In the text, find the answers to the following questions. 1. Who is a taxpayer for profit tax purposes in Russia?

1. Who is a taxpayer for profit tax purposes in Russia?

2. What is a permanent establishment of a foreign legal entity?

3. What is the basis of taxation for the corporate profit tax?

4. What tax rate does the Tax Code establish? How does it work?

5. In what cases are the forms of income not subject to the corporate profit tax?

6. How are the gains received from sales of capital assets taxed?

7. What is a reporting period for taxpayers?

8. In what case is the calculated profit tax paid at the place of subdivision location?  

 

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

1.  (two words)   Income minus costs.                   ______________

2. (two words)             An entity that is recognized by the law as a legal person.

 ______________

3. (two words)             A fixed place of business that a taxpayer of one country has in another country, thus rendering the taxpayer liable to that second country's taxation.                                                    _______________

4. (two words)             Loans, bonds, leases, and other debt instruments owed by a corporation.                                                            _______________

5. (two words)             The collection of taxes on the same income by two countries.                                                                       _______________

6. (two words)             Tangible property that is likely to remain in the possession of the owner for an extended period time. _______________

7. (two words)             Money that shareholders invest in order to start or expand the business.                                                        _______________

8. (two words)             A reserve of money set aside for some purpose.

_______________

9. (two words)             The total amount raised from an initial public offering.

_______________

10.  (two words)   The average cost of acquiring a prospect or a customer.

_______________

 

 

Exercise 4. Sentence completion.

Read the text and complete it with the following words.

levy        depreciation             tax rates                    government spending

profits    by all levels     economic production

DEFINITION OF CORPORATE TAX

A (1) ___________ placed on the profit of a firm, with different rates used for different levels of profits. Corporate taxes are taxes against (2) __________ earned by businesses during a given taxable period. They are generally applied to companies' operating earnings and (3) __________ have been deducted from revenues.

Corporate taxes are usually levied (4) _________ of government. Corporate (5) _________ and laws vary greatly around the world, as different governments and countries view corporate taxation in different ways. For example, those in favor of lower corporate tax rates point to the possibility for greater (6) __________ if companies are taxed less. While others see higher corporate tax rates as a way to subsidize (7) ______________ and programs for the nation's citizens.

 

Exercise 5. Text completion.

(a) Read this article about Corporate Profit Tax in which some headlines are missing. Discuss with a partner what headlines you would expect to find in each gap.

Corporate Profit Tax

1. _________________________

 

Regional revenue is derived mainly from Corporate Profit Tax (CPT), which is levied at a standard rate of 20 percent on pre-tax profits. Previous limits on the deduction of expenses have been abolished and nearly all business expenses are currently considered fully deductible when related to the daily operations of a business and properly documented by receipts.

 

2. _________________________

The Tax Code defines the exact procedure for the deduction of expenses. What is significant is that this procedure also differs from standard Russian accounting practice, which results in Russian companies being compelled to complete both statutory and fiscal accounting.

 

3. _________________________

A company’s tax on dividend income is set at 9 percent. Under certain terms, dividend income is entitled to exemption when received by companies that maintain a controlling interest in the business. Specifically, when a founding Russian shareholder (which may be either a business entity or an individual, according to Russian Corporate Law) owns at least 50 percent of a Russian company or foreign subsidiary paying dividends for no less than 365 days with an investment exceeding 500 million rubles ($17.07 million), the double taxation of dividends is eliminated. Foreign entities located in tax haven jurisdictions are exempt from this rule and are subject to dividend taxation.

 

4. __________________________

Small businesses with annual sales of less than 60 million rubles ($2.05 million) are entitled to the use of a simplified taxation system for which banks, insurers, foreign companies, and certain other professions and businesses are ineligible. To be eligible, a company must employ less than 100 workers and its assets must not exceed 100 million rubles ($3.4 million). Tax is assessed either on gross receipts at 6 percent, or on profits before income tax at 15 percent. The choice is left to the taxpayer. An eligible business may also decide whether to use the simplified system or not.

 

5. ___________________________

If during the course of a year a business becomes ineligible for the simplified system, it continues to operate according to that system through the end of the year. At the end of the tax year, the company must then recalculate its liability according to general taxation rules from the moment it became ineligible to participate in the simplified system. With tax imposed at 6 percent on gross receipts, this system is generally used by small businesses with negligible profits. IT companies, like most B2B companies, choose to file under the rules of general taxation, because the number of available exemptions is higher.

 

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

A   The conditions of a simplified taxation system for business if it becomes

    ineligible

B   A simplified taxation system

C   The important features of the Tax Code

D  Dividend taxation

E   Regional revenue formation

 

 

Exercise 6.