begemot made a decision to write off one bad debt in the amount of 28,000 RR
(including VAT at 18%) due to the liquidation of the debtor, and this debt was written-off from the bad
debt tax accounting register of the company.
Required:
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Calculate bad debt expense/(credit) for tax purposes in each of the last three quarters of 2014 and
the first quarter of 2015.
(6 marks)
Question 9 OOO METALURG
In December 2014 OOO “Metalurg” signed a contract with a French company for export of steel worth
100,000 USD. On 20 December 2014 it received a 100% prepayment from the French company. The
shipment and customs clearance date was 25 January 2015. Input VAT incurred in relation to this
shipment was 362,572 RR.
The following notional USD/RR exchange rates are to be used:
20/12/14
30.40
25/01
30.25
10/03
30.60
31/03
31.62
24/07
31.75
25/07
31.76
31/07
31.80
25/08
32.10
31/08
32.20
30/09
32.30
Required:
(a)
Calculate the VAT liability/recoverable VAT of OOO Metalurg assuming that the
export confirmation package was presented to tax authorities on 10 March 2015.(2 marks)
Explain what will be shown in VAT declarations and when. State the deadlines for VAT
declarations submission and for VAT payments.
(1 mark)
(b)
As for (a) assuming that the export confirmation package was presented on 25 August
2015.
(7 marks)
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5
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
(c)
Calculate late interest on the unconfirmed export up to the moment of its confirmation
(see (b)).
(3 marks)
(d)
State the contents of a standard package of documents to be submitted to the tax
inspectorate as a confirmation of zero-rate VAT on export.
(2 marks)
(15 marks)
Question 10 OOO COMPLEX
1.
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OOO Complex (“Complex”) is a production company. It started its operations in January 2011 and
uses the accruals method for tax purposes. The following data for 2015 is available (all amounts in
million RR):
Accrual sales and prepayments
Accrual sales for the year
Cash collections in the year:
From 2014 debtors
From 2015 debtors
1,239 (including VAT)
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590 (including VAT)
1,180 (including VAT)
Prepayments received from customers as at 31 December 2015
2.
141.6 (including VAT)
Production materials
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As at 1 January 2015 Complex had 40 worth of materials (net of VAT) in opening inventory.
In 2015 Complex bought new materials for 708 (including VAT). Only 75% of these
materials were paid for in 2015. Suppliers submitted VAT invoices for only 70% of materials
purchases. Also 160 worth of materials (net of VAT) were not used in production during the
year (i.e. accumulated in closing inventory). All materials were used for production purposes.
3.
Third parties’ services
During 2015 Complex received 106.2 worth of services from third parties (including VAT).
20% of this amount was still unpaid as at 31 December 2015. VAT invoices were provided
for 90% of the services. All services were used for production purposes in 2015. Moreover,
according to agreement contract Complex prepaid 36 million RR (including VAT) in
November 2015 to a supplier for services which should be rendered in the first quarter of
2016. VAT invoice was submitted by the supplier before the end of the 2015.
4.
Wages and salaries
Total salaries accrued amounted to 122 including:
wages and salaries of production workers
wages and salaries of administrative personnel
5.
90
32
Depreciation of fixed assets
Production fixed assets
Other fixed assets
140
40
All these depreciation expenses are allowed for CPT purposes.
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6
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
6.
Bank interest expense
On 31 January 2015 Complex took a 165 bank loan at 25% per annum. Loan term is one
year. Interest was paid on a quarterly basis starting 1 May 2015. The loan agreement does
not have a provision regarding possible changes in the interest rate.
7.
Business entertainment expenses
Total annual business entertainment expenses were 11.8 (including VAT of 0.8). Only 50%
of these were paid for in 2015.
Advertising expense
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8.
Total annual advertising expenses were 35.4 (including VAT). 50% of these expenses were
related to prizes used during mass advertising campaigns.
9.
Cost of production vs cost of goods sold
10.
Bad debt write-off
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20% of goods produced in 2015 were not sold in this year. There is no work in progress and
there was no opening inventory of finished goods.
During nine months of 2015 Complex created an allowance for bad debts of 54 in total for the
nine months. Actual write-offs of prior year bad debts amounting to 27 (including 4.5 VAT)
were made due to the official liquidation of the customers. The company made an evaluation
of its trade receivables as at 31 December 2015. According to this evaluation the amount of
allowance as at 31 December 2015 should be 36.
Taxes
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11.
Complex pays social insurance contributions on employees’ salaries at the rate of 30% (no
salary exceeds 624,000 RR); VAT at 18% and CPT at 20%. All materials, services and
expenses purchased by Complex are subject to 18% VAT rate unless stated otherwise.
Required:
(a)
Calculate taxable profits and profits tax of OOO Complex for 2015. Show separately all
elements of taxable income items and deductible expenses.
(11 marks)
(b)
Calculate VAT liabilities of OOO Complex for 2015. Show separately all elements of
output/input VAT payable to budget/recoverable from budget.
(6 marks)
(17 marks)
Question 11 DMITRIY KRUGLOV
Dmitriy’s gross salary in the year was 1,000,000 RR. In addition to the salary Dmitriy received an
advertising prize of 300,000 RR (gross). Dmitriy has incurred the following personal expenses in the
year:
(1)
Charity payment in the amount of 280,000 RR;
(2)
Payment of 5,000 RR to non-state pension security fund for his mother’s pension insurance;
(3)
Payment of 35,000 for his own second education in the Financial Academy of the Russian
Federation;
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7
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
(4)
Payment of 35,000 RR for his daughter’s education in the secondary school (another 25,000
RR were paid by his wife and she claimed the whole amount as a deduction in her personal
income tax declaration);
(5)
Payment of his mother’s treatment including: 50,000 RR for expensive surgery in state clinic
(included in the list of expensive treatment approved by the Government).
(6)
Payment for his mother’s prescribed medication in the amount of 15,000 RR.
(7)
Additional payments to “nakopitelnay” part of Dmitriy’s labour pension – 15,000 RR.
E
Required:
Calculate the social deductions potentially available to Dmitriy in the given circumstances.
Explain how these deductions should be claimed.
(7 marks)
Question 12 LORA
PL
Lora incurred the following medical expenses in the year:
43,500 RR paid to “Lose weight now” medical centre;
12,000 RR for her cosmetic surgery;
38,000 RR for the treatment of her son’s appendicitis in Moscow city clinic # 35;
25,000 RR to insurance company under voluntary medical insurance agreement;
2,000 RR for prescribed medicine for a stomach disorder.
She also spent 62,000 RR on her son’s daytime education in lyceum, and 60,000 RR on her evening
language courses.
SA
M
In the year Lora donated 72,000 RR in cash to a children’s sport centre in Moscow. She also purchased
12,000 RR worth of books for her regional children’s library.
In the year Lora’s gross income before deductions taxed at 13% was 290,000 RR.
Required:
(a)
Calculate the maximum possible amounts of Lora’s social deductions. Assume that all
educational institutions are licensed.
(5 marks)
(b)
List all limitations applicable to each type of social deduction.
(7 marks)
(12 marks)
Question 13 ROMAN
Roman is a popular writer specialising in detective novels. This year he published his new novel and
received 240,000 RR net as a copyright fee from the publishing company.
Required:
Calculate personal income tax and social insurance contributions on this income assuming
professional deduction of 20%.
(4 marks)
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8
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
Question 14 VERA
Vera is a single mother with a one-year-old son. She is 20 years of age. In the year she paid 72,500 RR
for her education in a licensed university where she attends evening classes (“ochnoe” education).
Vera earned 40,000 RR net of personal income tax over the summer period working in a health club as
an instructor. Out of this amount 8,000 RR was received in June, 11,000 RR in July and 21,000 RR in
August. This was her only income in the tax year. When calculating her taxable income the health club
gave her all allowable deduction(s).
E
Vera used all 35,000 RR of this money to pay for her education. Her father paid 33,000 RR and her
grandmother covered the remaining 4,500 RR out of her savings.
Required:
Calculate Vera’s taxable income and personal income tax for the year.
(7 marks)
(b)
Explain how Vera, Vera’s father and grandmother can obtain tax benefits with regard
to their spending on Vera’s education.
(2 marks)
PL
(a)
(9 marks)
Question 15 ALLA
Alla works in a sales department of a Moscow based cosmetic firm. She often travels in Russia and
abroad for business purposes.
In January she made several business trips by airplane as follows:
to St Petersburg on 10 January where she spent some days until travelling;
to Paris on 13 January where she stayed until 15 January;
back to Moscow on January 15 when her business trip was completed.
SA
M



