Russia Corporate Tax Guide 2026 — налог на прибыль (25%)

налог на прибыль Overview

Corporate profit tax in Russia (налог на прибыль организаций) is governed by Chapter 25 of the Russian Tax Code and administered by the Federal Tax Service (ФНС / FNS). The tax applies to all Russian legal entities (ООО, АО, ПАО, and other forms) as well as foreign companies that have a permanent establishment in Russia. The tax year is the calendar year (1 January to 31 December). Taxpayers are required to compute taxable profit independently and file periodic returns.

From 1 January 2024, the standard rate was increased from 20% to 25% as part of a broader tax reform. The rate change was designed to fund increased government spending. The reform also introduced progressive NDFL rates for individuals and adjusted various deductions and incentives for businesses. For most companies, the effective rate increase was partially offset by the ability to claim accelerated depreciation and expanded R&D deductions. Transition rules applied for tax periods straddling 2023 and 2024, with profit for the full 2023 year taxed at 20% and profit from 2024 onward at 25%. All Russian legal entities, regardless of their organisational form, are subject to corporate profit tax unless they qualify for a special tax regime such as the Simplified Tax System (УСН / USN), the Unified Agricultural Tax (ЕСХН), or the Patent System (ПСН). Companies on USN, for example, pay tax on revenue or revenue-minus-expenses at reduced rates (typically 6% or 15%) instead of profit tax. However, USN-eligible companies must meet strict criteria: revenue under approximately 265.8 million RUB, fewer than 130 employees, and residual asset value under 150 million RUB. Once a company exceeds these thresholds, it must switch to the general regime and pay profit tax.

Tax Rate Structure

The standard corporate profit tax rate of 25% is split between the federal budget and regional budgets as follows:

Federal share — 8%: The federal portion (8%) is paid to the federal budget. This rate is fixed and cannot be reduced by regional authorities. The federal share is calculated on the total taxable profit of the company. For certain categories of taxpayers, such as resident companies of special economic zones (SEZs) or participants in regional investment projects, the federal rate may be reduced to 0% for a specified period.

Regional share — 17%: The regional portion (17%) is paid to the budget of the constituent entity of the Russian Federation (oblast, krai, republic) where the company is registered. Regional authorities have the right to reduce their share of the rate for certain categories of taxpayers down to a minimum of 13.5%. This means the total effective rate can be as low as 21.5% (8% federal + 13.5% regional) for companies that qualify for regional reductions. Common categories eligible for regional rate reductions include: (a) resident companies of industrial parks and technology parks, (b) participants in regional investment projects, (c) small and medium-sized enterprises (SMEs) in priority sectors, (d) companies operating in the Far East and Arctic zones, and (e) organisations employing disabled persons or operating in social sectors.

IT company reduced rate — 5%: A special reduced rate applies to Russian IT companies that are accredited by the Ministry of Digital Development (Минцифры). Qualified IT companies pay profit tax at 5% (0% federal + 5% regional) through 2026, provided they meet specific criteria: (a) at least 90% of revenue comes from IT activities (software development, implementation, maintenance, database services, etc.), (b) the company is accredited as an IT organisation by the Ministry of Digital Development, and (c) the company has at least 7 employees on average. The reduced rate is one of several incentives for the Russian IT sector, alongside reduced social contribution rates (7.6% instead of 30%) and exemption from VAT on software sales. The 5% rate applies to profit for tax periods from 2021 through 2026. For 2027 onward, the rate may revert to the standard rate or a new incentive regime may be introduced. Companies that lose their IT accreditation mid-year must apply the standard rate for the entire tax period. Additionally, the 5% rate applies only to profit from qualifying IT activities; if the company also engages in non-IT activities, separate accounting is required, and the standard rate applies to non-IT profit.

Taxable Base

The taxable base for corporate profit tax is the company's profit, defined as revenue minus deductible expenses, as calculated under tax accounting rules (налоговый учёт / НУ). Revenue includes income from sales of goods, works, and services, as well as non-operating income such as interest, rental income, exchange rate differences, and income from property leasing. Certain income is exempt, including contributions to charter capital, targeted financing, and certain grants.

