Trade Tax in 2024: What You Need to Know
Since 2024 a new mechanism – the Trade Tax (TT) will come into effect in Moscow, impacting individual entrepreneurs and legal entities engaged in sales activities. This tax represents a quarterly payment that all trading enterprises are required to make. It’s important to note that, as of now, this regime is not applied in other regions of Russia and is relevant only for Moscow.
What Is the Trade Tax?
The Trade Tax is a mandatory payment levied on retail outlets regardless of sales volume, product range, or property ownership status. This means that if you conduct trading activities, you are obligated to pay the tax. Moreover, the tax is charged for each trading outlet, which can significantly increase the financial burden for entrepreneurs, especially those managing multiple locations.
Who Is Required to Pay the Trade Tax?
The tax applies to all entities engaged in trade using either movable or immovable property. This includes:
– Stores and supermarkets: both large chains and small retail outlets.
– Stationary structures: trading spaces without halls, excluding gas stations.
– Mobile units: trade conducted using vans and other vehicles.
– Retail markets: locations where goods are sold directly to consumers.
The tax is calculated separately for each retail outlet. Therefore, if you own multiple stores, you will be required to pay the tax for each one.
How Is the Trade Tax Calculated?
The calculation of the Trade Tax in Moscow has its own features. Fixed rates are set for retail outlets up to 50 square meters, and these rates are the same for everyone. This means that entrepreneurs operating spaces of 10 or 40 square meters will pay the same amount, regardless of differences in sales volumes.
For larger properties exceeding 50 square meters, the tax is calculated per square meter. It’s important to note that the tax rates vary depending on the administrative district where the retail outlet is located. The highest rates apply in the Central Administrative District (CAD), which could significantly affect the financial performance of businesses operating there.
Conclusion
The Trade Tax in 2024 presents a new challenge for Moscow-based entrepreneurs, requiring a careful approach to business planning. It is crucial to assess in advance how this tax will impact your financial model and prepare for its payment.
Given that no other regions have introduced a similar mechanism, Moscow’s entrepreneurs will face unique business conditions requiring adaptation and strategy adjustments.
Stay informed about upcoming government initiatives to ensure you don’t miss critical information that could impact your business.
