Taxes throughout Russian history. In November, the Russian prince and his warriors went to the lands of Slavic tribes to collect tribute

Poliudie

 

In November, the Russian prince and his warriors went to the lands of Slavic tribes to collect tribute. And the prince went not only with his armed force but with all his family (in 1154, during the Poliudie executed by Yuri Dolgoruky, his son Vsevolod was born in one camp). The whole team stayed with their subjects throughout the winter. The tradition of hospitality was strictly performed: the host had to be helpful and friendly and provide an honored guest with everything while he was in his house. The peasants had to feed the prince and his squad, organize dinner parties at their own expenses. In April-May at the beginning of the navigation season, the prince returned in Kiev. Thus, initially princes, who spent their summers in the war, collected the taxes and the rest of the year, they were making the rounds of lands in the order to collect the tribute.

The prince shared the tribute with his warriors as they represented a kind of special class, the key tool in its political and commercial affairs. The tribute consisted of food (mainly wheat, rye, oats, cattle, poultry, and linen) as well as products from the forestlands (furs, wax, and honey). The tribute, which the Prince of Kiev had collected as a ruler, was used for trade: during the spring months the different goods collected in winter were supplied to the fair. A huge number of people arrived to the Fair near Kiev and some went further to Constantinople.

The size of tribute probably was not defined, and there were numerous abuses. In the year 945, when polyudie was headed by Grand Prince Igor, the prince was murdered. The reason was not levying tribute in itself but an attempt to gather more tribute. After the murder of Prince and suppression of rebelled slave tribe, the polyudie was canceled.

READING COMPREHENSION

Give a brief description of the process of collecting the tribute named Poliudie:

1. Who participated in the campaign of collecting tribute?

2. When did it take place?

3. How long did the process last and when did the prince return to Kiev?

4. What were the host’s duties according to the tradition of hospitality?

5. What did the prince do with collected food and products, were they used for trade?

 

Vocabulary notes

hospitality                         гостеприимство

honored guest              почетный гость

peasants                            крестьяне

squad                                          зд. дружина

at their own expenses        за свой счет

making the rounds                      объезжать

in the order to                    с целью

suppression                                подавление

rebelled                              взбунтовавшийся

UNIT 3

PART 1                  

TOPIC FOCUS: Special tax treatments

Discuss these questions with a partner.

1. Who can get a special tax treatment?

2. Where is the best location in respect of taxation?

3. Can the simplified taxation system be an excellent financial planning tool?

Exercise 1.

Practice reading the following words and collocations.

a) аccess; agency; although; association; authorities; concession; emergence; essential; initial; initiative; laboratories; legislation; major; otherwise; ownership; patent; recreational; regime; requirement; therefore; triangular; venture;

b)accelerated depreciation; administrative barriers; administrative-territorial entities; agreement procedures; application acceptance; automobile tires; consumption of goods and services; created or acquired; highly qualified foreign staff; high-tech components; legal possession; special tax treatments; specific criteria; status; tax exemption; unified social tax; volume of scheduled investments;

c) be applied to; be engaged in; be entitled to; be exempt from; be granted to; be guaranteed by; be in demand; be intended for; be satisfied; be subject to; be worth; conduct; prevent; take into account; qualify; take benefit of.

 

Special tax treatments

Special tax treatments include the following: the simplified system of the taxation of small businesses; the system of taxation in free economic zones; the system of taxation in closed administrative-territorial entities; and the system of taxation during the fulfilment of contracts of concessions and production-sharing agreements.

There are several special tax regimes in the Russian Federation: a simplified tax system, a uniform tax on imputed income, a patent system of taxation and a unified agricultural tax.

The present simplified tax system was introduced by the Federal Law No. 104-FZ of 24 July 2002, and is a special system that can only be used by small businesses and individual entrepreneurs. The system allows legal entities and individual entrepreneurs to replace the obligation to pay a number of significant taxes (corporate profit tax, VAT, assets tax, unified social tax and tax on income from the entrepreneurial activities) with a single unified tax. 

The unified tax under the simplified tax system is chosen by the taxpayer as either 6 per cent of turnover or 15 per cent of the difference between revenues and certain allowable expenses. Yet tax rates are varied for different tax regimes. If a taxpayer is an individual entrepreneur, he or she is exempted from paying a personal income tax, VAT, and a tax on the property of physical persons. Social dues are paid by both companies and individuals.

The simplified taxation system is intended for small business and therefore there are certain restrictions that prevent larger companies from using the system. The system cannot be used by:

· companies and entrepreneurs earning more than 50 million roubles (about $525,000 at the time of writing) of income during a calendar year;

· companies having branch offices and/or more than 25 per cent corporate ownership;

· companies and entrepreneurs engaged in certain activities (banking, insurance, gambling, and some other businesses);

· companies and entrepreneurs employing more than 100 employees;

· companies having amortized assets worth more than 100 million rubles (about $3,500,000);

· other companies and entrepreneurs meeting some specific criteria.

It should be noticed that Russian accounting requirements are very demanding and time consuming. They often require a large number of forms to be completed and filed even if the company is not conducting any business. Often these forms must be filed in person by a company employee and this can mean waiting in line outside the tax office for hours. For this reason, simplified accounting and reduced tax filing requirements are often bigger bonus to small businesses than reduced taxation!

Although the limits placed upon turnover and the limits placed upon corporate ownership effectively limit the application of small business tax preferences to the very smallest of small businesses, the benefits of the system are significant enough that any business that could be structured to use these benefits should seriously consider doing so.

It is important to note that the Russian Government is seriously considering expanding the definition of companies and entrepreneurs that will qualify to use the simplified taxation system. It is anticipated that a new definition would vastly raise the turnover limits and remove the corporate ownership limitation.

Therefore, when planning a start-up in Russia it will be important to see if the current simplified taxation regime could be applied to the venture. If it could be applied based on turnover but not based on corporate ownership, it may be appropriate to consider whether the very real advantages offered by the legislation are worth the individual owners holding a Russian company directly.

 

Exercise 2.