Deductible expenses include: (a) material expenses (raw materials, supplies, packaging, fuel), (b) labour costs (salaries, bonuses, mandatory and voluntary insurance contributions), (c) depreciation of fixed assets (straight-line or non-linear methods), (d) interest on loans and borrowings, subject to thin capitalisation rules, (e) advertising and marketing expenses (limited for certain types of advertising), (f) R&D expenses (with a 1.5× multiplier for certain categories), (g) insurance premiums for compulsory and voluntary insurance, (h) taxes and levies (other than profit tax itself and penalties), (i) expenses for maintaining leased property, (j) consulting, legal, and information services, (k) training and professional development of employees, (l) representation expenses (limited to 4% of labour costs), and (m) travel and transportation expenses.

Non-deductible expenses include: (a) dividends and other profit distributions, (b) penalties and fines transferred to budgets, (c) contributions to charter capital, (d) expenses for acquiring or creating depreciable property (capitalised and depreciated), (e) expenses for assets provided free of charge, (f) membership fees in political organisations, and (g) interest on loans used for prohibited purposes. The thin capitalisation rules (правила недостаточной капитализации) limit interest deductions on controlled debt. For loans from foreign related parties or loans guaranteed by such parties, interest is deductible up to 30% of EBITDA (earnings before interest, taxes, depreciation, and amortisation) computed for tax purposes. The 30% threshold applies through 2026; previously the threshold was 50% (2015-2023). Interest exceeding the 30% limit is treated as dividends for tax purposes subject to withholding tax. The thin cap rules apply if the controlled debt exceeds equity by more than 3 times (for Russian companies). If a company has no controlled debt, the general interest deduction rules apply: interest is deductible within the "range" of 75% to 125% of the Central Bank key rate, increased by 5 percentage points for loans in foreign currency.

Depreciation: Fixed assets are divided into 10 depreciation groups with useful lives from 1 year to over 30 years. The straight-line method is the most common, but the non-linear method may be used for certain asset groups. Accelerated depreciation (increasing factor of up to 2 or 3) is available for certain assets, including leased property and assets used in the scientific and technical sphere. A bonus depreciation (амортизационная премия) of up to 30% of the initial cost is allowed for fixed assets in groups 3-10, and up to 10% for groups 1-2. Intangible assets (patents, trademarks, software licences with exclusive rights) are also depreciable.

Inventory valuation: Companies may use FIFO or weighted average cost for tax purposes. The LIFO method is not permitted for tax accounting. Reserves for doubtful debts, warranty repairs, and upcoming vacation pay are deductible within specified limits. Provisions for restructuring or general contingencies are generally not deductible until actual expenditure occurs.

Loss Carryforward

Russian tax law permits companies to carry forward losses (убытки) indefinitely. As of 2024, the loss carryforward is no longer limited to 10 years — it can be applied to reduce future taxable profit in any subsequent year without an expiration date. However, through 2030, the loss carryforward is capped at 50% of the current year's taxable profit. This means a company with taxable profit of 10 million RUB in 2025 can offset at most 5 million RUB with losses from previous years, paying profit tax on the remaining 5 million RUB.

Documentation requirements: Taxpayers must maintain primary documents confirming the amount of the loss and the period in which it arose. Losses must be reflected in the tax registers and tax returns for the year in which they were incurred. Losses from different activities (e.g., ordinary operations versus non-operating income) must be tracked separately. If a company undergoes reorganisation (merger, demerger, acquisition), the loss carryforward rules apply with specific restrictions. In an acquisition, the acquiring company may use the losses of the acquired entity only if the acquisition was for valid business purposes and not primarily for tax avoidance. Losses incurred before 2007 may still be carried forward under transitional rules, but the amount of pre-2007 losses that can be used is generally limited. For companies that switch from USN (Simplified Tax System) to the general regime, losses incurred under USN cannot be carried forward to reduce general regime profit tax. Similarly, losses incurred under the general regime before switching to USN are forfeited. Losses must be reported in the tax return even if they are not used in the current year; failure to report a loss in the year it arises permanently forfeits the right to carry it forward.