On 20 January she submitted an expense report with the following data:
St Petersburg
Plane tickets to St Petersburg – 1,400 RR;
Taxi bill to get to the hotel – 200 RR;
St Petersburg hotel bill – 5,200 RR;
Restaurant bills in St Petersburg – 6,400 RR;
Tickets to Mariinsky theatre (where she went with a client) – 800 RR;
Hotel telephone bills for business calls – 600 RR;
Taxi bill to the airport – 250 RR.
Paris
Plane tickets – 20,700 RR;
Taxi bill to get to and from the airport – 40 EUR;
Paris hotel bill – 280 EUR;
Restaurant bills – 300 EUR.
Alla has got a full reimbursement for all of these expenses.
Assume the EUR/RR exchange rate on the date of expense report submission to be 42.00.
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9
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
Required:
Calculate the amount to be included in Alla’s taxable income for January.
(6 marks)
Question 16 LARISA
Larisa does not work. She has several apartments in Moscow. She rents out some of them and lives on
the rent payments received. She is not registered as an individual entrepreneur.
Larisa has received the following income in 2015:
E
Income from apartment № 1 – 25,000 RR per month (in January–May); 32,000 RR per month (in June
– December);
Apartment № 2 – 15,800 RR per month for the period January – April.
In April she sold apartment № 2 for 1,900,000 RR. She purchased this apartment in October 2013 for
700,000 RR.
Required:
PL
In August she bought a new apartment for 1,700,000 RR. The ownership was split 50/50 between her
and her husband.
(a)
Calculate Larisa’s taxable income and personal income tax for 2015. Assume that
Larisa has never previously claimed a housing incentive.
(4 marks)
(b)
Explain how she gets tax benefit from the apartment purchase. State any amount of
incentive that she can carry forward to future years.
(2 marks)
(6 marks)
SA
M
Question 17 MAXIM
Maxim registered as an individual entrepreneur in January 2015. He rented a small kiosk where he
sells newspapers, magazines and some miscellaneous items. He pays 2,900 RR of rent each month
starting January.
In January 2015 he also bought a small car to use in business. The car purchase price was 358,000 RR.
Annual depreciation rate applicable to the car was 14%, calculated monthly on a straight-line basis.
Maxim also employs an assistant to help him in business. The gross salary of the assistant is 14,000 RR
per month. Maxim paid 9,000 RR in respect of social insurance contributions for himself in December
2015.
Maxim’s monthly revenue for 2015 was 56,250 RR. The monthly cost of items sold was 20,415 RR.
Required:
(a)
Calculate Maxim’s taxable income and personal income tax for 2015. Ignore VAT.
(5 marks)
(b)
Explain Maxim’s personal income tax reporting and payment requirements.
(c)
Calculate Maxim’s obligations for social insurance contributions as an employer.
(1 mark)
(8 marks)
(14 marks)
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10
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
Question 18 STANISLAV
Stanislav is an individual entrepreneur. He runs a small cafe, where he employs a cook, a waiter and a
cleaning person.
The following information is available for the year:
PL
E
RR
1. Gross business revenue
1,600,000
2. Cost of goods sold
560,000
3. Rental payments
220,000
4. Employees’ salaries total comprised of:
620,000
cook’s salary
520,000
waiter’s salary
80,000
cleaning lady’s salary
30,000
5. Proceeds from sale of a truck used in the business
380,000
Original cost was 520,000 RR, accumulated depreciation
480,000
6. Total allowable social deductions
35,000
7. Social insurance contributions Stanislav paid for himself
5,000
VAT is ignored for calculation purposes.
Required:
(a)
Calculate Stanislav’s social insurance obligations.
(b)
Calculate the personal income tax of Stanislav for the year.
(1 mark)
(3 marks)
(4 marks)
SA
M
Question 19 IRINA
Irina is a freelance journalist writing articles for different newspapers. She is registered as an individual
entrepreneur. Her annual gross income on these activities in 2015 was 1,950,000 RR.
In 2015 Irina spent 270,000 RR (including VAT at 18%) on business-related expenses; however she has
lost the primary supporting documents related to these purchases. Irina rents a small office and pays
rent of 19,200 RR per month (including VAT at 18%). In April 2015 Irina also purchased a new item
of equipment for 192,000 RR (including VAT at 18%). The useful life of the equipment is four years,
which is in line with the useful economic life of similar equipment as determined by the Russian
Federation Government. Irina calculates depreciation expense for the equipment on a straight-line
basis. In December 2015 she paid social insurance contributions of 15,000 RR
In January 2015 Irina received a proposal from one of the largest newspapers to take a position as the
Head of News department for a gross salary of 105,000 RR per month.
Irina obtained the status of a non-VAT payer from the start of her business.
Required:
(a)
Calculate Irina’s tax liabilities for 2015 in her capacity as a freelance journalist based on
actual expenses. Ignore children allowance and 10% (30%) write-off on fixed assets.
(3 marks)
(b)
The same as in (a) based on professional deduction.
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11
(2 marks)
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
(c)
Compare Irina’s 2015 income after taxes in her capacity as an individual entrepreneur
(under both options (a) and (b)) to that offered as an employee of the newspaper.
(3 marks)
(d)
Explain the personal income tax reporting and payment obligations of an individual
entrepreneur.
(5 marks)
(13 marks)
Question 20 JANA
E
Jana works as an assistant manager in a supermarket. She earns 22,000 RR gross salary per month. In
addition to her salary Jana received the following benefits from her employer during 2015:
a performance bonus for 2015 results. She received 21,750 RR net of tax in January 2016 and
the same amount was received in February 2016. The bonus was accrued in December 2015;

