Simplified regime, benefits and pitfalls: what to consider for a business that plans to operate in several countries

Going to foreign countries, Russian business gets acquainted with unusual tax requirements, restrictions of the banking system and the nuances of working with VAT. Anastasia Shcherbinina, founder of the outsourcing company My Business Corporation, explains what companies planning to work in other countries should pay attention to.

Familiar Russian system

For all its shortcomings, the Russian tax system is quite diverse. Small and medium businesses can use special modes. Regional authorities regularly reduce tax rates for such enterprises and introduce benefits.

Tax regimes in Russia

1. The General System of Taxation (OSNO).
2. Simplified taxation system (STS).
3. Patent taxation system (PST), for individual entrepreneurs only.
4. Unified agricultural tax (ESKhN).
5. Professional Income Tax (PIT).

From 2022, another experimental regime has been introduced in four regions of Russia — automated simplified taxation system.

Other countries

The taxation systems of the CIS countries, Uzbekistan, Kazakhstan and Belarus are in many ways similar to the Russian system, but still have some nuances.

Uzbekistan

In 2019, a radical tax reform took place in the country, a new Tax Code appeared. The radical reform was aimed at increasing budget transparency, lowering rates, and increasing tax revenues to the treasury by a third.

At the same time, the tax burden on businesses has decreased, the country has become more business-friendly — and many companies from Russia are moving there.

They can work remotely there:

• IT companies,
• consulting
• services
• trading companies trading through this country.

Public catering or retail chains will not be able to register there, but in fact they will not be able to work in another country.

Kazakhstan

A more developed country in terms of the tax system — even commodity business here can be conducted remotely. There are many outsourcing offers around the warehouse, logistics.

Maximum operations can be delegated without being physically in the country, it is enough to open a legal entity by proxy.

The country has a low VAT, so it is profitable to export goods from Russia there. Having bought goods in Russia, the entrepreneur reimburses 20% VAT, and selling in Kazakhstan, he pays only 12%.

Companies with revenues below 19 million rubles per year can use the simplified taxation system. USN in Kazakhstan — this is 3% of income (however, it cannot be used in the provision of consulting, accounting services and activities in the field of law).

With a turnover of up to 7.5 million rubles a year, you can work without VAT.

In Kazakhstan, there is a limited time for issuing an electronic invoice after the shipment of goods — the document must be sent within 15 calendar days from the date of the transaction. Entrepreneurs from Russia often do not know this and pay fines for overdue accounts.

Currently, there is no ban on remote businesses in Kazakhstan, but the situation can change at any time, so you should keep your finger on the pulse.

Georgia

This country has wonderful taxes for sole proprietors — 1%. Condition — be on the territory of Georgia and conduct activities from there. Do the same from Russia — illegal.

Suitable for entrepreneurs who work with clients from European countries.

Being in Russia, it is now problematic to receive revenue from them, and if you are ready to relocate to Georgia, you can solve this problem and at the same time save on taxes.

UAE and Dubai

This direction is becoming more and more popular right before our eyes because of the ease of obtaining a visa for Russians. In Dubai, the main bureaucratic difficulties are concentrated around the opening of a new company, especially when it comes to catering: a lot of checks and controls.

For example, when opening an account, you may need an impressive package of documents for the founder-legal entity. Any procedure may be refused without explanation. But after the opening and start of work in the usual mode, the business is not checked for no good reason.

There are no payroll taxes in the UAE now. At the same time, there is a VAT (VAT) of 5% in the country, and the submission of financial statements is required. In many cases, it is necessary to conduct a mandatory or initiative audit.

From June 1, 2023, a 9% corporate tax will appear in the country. At the same time, there are no VAT, corporate tax and customs duties in the free economic zones of the country.

5 tips for doing business in multiple countries

Get Serious

It is necessary to appoint a leader or several leaders who will manage and control the company's entry into new markets. Each of the leaders can be responsible for his direction. For example: CIS, Asia, UAE.

If you have not decided on the country, formulate the goal of entering the international market

You need to understand what kind of operations the company will carry out, and then compare this list with the working conditions in different countries. After that, it will become clear which country is the most suitable.

Contact the experts

They can be tax consultants, an outsourcing company, or just another businessman with experience in a foreign country. They will tell you what to pay attention to and warn against mistakes.

For example, in Kazakhstan, the legislative content of tax regulation has been developed. There are many consulting and audit firms that can provide high-quality and detailed advice.

There are more law enforcement practices in the country, but it will take time to get used to some methods of calculating taxes.

In Uzbekistan, where the new Tax Code came into force only on January 1, 2020, peer review is only developing. Therefore, if possible, you should consult with several experts.

Study the social rituals of other countries

For example, in Uzbekistan it is customary to always bargain — national tradition.

Carefully read the agreement between Russia and another country

To save on taxes and avoid fines. If there is no such agreement, taxes will have to be paid twice.

If there is an agreement:

1. carefully analyze the clauses that your trades fall under;
2. check how they are reflected in contracts;
3. Clarify who will withhold which taxes based on the results of these transactions.

For example, many people think that such agreements provide for a choice in which state the company will pay tax. In fact, more often the tax is withheld in the first contracting state, and the rest (if the rate is different) is paid or eliminated according to the rates specified in a separate article of such an agreement on the avoidance of double taxation.