Payment of taxes and fees

Total taxes and contributions accrued in 2014
RUB 270.5 bln +12.9% compared with 2013

Share of Russian Railways tax proceeds to the Russian Federation in 2014 1.1 % Same level as 2013

The taxes and contributions paid in 2014 RUB 253.3 bln

Total payable taxes in 2014 amounted to RUB 270.5 bln, a 12.9% increase compared with 2013, including to:

Tax payments accrued for taxes and fees owed by Russian Railways
RUB bln 2013 2014 +/— %
Total taxes and fees 239.6 270.6 +31.0 112.9
Federal budget 28.0 58.0 +30.0 2.1 times
VAT 27.03 57.68 +30.65 2.1 times
Profit tax 0.80 0.16 –0.64 20.0
Other taxes to the federal budget 0.14 0.11 –0.03 78.6
Regional and local budgets 90.3 89.7 –0.6 99.3
Profit tax 5.60 0.00 –5.60 100
Personal income tax 54.32 54.24 –0.08 99.9
Property tax 28.42 33.50 +5.08 117.9
Land tax 1.66 1.68 +0.02 101.2
Transportation tax 0.19 0.19 0.00 100
Mineral extraction tax 0.009 0.009 0.00 100
Water tax 0.03 0.03 0.00 100
Other taxes to regional and local budgets 0.13 0.07 –0.06 53.8
Extra-budgetary funds 121.3 122.9 +1.6 101.3
Pension Fund 89.94 91.75 +1.81 102.0
Social Insurance Fund 10.68 10.69 +0.01 100
Health Insurance Fund 18.87 18.88 +0.01 100
Accident Insurance Fund 1.76 1.59 –0.17 90.3
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A total of RUB 253.3 bln were spent on the payment of current taxes (including offsets and refunds) in 2014, including:

The amount of taxes paid in 2014 increased by RUB 17.2 bln, or 7.3%, compared with the amount of tax payments made in 2013.

The amount of taxes paid to the federal budget grew by RUB 18.6 bln, or 73.6%, compared with 2013, while taxes paid to regional and local budgets decreased by RUB 2.9 bln, or 3.0%, and taxes paid to extra-budgetary funds increased by RUB 1.5 bln, or 1.3%.

Tax revenue paid by Russian Railways made up 1.1% of the budget system of the Russian Federation in 2014.

The overall tax burden amounted to 17.8% in the reporting year, an increase of 1.2% compared with 2013.

Tax payments (including offsets and refunds) by Russian Railways
RUB bln 2013 2014 +/— %
Total taxes and fees 236.1 253.3 +17.2 107.3
including:
Federal budget 25.3 43.9 +18.6 173.5
of which:
Valued added tax 23.4 43.3 +19.9 185.0
Profit tax 1.8 0.5 –1.3 27.8
Regional and local budgets 98.7 95.8 –2.9 97.1
of which:
Profit tax 15.5 7.5 –8.0 48.4
Personal income tax 53.9 54.5 +0.6 101.1
Property tax 27.3 31.7 +4.4 116.1
Land tax 1.7 1.7 0.0 100
Extra-budgetary funds 112.1 113.6 +1.5 101.3
including:
Insurance premiums 110.5 112.2 +1.7 101.5
Accident Insurance Fund 1.6 1.4 –0.2 87.5
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VAT

Russian Railways paid RUB 43.3 bln in VAT in 2014. The increase in VAT payments by RUB 30.7 bln (2.1 times) was primarily due to the transfer of the motorway section of the Joint Adler Road project to Alpika-Service in December 2014 under an exchange agreement with the Federal Railway Transportation Agency (VAT of RUB 14.2 bln charged) as well as a reduction in tax deductions.

Corporate profit tax

Due to the Company’s losses, it had no profit tax payable to the federal budget or the budgets of the constituent regions of the Russian Federation. The tax charged for income from equity participation in foreign organisations totalled RUB 0.13 bln in 2014. The Company spent RUB 8.0 bln on the payment of corporate profit tax, or 46.2% of the 2013 level.

Regional and local taxes

Russian Railways paid a total of RUB 95.8 bln to the budgets of the constituent entities of the Russian Federation and municipalities in 2014, or 97.0% of the 2013 level.

The decrease in tax payments to regional and local budgets compared with 2013 resulted from a reduction in profit tax payments to the budgets of the constituent entities of the Russian Federation by RUB 8.0 bln, or 51.6%.

Meanwhile, the payments of personal income taxes grew by RUB 0.6 bln, or 1.1%, compared with 2013 due to higher wages for Russian Railways employees.

The amount of property taxes charged in 2014 totalled RUB 33.5 bln, an increase of RUB 5.1 bln, or 17.9%, compared with 2013 due to the abolishment of benefits for railway transportation infrastructure facilities.

The Company spent a total of RUB 31.7 bln on the payment of property taxes in 2014, an increase of RUB 4.4 bln, or 16.2%, compared with the previous year.

Land tax charges and payments both totalled RUB 1.7 bln in 2014, or the same as in 2013.

Insurance premiums

Total insurance premiums paid to extra-budgetary funds amounted to RUB 122.9 bln in 2014, an increase of RUB 1.6 bln, or 1.3%, compared with 2013.

Insurance premium tariffs for payers making pay-outs to individuals in 2014 amounted to: 22% to the Russian Pension Fund, 2.9% to the Social Insurance Fund and 5.1% to the Federal Mandatory Medical Insurance Fund.

Federal Law No. 243-FZ dated 3 December 2013 introduced additional tariffs for insurance payments to the Russian Pension Fund for certain categories of Russian Railways employees.

At the same time, Federal Law No. 421-FZ dated 28 December 2013 “On Amendments to Certain Legislative Acts of the Russian Federation due to the Adoption of the Federal Law on the Special Assessment of Labour Conditions” applied additional tariffs for insurance premiums paid to the Pension Fund of the Russian Federation ranging from 0% to 8% depending on the labour conditions class (subclass) in 2014 instead of the set additional tariffs of 4% and 6% for certain categories of Russian Railways employees depending on the labour condition class established based on a special assessment of labour conditions conducted in the manner prescribed by the legislation of the Russian Federation.

In the absence of a workplace assessment based on labour conditions, the additional tariff of 4% and 6% had been applied to the categories of Russian Railways employees in question, respectively.

Additional insurance premiums of RUB 5.2 bln were paid in 2014 to fund the insurance-based portion of Russian Railways retirement pensions as a result of the additional tariffs established for insurance premiums.

The effective rate on insurance premiums (ratio of accrued insurance premiums versus the amount of payments and other remuneration to individuals) was 36.8% in 2014 (26.0% in 2013).

In accordance with Resolution No. 1101 of the Russian Government dated 30 November 2013, the maximum amount of insurance premiums to be charged to an individual taking into account indexation was RUB 624,000 per year as of 1 January 2014.

The increase in the maximum amount of insurance premiums to be charged from RUB 568,000 in 2013 to RUB 624,000 in 2014 led to growth of RUB 1.8 bln in the amount of insurance premiums charged.