free meals valued at 1,200 RR per month (provided for in Jana’s labour contract);

paid vacation in Cyprus with a value of 35,000 RR*;

special discounts of 20% on all purchases in the supermarket (discounts for the year totalled
6,500 RR);

a kitchen processor valued at 8,700 RR as an International Women’s Day gift*;

a microwave oven valued at 8,000 RR as a birthday gift*;

medical insurance contributions paid for Jana’s benefit totalled 10,000 RR (the term of
agreement is three years);

support payments (“materialnaja pomosch”) of 10,000 RR.
SA
M
PL

* These items were paid for out of the company’s after-tax profits.
Required:
(a)
Calculate Jana’s taxable income and personal income tax for 2015.
(5 marks)
(b)
Calculate the social insurance contributions on Jana’s income.
(3 marks)
(8 marks)
Question 21 ZHANNA
Zhanna works in an advertising agency. Her monthly gross salary is set at 32,000 RR.
On 9 August 2015 she obtained a loan from her employer to buy a car in the amount of 500,000 RR at
2% per annum. Loan term is two years. Interest is paid annually. First payment is due on 31
December 2015.
On 10 July 2015 Zhanna opened a 100,000 RR bank deposit for two years. First time interest was
credited to her bank account on 10 December 2015. No other interest payments were made in 2015 by
the bank. The deposit rate was 30%.
Required:
Calculate personal income tax accrued on Zhanna’s income for 2015.
(6 marks)
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12
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
Answer 1 OOO MIX
SA
M
PL
E
I4 –
income from rent of a piece of equipment to another company;
EXL – dividends paid to the parent company;
EXL – a fixed asset given free of charge to an unrelated company
I1–
ice-cream sold to employees below market prices;
E4 –
interest on bank loan accrued;
E1 –
depreciation on ice-cream production line;
EXL – free meals to employees (not provided for in their labour contracts);
EXL – advances received from customer;
E1 (80%)
E2 (20%) – purchased milk from farmers;
I4 –
penalties received from one customer for the breach of contract terms;
EXL – tax penalties paid to budget;
EXL – received a fixed asset from a parent company, which owns 60% of Mix’s capital;
EXL – donated a fixed asset to a school;
EXL – advance payment made to a supplier of milk;
E4 –
recognised foreign currency exchange loss on a bank loan received in foreign currency;
I3 –
sold truck used in business for 2 years;
E3 –
recognised expenses on truck sale;
I4 –
recognised positive currency differences on collection from customer;
EXL – provided financial aid to employees (“materialnia pomosch”);
EXL – bad debt written-off against an allowance for bad debts;
I1 –
sold ice-cream;
EXL – made a contribution to a charter capital of a legal entity;
EXL – a bank loan received;
I2
sold unprocessed milk;
EXL – incurred some expenses in excess of statutory norms;
EXL – made some gifts in cash and in kind to employees (not provided for in their labour contracts);
EXL – incurred some expenses, which are not justifiable and/or documentary proved.
¼ mark for each correct classification, max 6.
Answer 2 OOO POLUS
Depreciation of production fixed assets – D
Depreciation of other fixed assets – I
10% (30%) write-off of the cost of production assets - I;
Amortisation of intangible assets – I
Repair expenses – I
Medical insurance of production workers - I
Cost of materials used in production – D
Wages and salaries of production workers – D
Property insurance – I
Business training expenses – I
SIC on salaries of administrative personnel – I
Advertising expenses – I
Wages and salaries of administrative personnel – I
Bad debt expense – N
SIC on salaries of production workers – D
Foreign exchange loss – N
¼ mark for each correct classification, total 4.
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1001
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
Answer 3 OOO PELMEN
(a)
Comparison between accruals and cash method
Tax consequences of the accruals method
January
177,000
(27,000)
(108,000)
–
(1,000)
(2,000)
(3,000)
______
February
177,000
(27,000)
(108,000)
(7,000)
(1,000)
(2,000)
(3,000)
______
March
177,000
(27,000)
(108,000)
(7,000)
(1,000)
(2,000)
(3,000)
______
36,000
36,000
29,000
65,000
29,000
94,000
Taxable profits
(cumulative)
(½)
PL
Tax consequences of the cash method
Sales
(½)
(½)
(½)
(½)
(½)
(½)
(½)
E
Sales
VAT
Materials (120,000  0.9)
Depreciation
Insurance expense
Rent expense
Interest expense
February
159,300
Taxable profits/(losses)
(cumulative)
March
177,000
(1½)
(177,000  60%)
((177,000  60%) +
(177,000  30%))
(27,000)
(27,000)
(27,000)
(½)
(108,000)
–
(108,000)
–
(108,000)
(14,000)
(½)
(½)
(12,000)
–
–
______
–
–
–
______
–
(12,000)
(9,000)
______
(½)
(½)
(½)
(40,800)
______
(16,500)
______
(9,500)
______
SA
M
VAT (accrual method
only)
Materials
Depreciation (see
Tutorial note)
Insurance expense
Rent expense
Interest expense
January
106,200
((177,000  60%) +
(177,000  30%) +
(177,000  10%))
Tutorial note: The Tax Code provides that only fixed assets, which were paid for can be
depreciated for CPT purposes under the cash method. However it is unclear how to treat
depreciation accrued before the payment date (in this example depreciation accrued for
February). If only 7,000 RR of depreciation expense is recognised, no marks would be lost
due to this uncertainty.
Under the accruals method recognised accumulated profits are more than profits recognised
under the cash method by 103,500 RR.
(½)
This difference is largely due to the fact that under the cash method income is recognised only
after cash is collected.
(½)
Expenses are recognised on the cash basis only when they are actually paid.
(½)
Moreover, material costs are recognised only when they are paid and consumed in production.
(½)
Depreciation is recognised only on those fixed assets, which are paid for.
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1002
(½)
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
(b)
Limitations on usage of cash method
A taxpayer can use the cash method for CPT purposes only if its average sales of goods,
works, services, etc (without VAT and sales tax) for the previous 4 quarters did not exceed
1 million RR per quarter.
(1)
If a taxpayer chooses the cash method but during the tax period the taxpayer’s average sales
of goods, works, services, etc (without VAT and sales tax) exceeded 1 million RR per quarter,
it must recalculate its sales on the accruals basis starting at the beginning of the tax period. (½)
(½)
Once chosen a system should be applied consistently through the year.
(½)
E
Pelmen may choose between two monthly and one quarterly payment systems.
Availability of quarterly payment system is restricted (as explained below).
(c)
(½)
Comparison of reporting options (max 6 marks)
Monthly payment system – based on actual profits
PL
(i)
Under this system CPT payments are made based on the actual profits determined monthly on
a cumulative basis.
(½)
Monthly CPT reports are submitted not later than on the 28th day of the month following the
reporting one.
(½)
The reports are prepared on a cumulative basis.
The monthly payments are made by the 28th day of the month following the reporting one. (½)
SA
M
The annual CPT declaration is submitted not later than 28 March of the year following the
reporting. Payment of any outstanding CPT liability for the reporting year is made by the
same deadlines.
(½)
(ii)
Monthly payment system – based on estimated profits
Under this payment system, there are monthly advance payments of CPT, which are made by
the 28th day of each month in the amount of 1/3 of the estimated total CPT liability for the
quarter.
(1)
On the 28th day following the end of each quarter so-called “quarterly” advance payment is
made. Its amount is calculated as the difference between actual profits tax for the reporting
period less advance payments made.
(1)
For example in July taxpayer must calculate actual profits for the six months of the year and
the amount of CPT. On 28 July it must pay the difference between total CPT liability for 6
months and the total advance payments of CPT already made. On the same date monthly
advance payment for July is also due.
The tax returns are submitted under the following deadlines:

