In the text, find the answers to the following questions. 1. What was Russia warned about?

1. What was Russia warned about?

2. What happened in 1996?

3. What can you say about tax reforms until that time?

4. What changes were there in 1993?

5. What happened to the ratio of taxes from 1993 to 1994?

6. What can you say about the state of GDP in Russia at that time?

7. How much tax revenue was realized in 1996?

8. What can you say about profit taxes and personal income taxes in 1993?

9.  What about the VAT? How is it charged?

10.  How is VAT administered?

11.  What is a major revenue source?

12.  What are excise taxes levied on?

13. Why has the rate on imports been kept higher than for domestic products?

14.  What can you say about taxes on trade in the mid-1990s?

15.  Why was Russia's taxation agency established? When?

16.  What are the drawbacks of the tax administration system?

17.  What can you say about the current system of tax administration?

What has been changed?

Exercise 3. Find a word in the text that matches each definition below. The words appear in order.

1. Serious, important, or useful in some way                  ______________

2. (three words) The amount of revenue remaining from a corporate enterprise after all expenses—including labor, materials, etc.     ______________

3. (three words) A direct tax on an individual's income. ______________

4. (two words) Gross revenue.                                  ______________

5. (two words) An economy in which a substantial proportion of economic decisions is taken by the use of markets.                ______________

6. The process in which the substance of a thing is completely destroyed, used up, incorporated or transformed into something else. ______________

7.  (two words) A tax on the sale or use of specific products or transactions.

______________

8. (two words) Published list of charges, prices, rates, etc., arranged or organized in a particular order.                                   ______________

9. (two words) Taxes paid above the cost of an exported or imported good from one country to another, and can be impacted by international treaties.

______________

10. (two words) When taxes owed for the previous year are paid in the current year.                                                                                ______________

 

Exercise 4. Sentence completion.

Read the sentences and complete them with the following words.

Eurobonds      limiting           derivatives       tax accounting

exempt             merge                       taxpayers

1. Two taxation options have been proposed for ___________ to be issued starting from 1 January 2014.

2. Option 1 would fully _________ the interest income of foreign companies that are actually entitled to such income and are not tax residents of offshore jurisdictions. 

3. Plans call for reviewing the approach to ________ interest expenses and establishing specific thresholds. Moreover, income under the prescribed limit would not be subject to transfer pricing controls.

4. The Key Trends propose to _______ tax baskets for transactions with quoted securities, for quoted derivatives and for the result from main activity.

5. The document also spells out the possibility of merge baskets for transactions with non-quoted securities and ___________.

6. Plans also call for possibility to expand the number of __________ that can account for all transactions in one tax basket (currently only dealers are entitled to do so).

7.  In order to simplify ___________, the document proposes justifying prices only for those transactions with securities and derivatives that are treated as controlled transactions under the new transfer pricing rules.

8.

Exercise 5. Text completion.

a) Read the article in which some headlines are missing. Discuss with a partner what headlines you would expect to find in each gap.

Tax policy

(1) __________________________

The Russian tax system includes federal, regional and local taxes. While federal taxes are payable in all Russian regions, regional and local taxes are applicable to companies registered or doing business in the relevant region and municipality.

 

(2) __________________________

The Russian tax system has undergone significant revision since 1999 when the Tax Code Part I was enacted. This law combines provisions relating to general tax principles, rights and obligations of taxpayers, tax authorities, and tax administration.

 

(3) __________________________

 Later, since after 2001, the regulations on all taxes were revised and incorporated in the Tax Code Part II. Through this reform the tax administration became more transparent and predictable, and the number of taxes and the overall tax burden were reduced significantly.

 

(4)  __________________________

The current income tax rates are particularly low, even in the international context, being 20 percent for companies and 13 percent for Russian tax resident individuals. Still, many aspects of the Russian tax system are subject to significant uncertainty. Further, the substantive provisions of Russian tax law and the interpretation and application of those provisions by the Russian tax authorities may be subject to more rapid and unpredictable change (possibly with retroactive effect) and inconsistency than in jurisdictions with more developed tax systems.

 

(5) __________________________

    Over the past few years, the Tax Code was adopted to streamline tax administration and reduce tax burdens. Important revisions to corporate income tax (in Russian terminology “profit tax”) include reduction of the tax rate from 24 percent to 20 percent, introduction of thin capitalization rules and participation exemption rules for dividends, softening of depreciation rules, and extending deductions (including for interest expense) to make them adequate in the current financial crisis. In the area of VAT, positive changes include exemption for transactions with IP rights (except for trademarks) and certain types of R&D, extension of the tax period from a month to a quarter and the permission of offset for input VAT included in advance payments. Russian tax practice has been known for, in some cases, a contradictory and inadequately aggressive approach by tax authorities and inconsistent application of good-faith taxpayer criteria. The tax environment has improved remarkably since the Supreme Commercial Court confirmed taxpayers’ rights to optimize their tax burden and suggested the concept of a “justified tax benefit”.

b) Match these headlines (A-E) with the gaps in the article (1-5).

A Recent developments

B Great changes

C The problems of the tax law development

D New changes in the Tax Code

E Various types of taxes

 

Exercise 6.