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In addition to the deductions/credits listed above, deductions and business expenses may be claimed as specified below:
- Offset of losses - A loss may be offset forward for up to 10 years.
- Consolidated statements - it is not possible in Russia to offset a loss in one company in a group against the profit of another company in the group.
- Financing costs -interest on suppliers' credit is allowable for tax. Interest on bank loans is allowable at the central market rate of interest in Russia plus 3%.
- There are "thin capitalisation" rules for debts to foreign companies, or their affiliated Russian companies, holding more than 20% of a Russian company.
- Advertising Costs - These are allowable only as a percentage of the volume of income.
- Entertaining Expenses - Allowable only as a percentage of the employees' salaries.
Depreciation of Fixed Assets
- The depreciated balance method or the straight line method are the usual methods of depreciation in Russia.
- Assets for purposes of depreciation are divided into 10 groups.
- Intangible assets are depreciated according to the useful life of the asset. If it is not possible to estimate the useful life of the asset, the depreciation is 10% per annum.
- From 1.1.2006 there is an additional 10% deduction for purchase of certain new fixed assets.
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