within 28 days following the last day of the reporting quarter for quarterly returns
(in a simplified form);
(½)

by 28 March of the following year for annual return.
(½)
Final tax payment is due:

by 28 March of the following year for annual return.
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1003
(½)
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
(iii)
Quarterly payment system – based on estimated profits
Under the quarterly payment system CPT returns are submitted each quarter under the
following deadlines:

not later than on the 28th day after the reporting quarter end (for 1st quarter, half a
year and 9 months);
(½)

not later than on the 28 March of the next reporting year for the annual tax
declaration.
(1)
E
Quarterly and annual tax payments are made according to the reporting deadlines.
(½)
Quarterly CPT payment system is available to newly-created entities with sales not exceeding
1 million RR per month or 3 million per quarter. If a taxpayer’s monthly sales exceed the
limit it must switch to CPT monthly payment system starting the following month.
(1)
(1)
PL
Answer 4 OOO ULEI
Loan from Funny Bee
Thin capitalisation rules do not apply to this loan, as the percentage of ownership is only
20%. Interest is deductible in full for tax purposes unless transfer pricing restrictions apply.
Tutorial note: Even though this is a loan from a related party, no information is given in the
question to allow any adjustment to be calculated, so it is assumed that the terms are “arm’s
length”.
(a)
Tax deductible interest for February
SA
M
10,000 USD  14%  28/365  31.2
(b)
(1)
Foreign exchange loss on loan
(10,000  (31 – 31.2))
(2)
3,351 RR
2,000 RR
(½)
Loan from Vinny Puh
Step 1:
Define whether loan is controlled
First condition (i.e. FLE has more than 20%) is met as Vinny Puh owns 80%. (½)
Second condition (i.e. loan amount exceeds net assets of a RLE by 3 times) is also met:
(30,000  31.2) ÷ 250,000 = 936,000 ÷ 250,000 = 3.744
(1)
Thus, the loan is considered as controlled.
Step 2:
Calculate capitalisation coefficient
Amount of controlled loan ÷ (Net assets  % of FLE’s ownership)  3
= 936,000 ÷ (250,000  80%  3) = 936,000 ÷ 600,000 =
1.56
Step 3:
(½)
(1)
Maximum amount of interest
Maximum deductible amount of interest =
actual interest accrued on controlled loan/capitalisation coefficient =
((30,000 × 31.2)  12%  27/365) ÷ 1.56 = 8,309 ÷ 1.56 =
5,362 RR
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1004
(1)
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
Step 4: Calculate tax on difference between accrued interest and maximum
deductible amount (“deemed dividends”)
(8,309 – 5,362)  15% = 2,983  15% =
(b)
447 RR
(1)
Foreign exchange loss on loan
(30,000  (31 – 31.2))
6,000 RR
(½)
Answer 5 OOO FESTIVAL
Total business entertainment expenses (net of VAT) qualifying for deduction
E
(a)
mln RR
24
5
2
___
Cost of official receptions (28.32 × 100/118)
Transportation costs
External translators
(b)
31
___
(1)
PL
Total
Business entertainment deduction
Limit is calculated based on 4% of labour costs (SICs are ignored):
187.5 × 4% =
(c)
7.5
(1)
Recoverable VAT
SA
M
VAT only in relation to entertainment expenses deductible for CPT purposes can be
recoverable, i.e:
4.32 of total potentially deductible VAT  7.5/31 =
1.05
(1)
Answer 6 OOO VIDEOMIR
Tutorial note: As the taxpayer decided to apply non-linear starting 1 January 2015 it is necessary to
determine NBV at that date and depreciation groups and rates and combine different fixed assets into
groups. 30% write-off can be applied to fixed assets included into the 3rd – 7th depreciation groups only.
Fixed asset A
Fixed asset A was purchased and put into use in December 2014 therefore depreciation starts from
January 2015. As the useful life equals exactly 3 years then depreciation group is determined as the
second (2) group. Depreciation rate is 8.8. Original tax cost taking into account 10% write-off =
40,000 RR – 10% = 36,000 RR. .
(½)
Fixed asset B
Useful life 3½ years means this fixed asset should be included in No. 3 depreciation group.
Depreciation rate (non-linear method) = 5.6.
Original tax cost = 60,000 – (30% × 60,000) = 42,000.
Number of month of usage before 1 January 2015 is 3 months.
Depreciation in 2014 is based on linear method.
NBV = 42,000 – (3/42  42,000) = 39,000 RR
(½)
(½)
(½)
(½)
Fixed asset C
The original cost of the car is the market value but not less than NBV of the donor and equals 320,000
in this case. No 30% write-off is applied as it is received free of charge.
(½)
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1005
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
The useful life is 5 years exactly which means that this fixed asset should be included in 3rd
depreciation group. Depreciation rate (non-linear method) = 5.6. Depreciation period starts 1 February
2015.
(½)
Therefore there are two groups of fixed assets:
(1)
Fixed asset A;
(2)
Fixed assets B and C.
Depreciation calculation for each group
Method 1 (all amounts in RR)
NBV
Group 2
NBV/depreciation
February:
Asset A NBV  8.8/100
NBV
Asset C Addition
3,168
32,832
39,000
(2,184)
______
PL
NBV
Asset B (see working above)
 5.6/100
Depreciation
E
NBV
Group 1
36,000
(3,168)
______
January:
Asset A
 8.8/100
