According to recent amendments to the law “On accounting” the State information Resource of Financial Accounts has been launched in Russia. The Federal Tax Service (FTS*) has been entrusted to maintain this database.
The State information Resource of Financial Accounts will be a separate database. The database will contain financial statements while the EGRUL Register does not. Hence this new information source improves transparency on company accounts. The extent to which this new source will disclose is not known at this point in time. More information is expected to be published.
Starting with financial accounts for 2019 all corporations are required to file their accounts with this resource in digital format. SMEs will be given more time to comply with this new requirement, but no time limits have been published as of today. SME filings will commence for annual accounts of 2020.
Criteria for being qualified as micro, small or medium-sized business are the following:
- 875.000 USD for micro enterprises,
- 500.000 USD for small enterprises,
- 250.000 USD for medium enterprises;
- Average number of employees should not exceed
- 15 people for micro enterprises,
- 100 people for small enterprises,
- 250 people for medium enterprises.
The following entities are not required to file accounts with this resource: public sector, Bank of Russia, religious organizations, credit and non-credit institutions as they file accounts with the Bank of Russia, companies which financials are subject of state secret, other entities which are exempt from filing due to specific government’s decrees.
Access to this database will be granted to third parties based on annual subscriptions.
Along with new requirements an obligation to file financial accounts with the state statistics authorities has been cancelled. The Federal State Statistics Service has been a public source for annual financial accounts in Russia, but the reality is that a lot of companies don’t file their financials preferring to pay penalties instead of being transparent.
According to Credinform only about 60% active companies filed their annual financial statements 2015-2017 with the state statistics authorities. It is estimated that a new source will contribute to more transparency and the number of filed accounts will tend to be 4 million, which is comparable to the number of active Russian companies entered in the Unified register of legal entities maintained by the FTS.
Comment: At present Russian legal entities are obliged to file their annual financial statements with The Federal Tax Service but they are not disclosed and used for tax purposes only. The FTS is not only a tax supervision body in Russia but also a registration authority maintaining 2 registers: of legal entities and of sole entrepreneurs.
Credinform – Russian provider of company credit reports – online & freshly investigated. Financial statements of Russian companies are also provided: more recent as well as for previous years to compare company performance.