This document provides an overview of land tax regulations in Russia written by Jon Hellevig, Anton Kabakov, and Artem Usov of Awara Group. It defines taxpayers and exemptions for land tax, describes how the tax base is calculated based on cadastral or market land value, outlines tax rates that vary from 0.01-1.5%, and provides specifics on land tax laws in Moscow and St. Petersburg.

1. Authors: Jon Hellevig, Anton Kabakov, and Artem Usov.
Jon Hellevig, Managing partner of Awara Group Anton Kabakov, Partner of Awara Group Artem Usov, Partner of Awara Group
LinkedIn: http://www.linkedin.com/in/jonhellevig LinkedIn: http://ru.linkedin.com/pub/anton- LinkedIn: : http://www.linkedin.com/in/artem-
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E-mail: jon.hellevig@awaragroup.com E-mail: anton.kabakov@awaragroup.com E-mail: artem.usov@awaragroup.com
Website: www.awaragroup.com Website: www.awaragroup.com Website: www.awaragroup.com
This blog post represents an updated excerpt from the soon to be published Awara Russian Tax Guide.
Authors: Jon Hellevig, Anton Kabakov, and Artem Usov.
Publishing date: 01.02.2013, considering the Russian tax laws in force at the date and case law up to date.
LAND TAX
The land tax is a local tax regulated by Chapter 31 of the Tax Code.
Taxpayers
Taxpayers of the land tax are organizations and individuals, who own land or enjoy right of inheritable
lifelong possession, or right of permanent (perpetual) use.
Exemptions in form of reduced tax rates are established in relation to some socially protected categories
of people such as disabled persons (article 391(5). Some organizations are totally exempt from the land
tax. (art.395) among them are residents of special economic zones (for a limited period) and religious
organizations. Some additional exemptions to the tax may be set in local regulations (article 387 (2)).
Certain types of land are exempt from the tax, such are:
(i) land on which objects of cultural and historical heritage are located
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2. (ii) land held by defense, security and customs authorities
(iii) land officially recognized as forest
(iv) land under state-owned water basins (with some exceptions)
(v) land which cannot be freely traded or inherited due to restrictions in the law. (In Russian
jurisprudence this is referred to as “land withdrawn from civil law circulation”).
Tax Base
The tax base is the cadastral value of the land. This value is determined in accordance with the Russian
Land Code (art. 66) and the Law “On state immovable property cadaster” of 24July 2007.
The cadastral value is calculated as a result of either a state cadastral value or an independent land
valuation (Land Code Article 66).
In a decision of 2011 the Constitutional Court (N 281-О-О) ruled that for determining the market value of
land, the cadastral value is set as a percentage of the market value.
The Supreme Commercial Court (No. 913/11 of 28.06.2011) stated that that if a taxpayer does not agree
with the cadastral valuation of the land then the taxpayer may consider initiating an independent
evaluation of the land. In that case the cadastral value will be equal to the value of the independent
evaluation (an official independent valuation report of the land has to be issued). The court clarified that
in the case when cadastral value would be significantly higher than the valuation arrived at by
independent appraisal then the cadastral value may indeed be changed. However, the change has to be
entered into the cadastral register. Other court practice supports this trend. (For example, Federal
Commercial Court in the Volga-Vyatka Region No. А29-9636/2010 of 11.10.2011; Federal Commercial
Court in the East-Siberian Region No. А74-300/2011 of 08.09.2011; Federal Commercial Court in the
Volga Region No. А55-24797/2010 оf 04.10.2011; Federal Commercial Court in the Ural Federal District
No. Ф09-7091/11 of 03.11.2011).
In addition to the cadastral value and market value, there is also the concept of ‘normative value of land.’
This value is determined annual by the relevant regional government and includes considerations as to the
quality and location of the land as well as economic payback. The method for determining the normative
value has been set by Government decree (No. 319 “On the procedure for determining land normative
price” of 15.03.1997).
As noted in ruling N 54 of the Plenum of the Supreme Arbitration Court of Russia, if the cadastral value
of a land is not established, then the normative price of a land is applied for tax purposes.
Organizations and individual entrepreneurs have the obligation to calculate the tax base, submit tax
returns and pay the taxes on their own initiative, whereas in regards to individuals the tax office must
issue a tax assessment note and demand payment.
The tax is paid annually, with quarterly advance payments (articles 393 and 396 of Tax Code).
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3. Tax Rates
Maximum rates are established by the Tax Code (article 394). Local authorities may set any rates for
different kinds of land within these limits.
A special tax rate of 0.3 % is established for the following types of land (art. 394):
a) Land reserved for agriculture and farming
b) Land granted for the purposes of private subsidiary farming, horticulture, gardening, or live-stock
breeding
c) Land for housing and engineering infrastructure for municipal services.
Other land is taxed at the general rate 1.5%.
Land Tax in Moscow and St Petersburg
The Moscow law “On Land Tax” of 24.11.2004 sets out some specific rules. For instance, individuals
(except individual entrepreneurs) are not required to make advance payments. It provides a lower rate for
lands used for housing (0.1%). Some other exemptions are also provided for, including for land used by
governmental and scientific institutions.
The St Petersburg law “On Land Tax” of 23.11.2012 does not require individuals to make any advance
payments. The tax rate for agricultural land is 0.3% of cadastral value, while the tax rate for land for
housing and residential properties is set at 0,01%; and 0.042% for land for subsistence farming.
If you want to discuss this article, please contact the authors:
Jon Hellevig, Managing partner of Awara Group
Facebook: http://www.facebook.com/jonhellevig
LinkedIn: http://www.linkedin.com/in/jonhellevig
E-mail: jon.hellevig@awaragroup.com
Anton Kabakov, Partner of Awara Group
LinkedIn: http://ru.linkedin.com/pub/anton-kabakov/31/b21/200
E-mail: anton.kabakov@awaragroup.com
Artem Usov, Partner of Awara Group
LinkedIn: http://www.linkedin.com/in/artem-usov
E-mail: artem.usov@awaragroup.com
MOSCOW, ST.PETERSBURG, TVER, YEKATERINBURG, KYIV, HELSINKI
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