36,816
(2,889)
______
2,184
_____
(½)
(½)
(2)
(½)
5,352
_____
2,889
(½)
29,943
320,000
______
SA
M
 5.6/100
NBV/depreciation
March:
Group 1 NBV × 8.8/100
Group 2 NBV × 5.6/100
356,816
(19,982)
______
19,982
______
22,871
_____
(18,863)
2,635
18,863
_____
(½)
(½)
21,498
_____
___
49,721
_____
(7)
st
Depreciation for 1 quarter
Method 2 (all amounts in RR)
NBV of Group 1 (Asset A) at 1 April 2015 (36,000 × (1 – (0.01 × 8.8%))3
Depreciation of Group 1 (Asset A) for 1st quarter (36,000 – 27,308)
Depreciation of Group 2 (Asset B) for January:
NBV of asset B (see Method 1 above)
36,816
NBV of Group 2 (Assets B and C) at 1 April 2015:
(356,816 × (1 – (0.01 × 5.6%))2
317,972
Depreciation of Group 2 (Assets B and C) for February and March
(356,816 – 317,972)
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27,308
______
8,692
2,184
38,844
______
49,720
______
1006
(1)
336,834
(2,635)
Total depreciation for 1st quarter
(1)
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
Answer 7 OOO TRIMPEX
All amounts in million RR.
2013 loss can be carried forward and utilised up to 2023 (10 years) in the full amount of 360.
(½)
In 2014 – 130 of loss can be utilised (no limitation applies to loss amount).
(½)
Taxable profits after loss is 0.
(½)
In 2015 – 200 of loss can be utilised (no limitation applies to loss amount).
(½)
Taxable profits after loss is 0.
(½)
E
The remaining part of the 2013 loss in the amount 30 (360 – 130 – 200) can be carried forward and
utilised up to 2023.
(½)
Answer 8 OOO BEGEMOT
30 September 31 December
2014
2014
31 March
2015
PL
30 June
2014
(1) Bad debt allowance as at the date
(Debt aged > 90 days)  100%
(Debt aged 45 – 90 days)  50%
40,000
50,000
–––––––
90,000
(½)
60,000
70,000
–––––––
130,000
(½)
80,000
58,000
–––––––
138,000
(½)
60,000
(½)
80,000
(½)
120,000
(½)
50,000
(½)
(30,000)
80,000
0
–––––––
50,000
(½)
(80,000)
120,000
28,000
–––––––
68,000
(½)
(120,000)
50,000
0
–––––––
(70,000)
(½)
SA
M
(2) Sales revenue limitation (10% of
sales revenue net of VAT)
0
30,000
–––––––
30,000
(½)
(3) Prior period b/fwd allowance
Allowance c/fwd **
b/fwd write-off
Bad debt expense/(credit)
0
30,000
0
–––––––
30,000
(½)
** Lower of (1) and (2)
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1007
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
Answer 9 OOO METALURG
(a)
VAT liability/recoverable VAT – confirmation 10 March 2015
December 2014
Metalurg will not pay VAT on advance payment received on 20 December 2014 because
export advances are not subject to VAT.
(½)
March 2015
E
Export will be confirmed on 31 March (last day of the quarter when export confirmation
package was presented).
(½)
Total refund
(½)
(½)
(362,572)
______
(½)
PL
Output VAT (100,000  31.62  0%)
Input VAT
RR
0
(362,572)
______
This amount is shown in the VAT declaration for the 1st quarter 2015 to be submitted by 20
April.
(½)
This VAT is not immediately available for recovery (there are 3 months for verification of
this amount by the tax authorities).
(½)
(b)
VAT liability/recoverable VAT – confirmation 25 August 2015
SA
M
December 2014
VAT treatment of advance payment is the same as in (a).
(½)
July 2015
On 25 July 2015 (the 181st day from the export date)
(½)
Metalurg will have to recognise an unconfirmed export amounting to
(100,000 × 30.25)
3,025,000 RR
(½)
The exchange rate is taken on the shipment date (i.e. on 25 January).
(½)
Output VAT is (3,025,000 × 18/100)
Recovery of input VAT on goods
VAT payable to the budget
Amounts are shown in amended VAT declaration for 1st quarter of 2015.
RR
544,500
(362,572)
181,928
(½)
(½)
(½)
(½)
VAT should be paid to the budget as soon as liability was defined and declared (i.e. 25 July
2015).
Tutorial note: Since 2006 the Tax Code requires revaluation of the unconfirmed export on
the payment receipt date. However this provision is not examinable to simplify the overall
calculation.
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1008
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
August – September 2015
On 30 September (the last day of the quarter in which export documents were submitted)
Metalurg will recognise confirmed export subject to zero-rate VAT.
(½)
Zero-rate VAT base is 3,230,000 RR (100,000 × 32.3)
(½)
E
Output VAT
0
(½)
Reverse of VAT refund from the budget
(544,500)
(½)
(non-confirmed VAT earlier)
This amount is shown in VAT declaration for 3rd quarter (½) to be submitted by 20 October.
(½)
This VAT is not immediately available for recovery (there are 3 months for verification of
this amount by the tax authorities).
(½)
(c)
Late interest calculation
PL
VAT is due for payment in three equal monthly instalments and late interest is calculated
starting 21 April (next day after 1st quarter VAT payment) and up to the date of actual
payment, which is 25 July (96 days in total). Changes in CBR rates are taken into
consideration:
(1)
SA
M
181,928  1/3  10 days  1/300  15%
181,928  1/3  20 days  1/300  7%
181,928  2/3  31 days  1/300  7%
181,928  (10 + 25) days  1/300  7%
(d)
RR
303
283
877
1,486
_____
(½)
(½)
(½)
(½)
2,949
_____
(2)
Documents to be presented as export confirmation
Contract (or its copy) between the Russian exporters and the foreign buyer for
exports of goods from the territory of Russia.
(½)