Tax Reporting

Corporate profit tax is paid through advance payments and an annual settlement. The method of making advance payments depends on the company's revenue:

Quarterly advance payments: Companies with average quarterly revenue of less than 15 million RUB over the preceding four quarters may pay profit tax on a quarterly basis. The quarterly advance payment is due by the 28th day of the month following the quarter (28 April, 28 July, 28 October). An additional payment is due by 28 March for the annual settlement.

Monthly advance payments: Companies with average quarterly revenue exceeding 15 million RUB must make monthly advance payments. The monthly payment is based on the estimated profit for the month, with actual profit reported quarterly. Monthly payments are due by the 28th of each month. Alternatively, companies may elect to pay based on actual profit each month, which requires filing monthly tax returns.

Annual tax return: The annual tax return for profit tax must be filed by 28 March of the year following the tax period. The return is filed electronically through the FNS's electronic document management (ЭДО) system. Paper filing is not accepted for companies with more than 100 employees or for those required to have an electronic signature (all legal entities since 2023). The annual return includes the tax calculation for the year, a breakdown of advance payments, and schedules for certain types of income and expenses (e.g., interest income, dividends, income from securities).

Electronic filing: All corporate tax returns are filed through the taxpayer's personal account (личный кабинет налогоплательщика) or through a certified electronic document management operator. The FNS conducts desk audits (камеральные проверки) of all filed returns. A desk audit typically takes 2-3 months, during which the FNS may request supporting documents, explanations, and additional information. If the FNS identifies discrepancies, it may issue a request for clarification, and the taxpayer has 5 business days to respond. If the discrepancies are not resolved, the FNS may assess additional tax, penalties, and fines. The rate of penalties for late payment of profit tax is 1/300 of the Central Bank key rate per day for the first 30 days of delay and 1/150 from day 31 onwards (increased from 1/300 for all days post-reform). Criminal liability for intentional tax evasion applies if the underpayment exceeds certain thresholds: 15 million RUB over 3 years (large amount) or 45 million RUB over 3 years (especially large amount), with penalties ranging from fines to imprisonment.

Accounting Differences (ПБУ vs НУ)

Russian companies must maintain both accounting records (бухгалтерский учёт) under Russian Accounting Standards (ПБУ) and tax accounting records (налоговый учёт / НУ) under Chapter 25 of the Tax Code. The two accounting systems differ significantly, creating permanent and temporary differences that give rise to deferred tax assets and liabilities:

Key differences: (a) Depreciation — accounting depreciation may use different useful lives and methods than tax depreciation; bonus depreciation (амортизационная премия) is available for tax but not for accounting, creating temporary differences. (b) Revenue recognition — accounting revenue may follow IFRS or ПБУ 9/99 standards, while tax revenue is recognised when the right to receive it arises (or on an accrual basis under the accrual method). (c) Loss provisions — provisions for doubtful debts are deductible for tax purposes only up to 10% of revenue (for debts over 90 days overdue), while accounting provisions may be higher. (d) Interest expenses — thin capitalisation adjustments under tax rules create permanent differences. (e) Representation expenses — limited to 4% of labour costs for tax, while accounting has no such limit. (f) R&D expenses — a 1.5× multiplier is available for tax purposes under certain conditions, creating permanent differences. (g) Voluntary insurance premiums — deductible for tax only if the insurance type is listed in the Tax Code. (h) Differences in the valuation of assets and liabilities — such as revaluation of fixed assets (permitted in accounting but not in tax) and exchange rate differences (recognised differently under ПБУ 3/2006 and tax rules).

Deferred tax assets and liabilities (ОНА / ОНО): Temporary differences are accounted for using ПБУ 18/02 "Accounting for Corporate Profit Tax Settlements." Deferred tax assets (отложенные налоговые активы / ОНА) arise from deductible temporary differences and loss carryforwards. Deferred tax liabilities (отложенные налоговые обязательства / ОНО) arise from taxable temporary differences. Permanent differences (постоянные разницы) give rise to permanent tax assets (ПНА) or permanent tax liabilities (ПНО) that do not reverse over time. The current tax expense (текущий налог на прибыль) reported in the income statement is the sum of the tax on accounting profit adjusted for permanent differences, deferred taxes, and any tax credits or surcharges. Profit tax on dividends received (taxed at source) is shown separately. Public companies and certain other entities are also required to prepare IFRS financial statements and reconcile IFRS profit to Russian accounting profit, which involves additional deferred tax calculations under IFRS (IAS 12). The FNS may request IFRS reconciliations during tax audits for large taxpayers.

