The paper "Russian New Transfer Price Review" is a perfect example of a business case study. To every country, taxes matter a lot and therefore each country must design and develop tax policies that achieve its objectives. This is because economic and political environments are becoming complex. Tax ratios vary depending on factors such as opportunity and choice. Countries that have access to rich natural resource revenue have levels of ratio. However, in most countries, tax ratios vary depending on the income level, and it rises if the per capita income rises.
The best tax system should be developed by taking into consideration a country’ s economic structure, its public service needs and its capacity to administer taxes among many other factors. For example, the public needs and services may exceed the income of the people and therefore a government should take that into consideration. In 2011, Russia made very important tax laws as a response to the economic crisis, especially on the interest rate. The rules became effective as of 2015 and the new transfer pricing system made Russia be the best country worldwide with an effective transfer pricing system making it a potential centre for foreign investment despite the political instability experienced in the country.
This paper aims to evaluate these Russian tax laws regarding their efficiency, simplicity, and fairness. The paper is also going to focus on the compliance of the new transfer pricing to the traditional transfer pricing. Russia’ s Tax System Russia has uniform rates of tax on an individual’ s income, and this system does not consider the income level of an individual. Every person who is considered to be a permanent resident of Russia is liable for tax on his income as an employee and also as a self-employed person.
Those who work overseas also pay some tax to the country. The foreign citizens in Russia are charged tax according to the income they earn in Russia. For most incomes, the individuals are liable for 13 percent tax while non-residents pay a tax of about 30%. For the employed persons, it is the work of the employer to ensure that every month he deducts the tax. The self-employed on the other hand are mandated to file their annual report on tax.
Work CitedFeinschreiber, Robert, and Margaret Kent. Transfer Pricing Handbook: Guidance for the OECD Regulations. Vol. 588. John Wiley & Sons, 2012.