Commission agreement (or its copy) if export is through a commissioner.
(½)

Customs declaration (or its copy), stamped by the customs authorities at the Russian
state border.
(½)

Copies of transport documents confirming that the goods have been shipped outside
the territory of Russia, with a stamp of the customs authorities affixed at the state
border on these documents.
(½)

Tutorial note: A bank statement evidencing receipt of export proceeds is no longer required
as part of the standard package.
©2015 DeVry/Becker Educational Development Corp. All rights reserved.
1009
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
Answer 10 OOO COMPLEX
(a)
Profits tax liability
mln RR
Sales income (net of VAT) (1,239  100/118)
Prepayments as at 31 December 2014 (non-taxable)
mln RR
1,050
0
(½)
(½)
Direct expenses
(384)
(72)
(21.6)
(112)
_____
(1½)
(½)
(½)
(½)
E
Production materials (W1)
Production wages and salaries (W2)
SIC at 30%
Production depreciation (W4)
(589.6)
PL
Indirect operational expenses
Third parties’ services (W3)
Administrative wages and salaries
SIC at 30%
Entertainment expense (W6 )
Advertising expense (W7)
Depreciation of non-production fixed assets
(90)
(32)
(9.6)
(4.88)
(25.5)
(40)
_____
(½)
(½)
(½)
(1)
(1½)
(½)
(201.98)
Indirect non-operational expenses
SA
M
Bank interest expense (W5)
Bad debt expense (W8)
(37.75)
(63)
_____
(1)
(1)
(100.75)
_____
Taxable profits
157.67
_____
Tax rate
Tax amount
20%
31.53
_____
(½)
____
(11)
WORKINGS (RR mln)
(1)
Production materials
Opening inventory
Plus total materials purchased
Less: input VAT 708  18/118
Less: closing inventory
40
708
(108)
(160)
___
Materials consumed in production
Less: 20% of materials in goods not sold
480
(96)
___
Materials qualified for CPT deduction
384
___
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1010
(¼)
(½)
(¼)
(½)
__
(1½)
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
(2)
Wages and salaries and related SIC
Tutorial note: Wages and salaries of production workers (and related SIC) are classified as
direct expenses and allocated between cost of goods sold and cost of finished goods. (Those
of administrative personnel (and related SIC) are deducted in full in the tax period.)
90
(18)
___
Deductible
72
___
(3)
Third parties’ services
Services purchased net of VAT (106.2  100/118)
(½)
E
Wages and salaries of production personnel
Less: 20% in goods not sold
90
___
(4)
PL
Services are not classified as direct expenses by the Tax Code, thus no allocation to closing
inventory is required.
Depreciation
Tutorial note: Depreciation of production fixed assets is classified as direct expenses and
allocated between cost of goods sold and cost of finished goods. (Depreciation of other fixed
assets should be deducted in full in the tax period).
140
(28)
___
Deductible direct depreciation
112
SA
M
Depreciation of production fixed assets
Less: 20% in goods not sold
(5)
(½)
Bank interest expense
Interest starts from 1 February 2015 (i.e. 365 – 31 = 334 days) and is deductible for CPT
purposes (there is no indication that transfer pricing rules apply):
165  334/365  25% = 37.75
Tutorial note: Interest expense is classified as “other” expense and is not allocated to the
cost of finished goods.
(6)
Business entertainment
Business entertainment expenses are limited for CPT purposes to a maximum of 4% of labour
costs for tax purposes not including SIC (as SIC is not classified as “labour” expense by the
Tax Code).
Labour costs for tax purposes (direct + indirect): (90 + 32)
Deductible amount: (4%  122)
122
4.88
(½)
(½)
Tutorial notes: Business entertainment expenses are classified as “other” expense and are
not allocated to the cost of finished goods.
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1011
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
(7)
Advertising expense
Advertising expenses net of VAT (35.4  100/118)
Restriction on deductibility of advertising expenses related to prizes:
1% of sales revenue (1,050  1%)
No restrictions apply to other types of advertising expenses
30
(½)
10.5
15
___
(½)
(½)
25.5
___
(8)
Bad debt allowance
54
(27)
___
E
Allowance made during 9 months
Actual write-offs
Balance of allowance for bad debts
Allowance required c/fwd
27
36
___
9
___
PL
Allowance made in December
Total bad debt expenses (54 + 9)
63
___
Tutorial note: The 63 expense can be thought of either as the 27 write-off + the allowance
created at the end of the year or as the 54 allowance made during the year + the additional
allowance (36 – 27) created at the end of the year.
(b)
VAT
SA
M
mln RR
Output VAT
On 2015 sales
On prepayment
Total output VAT
189
21.6
_____
Calculation
1,239  18/118
141.6  18/118
(½)
(½)
210.6
_____
Input VAT
On 2015 materials
(75.6)
708  18/118 × 70% (supported by VAT
invoices)
(½)
On 2015 services
(14.58)
106.2  18/118 × 90%
On business entertainment
(0.35)
(4.88/(11.8 – 0.8)) × 0.8, VAT is
recoverable in proportion to expense
deductible for CPT purposes
(1½)
On advertising
(4.59)
(25.5/(35.4 – 5.4))  5.4, VAT is
recoverable in proportion to expense
deductible for CPT purposes
(1½)
On prepayment
(5.49)
_____
36 × 18/118
Total input VAT
(100.61)
_____
___
109.99
(6)
VAT payable/(recoverable)
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1012
(½)
(1)
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
Answer 11 DMITRIY KRUGLOV
The following deductions are potentially available:
(1)
Charitable deduction limited to 25% of his gross income taxed at 13%
Advertising prize is taxable at 35% rate
(2)
Four deductions (educational, medical, pension deduction non-state and additional payments)
are considered all together within 120,000 RR limitation:
5,000
15,000
35,000
15,000
Therefore Dmitriy can apply 70,000 RR for these social deductions.
(½)
In addition to the above social deductions Dmitriy can deduct 25,000 RR of the 35,000 RR
payments for his daughter’s education (not exceeding 50,000 RR per child for two parents,
and his wife claimed 25,000 RR in her PIT declaration)
(1)
and payment for expensive treatment of his mother in full amount of 50,000 RR.
(1)
PL
(3)
(½)
(½)
(½)
(½)
E
– payment to non-state pension security fund
– payment to “nakopitelnay” part of labour pension
– payment for own education
– payment for prescribed medication
250,000 (1)
(½)
All social deductions can be obtained by Dmitriy after the termination of tax period (year) and
submitting of PIT declaration to tax authorities.
(1)
If the four social deductions had exceeded 120,000 RR Dmitriy would choose which
payments to include as deductions and in what amounts, within limited amount.
(1)
Answer 12 LORA
Social deductions
SA
M
(a)
Medical deductions
“Lose weight”
Cosmetic surgery
Treatment of appendicitis
Medical insurance
Prescribed drugs
RR
0
0
38,000
25,000
2,000
______
(¼)
(¼)
(¼)
(½)
(¼)
Total before limitation
65,000
(½)
60,000
______
(½)
Total
Total after limitation
125,000
120,000
______
(½)
Her son’s education (limited to 50,000)
50,000
______
(½)
Educational deduction
Her own education (even evening classes qualify for a taxpayer herself)
Charitable contributions
Donation to the sports centre
Donation to the library (not in cash)
Total before limitation
Limitation (25% of gross income taxed at 13%) = 290,000  25%
Total after limitation
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1013
72,000
0
72,000
72,500
72,000
(½)
(1)
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
(b)
Limitations on social deductions
General limitations
All social deductions apply only to income taxed at 13%.
(½)
No carry-forward is available.
(½)
All deductions must be claimed by taxpayer himself upon tax declaration submission.
(½)
Maximum amount of social deductions (educational, medical, pension) is limited
to 120,000 RR (with some exceptions for educational and medical deductions).
(½)
E
Medical deduction
Deduction is granted in the amount of the expenses incurred by an individual:
on his own medical treatment in medical institutions of the Russian Federation; (½)

on medical treatment paid for the benefit of the individual’s parents and/or children
under 18 years (½) or spouse in medical institutions of the Russian Federation; (½)

on voluntary medical insurance contributions.
PL

(½)
The total deduction is limited to 120,000 RR (aggregated with two other deductions) except
for certain types of expensive medical treatment (as per a special list approved by the Russian
Federation government) (½). In this last case the deduction is given in the amount of the
actual medical expenses (½).
SA
M
Qualifying types of medical treatment are defined in the list approved by the RF Government.
Cosmetic surgery and weight loss programmes are not on the list (½). Therefore, no social
deduction is granted in relation to them.
Educational deduction
Deduction is granted in the amount of the expenses incurred by an individual:

on his own education or his sister/brother (120,000 RR aggregated with two other
social deductions); and

on his child’s education (up to 50,000 RR).
(½)
The tax deduction on a child’s education may not exceed 50,000 for both parents per
child (½). A child must be under 24 years of age (as a sister/brother must be).
(½)
No deduction is granted for children (individual sister/brother) studying in “zaochniy”
(distant) education. Evening class deduction is available to the taxpayer himself.
(½)
Education should be provided by an educational institution confirmed by a relevant
licence or another document.
(½)
Charitable contributions
The following charity donations qualify for tax deduction purposes:

charity donations made in cash to cultural, scientific, health and social security
organisations wholly or partially financed from the budget;
(½)

charity donations made in cash to sports and educational organisations for sports
purposes only (no budget financing is required in this case).
(½)
The deduction is limited to 25% of the gross income taxed at 13% rate.
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1014
(½)
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
Answer 13 ROMAN
Calculation of SIC and PIT
RR
Let Roman’s gross income be
Less: PIT
x
(x – 0.2x) × 0.13
__________
Net income received
(1)
240,000
__________
(1)
Gives: x = 267,857 RR
(½)
E
Solving: x – 0.8x × 0.13 = 240,000
PIT = 267,857  0.8  13% = 27,857
(½)
Income subject to SIC = 267,857 RR minus professional deduction of 20%
Income subject to SIC = 214,286 RR
(½)
PL
SIC is applied at special rate (used for copyright agreements):
SIC = 214,286 × 27.1% = 58,072 RR
Answer 14 VERA
(a)
(½)
Calculation of taxable income (in RR)
June
X
(X – 2,800) × 13%
8,000 (½)
SA
M
Gross salary
Less: tax
Net receipt
July
Y
(Y – 2,800) × 13%
11,000 (½)
August
Z
(Z – 2,800) × 13%
21,000 (½)
Gross income for June is calculated taking into account a first child deduction of 2 ×
1,400 RR:
X – (X – 2,800) × 0.13 = 8,000
0.87X = 7,636
X = 8,777
(1)
Gross income for July is also calculated taking into account a first child deduction for a single
parent as the cumulative income for June-July does not exceed 280,000 RR:
Y – (Y – 2,800) × 0.13 = 11,000
0.87Y = 10,636
Y = 12,225
(1)
Gross income for August is calculated in the same way as:
Z – (Z – 2,800) × 0.13 = 21,000
0.87Z = 20,636
Z = 23,720
(1)
Total gross income at work (X + Y + Z)
Less: first child deduction (2 × 1,400 × 3)
44,722
(8,400)
______
Taxable income
36,322
______
Tax at 13%
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4,722
1015
(½)
(½)
(½)
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
Tax as per income tax declaration
RR
44,722
Total gross income:
Less:
First child deduction
Educational deduction
(8,400)
(35,000*)
______
Taxable income:
(½)
1,322
______
Tax available for refund: (4,722 – 172)
172
(½)
4,550
(½)
E
Tax at 13%
* As Vera has documents confirming payment 35,000 RR.
Procedure with regard to social deductions
PL
(b)
Educational deductions will be granted to Vera at her written request upon submission of the
annual tax declaration.
(½)
Vera is eligible to get an educational deduction on the evening classes as it is her own
education.
(½)
Her father can claim also deduction in the amount of 33,000 RR for education as for children
up to 24 years old getting “ochnoe” education (limited to 50,000 RR per child for both
parents).
(½)
SA
M
The grandmother does not qualify for the deduction as she is not a parent of the student. (½)
Answer 15 ALLA
Items subject to PIT
In Russia
Plane tickets
Taxi bills*
Hotel bill
Restaurant bill
Theatre tickets
Phone bills
Less: Per diem allowance (3  700 RR)
RR
–
–
–
6,400
800
–
(2,100)
_____
(½)
(½)
(½)
(½)
(½)
(½)
(½)
5,100
_____
* Documentary proved transportation costs to the hotel/airport/train station are not taxable
under PIT (item 3 of art. 217 of the Tax Code).
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1016
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
Abroad
Plane tickets
Taxi bills
Hotel bill
Restaurants (300 Euro × 42)
–
–
–
12,600
Less:
(5,000)
(700)
_____
Per diem (France) (2,500 RR × 2)
Per diem (Russia)
(½)
(½)
(½)
(½)
E
6,900
_____
Total taxable amount
12,000
Answer 16 LARISA
Taxable income and PIT
PL
(a)
Taxable income from apartment № 1 (W1)
Taxable income from apartment № 2 (15,800  4)
Taxable gain on sale of apartment (W2)
Total taxable income:
Less: Housing incentive
Taxable income:
SA
M
Tax at 13%
WORKINGS
(1)
(½)
RR
349,000
63,200
900,000
_______
(1)
(½)
(1)
1,312,200
(850,000)
_______
(½)
(½)
462,200
_______
(½)
60,086
_______
(Marks not to be double-counted.)
Apartment № 1
Taxable income
January – May
June – December
RR
125,000
224,000
______
Total taxable income
349,000
______
(2)
(½)
(½)
Sale of apartment
Sales proceeds
Standard property deduction
Taxable gain on sale
©2015 DeVry/Becker Educational Development Corp. All rights reserved.
1017
RR
1,900,000
(1,000,000)
________
900,000
_______
(1)
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
(b)
Tax benefit and housing incentive
If too much PIT on rental income was paid during the year it will be available for refund upon
submission of Larisa’s annual tax declaration by 30 April 2016.
(½)
The housing incentive will be claimed in Larisa’s declaration for 2015.
(½)
The amount of Larisa’s incentive is 50% of 1,700,000 RR as the ownership in the new
apartment is split between her and her husband (50/50).
(½)
Answer 17 MAXIM
(a)
Calculation of taxable income and PIT
Item
Calculation
56,250 × 12
20,415 × 12
358,000 × 14% × 11/12
Rent expense
Salary expense
SIC on assistant’s salary
2,900 × 12
14,000 × 12
168,000 × 30%
Amount
RR
675,000
(244,980)
(45,943)
PL
Revenue
Cost of sales
Depreciation expense
SIC on business income
9,000
(½)
(½)
(1)
(34,800)
(168,000)
(50,400)
______
(½)
(½)
(½)
130,877
(9,000)
______
(1)
Taxable business income
121,877
______
PIT at 13%
15,844
______
SA
M
(b)
(½)
E
There is no unused portion of housing incentive to be carried forward to future years.
(½)
Reporting and payment requirements
Maxim will act in capacity of a tax agent with regard to salaries paid to his assistant
He is required to calculate the tax on a monthly basis cumulatively from the beginning of the
tax period in relation to income taxed at 13% and separately for each amount payable in
relation to income taxed at different rates. (½) The withholding is made from the amount
payable at the moment of payment. (½)
The tax withheld by Maxim should be paid to the budget not later than:

on the day of the actual receipt of cash in bank for payment purposes; or
(½)

the day of a wire transfer of income to the assistant’s bank account (or to a third
party’s account at his request);
(½)

the day following the day of the actual receipt of cash by the assistant in other cases. (½)
If the tax is withheld on income in-kind and on imputed income, this tax shall be paid on the
date following the date of actual tax withholding.
(½)
Payment of the tax out of a tax agent’s own funds is not permitted.
(½)
The data on cumulative income paid to the assistant is to be presented to tax authorities
by 1 April 2016.
(½)
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1018
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
Maxim will have to pay PIT on his own business income
He must make advance payments of the tax. (½) These payments are made based on
estimated income per a preliminary tax declaration. (½) Advance payments are made based
on payment orders issued by the tax inspectorate. (½)
The amounts and deadlines are as follows:



50% of the estimated annual tax liability by 15 July of the current year;
25% of the estimated annual tax liability by 15 October of the current year;
25% of the estimated annual tax liability by 15 January of the next year.
(½)
(½)
(½)
E
In case of significant increase/decrease (more than 50%) of actual income comparing to that
declared in the tax declaration on estimated income Maxim must submit a new declaration on
his estimated income.
(½)
(½)
Any outstanding PIT liability must be paid by 15 July 2016.
(½)
PL
Final tax declaration is submitted by 30 April 2016.
If PIT is overpaid it is refunded within 1 month after the date when the refund request was
submitted.
(½)
___
(c)
SIC obligations
max 8
___
Maxim is liable to SIC both on his minimal income and on payments to his employee:
50,400
9,000
______
Total SIC
59,400
______
SA
M
SIC on assistant’s salary (168,000 × 30%)
SIC on business income (as in Question)
(½)
(½)
Answer 18 STANISLAV
(a)
Calculation of SIC
Item
Cook
Waiter
Cleaning lady
Calculation
(520,000 × 30%)
(80,000 × 30%)
(30,000 × 30%)
Total SIC on employees’ salaries
©2015 DeVry/Becker Educational Development Corp. All rights reserved.
1019
Amount
RR
156,000
24,000
9,000
_______
189,000
_______
(1)
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
(b)
Calculation of PIT
Gross business revenue
Car selling price
1,600,000
380,000
Less:
Cost of sales
Rental payments
Salaries
SIC (on employees’ salaries + 5,000)
Car net book value (520,000 – 480,000)
Social deductions
Amount subject to PIT
304,200
_______
(½)
39,546
_______
(½)
PL
PIT at 13%
Answer 19 IRINA
(1)
(¼)
(¼)
(¼)
(¼)
(½)
E
(560,000)
(220,000)
(630,000)
(194,000)
(40,000)
(35,000)
_______
(a) & (b) Personal income tax
Sales
VAT on sales
(a) Based on
actual expenses
(b) Based on
professional deduction
1,950,000
1,950,000
0
0
Cost of sales (materials) (Note 1)
Depreciation (Note 2)
0
(390,000)
(1)
(31,949)
(1)
0
(230,400)
(½)
0
SIC
(15,000)
________
(½)
0
________
Taxable business income
1,672,651
________
(½)
1,560,000
________
(½)
217,445
(½)
202,800
(½)
SA
M
Rent (19,200 RR  12) (Note 3)
Tax at 13%
Note 1
Cost of sales (materials)
Irina would not be able to claim a deduction for the cost of materials since she had lost the primary
documents relating to the purchase of these materials.
As an alternative Irina can claim a professional deduction of 20% of income in which case she would
not be required to have primary supporting documents for these purchases.
1,950,000  20% = 390,000 RR
Note 2
Depreciation
The monthly depreciation rate is 1/(4  12)  100% = 2.08%
The depreciation cost of equipment includes VAT since Irina is not a VAT payer.
2.08%  8 months  192,000 RR = 31,949 RR
Note 3
Rent
The rental cost includes VAT as Irina is not a VAT payer.
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1020
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
(c)
Comparison
Option (b)
(20% deduction)
Income
1,950,000
1,950,000
1,260,000
(½)
Confirmed expenses
(262,349)
(262,349)
0
(½)
Not confirmed expenses
(270,000)
(270,000)
0
(½)
SIC
(15,000)
(15,000)
0
(½)
PIT
(217,445)
(202,800)
(163,800)
(½)
Net income
1,185,206
1,199,851
1,096,200
(½)
Option (b) is the best.
(d)
Option 3 (salary)
E
Option (a)
(actual expenses)
(½)
Reporting and payment obligations
PL
Irina must submit a tax declaration on her estimated business income. (½) This declaration
must be submitted within 1 month and 5 days after the day when such income was first
received. (½) (The tax inspectorate issues payment orders based on the preliminary
declaration taking into account all available deductions.)
Irina must make advance payments of the tax.(½) These payments are made based on
estimated income per a preliminary tax declaration. Advance payments are made based on
payment orders issued by the tax inspectorate. (½)
The amounts and deadlines are as follows:
(½)
(½)
(½)
The final PIT liability is paid by 15 July of the year following the reporting one.
(½)
SA
M
50% of the estimated annual tax liability by 15 July of the current year;
25% of the estimated annual tax liability by 15 October of the current year;
25% of the estimated annual tax liability by 15 January of the next year.
In case of a considerable (by more than 50%) increase/decrease of income compared to the
amount estimated in the first preliminary tax declaration the taxpayer must submit a new
declaration on estimated income. (½) (The tax inspectorate will then recalculate the advance
tax payments.)
The tax declaration on actual income received must be submitted not later than 30 April of the
year following the reporting one.
(½)
___
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1021
max 5
___
STUDY QUESTION BANK – TAXATION (RUSSIA) (F6)
Answer 20 JANA
Subject to PIT
264,000 (½)
50,000 (1)
14,400 (½)
35,000 (½)
6,500 (½)
8,700 (¼)
8,000 (¼)
(4,000) (½)
–
10,000 (¼)
(4,000) (¼)
_______ __
Subject to SIC
264,000 (¼)
50,000 (½)
14,400 (¼)
35,000 (¼)
–
(¼)
8,700 (¼)
8,000 (¼)
–
–
10,000 (¼)
(4,000) (¼)
_______ __
Taxable base
388,600 (4½)
_______
386,100 (2½)
_______
(a)
(b)
50,518 (½)
115,830 (½)
E
Salary (22,000 × 12)
Performance bonus (21,750  2  0.87)
Free meals
Paid vacation
Discounts
Kitchen processor
Microwave oven
Less: gift exemption
Medical insurance
Support payment
Less: exemption
Answer 21 ZHANNA
PIT on Zhanna’s income
PL
PIT at 13%
SIC (30% up to 624,000 RR)
Salary (32,000 × 12)
RR
384,000
______
(½)
(2)
(2)
PIT at 35%
3,697
_____
(½)
Total accrued PIT
53,617
_____
(½)
Total subject to 35%
2,630
7,934
_____
10,564
_____
WORKINGS
(1)
(½)
49,920
SA
M
PIT at 13%
Imputed interest income on loan (W1)
Taxable % on deposit (W2)
RR
(Marks not to be double-counted.)
Imputed interest on loan
Number of days in the period 10 August – 31 December: 144 days
Calculation of imputed interest on loan:
(500,000 × 144/365 × (5% × 2/3 – 2%))
(2)
(½)
2,630
(1½)
Taxable % on bank deposit
Number of days from 11 July – 30 September: 82 days
Number of days from 1 October – 10 December: 71 days
Taxable %:
100,000  (30% – (7% + 5%))  82/365
100,000  (30% – (5% + 5%))  71/365
(½)
(½)
4,044
3,890
_____
7,934
_____
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1022
(1)
E
PL
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