FAQs

Do foreign companies pay Russian corporate tax?

Foreign companies without a permanent establishment in Russia are subject to Russian tax only on certain Russian-source income, including dividends, interest, royalties, and rental income from Russian property. This tax is typically withheld at source at rates specified by the Russian Tax Code or applicable double taxation treaty (typically 15% for dividends and 20% for interest/royalties, subject to treaty reduction). Foreign companies that have a permanent establishment (PE) in Russia are subject to profit tax on profits attributable to the PE at the standard 25% rate, plus a branch profit tax of 15% on the after-tax profit (equivalent to a dividend from the PE to the foreign head office). The PE definition in Russian tax law is broad and may include a construction site lasting more than 30 days, a dependent agent concluding contracts in Russia, or a fixed place of business through which the foreign company carries out business activities. Management services provided from abroad may also create a PE if they are considered to be performed through a fixed place in Russia. Many tax treaties provide a 12-month threshold for construction PEs and specific exemptions for preparatory and auxiliary activities. However, treaty protection requires the foreign company to certify its residence with the FNS. Sanctions-related restrictions may affect the ability of certain foreign companies to repatriate profits, and profit tax branches of "unfriendly country" companies face additional regulatory scrutiny.

What is the thin capitalization rule?

The thin capitalization rule (правила недостаточной капитализации) limits interest deductions on controlled debt — debt owed to a foreign related party or debt guaranteed by a foreign related party. Controlled debt exists if the amount of such debt exceeds the borrower's equity by more than 3 times. For banks and leasing companies, the threshold is 12.5 times. If the debt-to-equity ratio exceeds 3:1, interest on the excess is treated as dividends for tax purposes and subject to withholding tax at 15% (or lower treaty rate). The deductible interest is limited to 30% of EBITDA (through 2026), calculated for tax purposes. Interest exceeding the 30% EBITDA threshold is carried forward to future periods if the thin cap rules do not apply, otherwise it is recharacterised as dividends. The rules apply separately for each controlled debt relationship. Participation exemption is not available for dividends arising from thin cap recharacterisation for the Russian recipient. For non-controlled debt, interest is deductible within the limits set by the Central Bank key rate plus a spread. Foreign-owned companies with significant intercompany debt should carefully monitor their debt-to-equity ratio and EBITDA levels to optimise interest deductions. A recent trend in Russian tax administration has been increased scrutiny of thin capitalisation structures involving foreign related parties from friendly and neutral countries.

How are dividends taxed?

Dividends paid by a Russian company to a Russian legal entity shareholder are subject to profit tax at 13% (increased from 0% for qualifying intercompany dividends if the recipient owns at least 50% for at least 365 days). The 0% participation exemption remains available for certain qualifying conditions, but the scope has been narrowed. Dividends paid to a foreign legal entity are subject to withholding tax at 15% (or a lower treaty rate, typically 5-10% under most tax treaties). Dividends paid to Russian individuals are subject to NDFL at 13-15% (progressive rate). The company paying dividends acts as the tax agent and must withhold the tax at source. Tax on dividends is payable within the standard deadlines for profit tax returns. The recipient company includes dividends in its taxable base but receives a tax credit for the withholding tax.

What if I have losses from previous years?

Losses from previous years can be carried forward indefinitely to offset future taxable profit. However, through 2030, only 50% of the current year's taxable profit can be offset by past losses. Losses must have been properly documented and reported in the year they arose. If you fail to report a loss in the original tax return for the loss year, you may lose the right to carry it forward. Losses from different types of activities are tracked separately, and losses incurred under special tax regimes (such as USN) cannot be carried forward to the general regime. If your company undergoes reorganisation, specific rules govern the carryforward of losses. There is no carryback of losses in Russia.