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EEC prepared review of the EAEU States’ tax systems

EEC prepared review of the EAEU States’ tax systems

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10/22/2019

The Financial Policy Department of the Eurasian Economic Commission (EEC) has presented a report "Review of tax systems of the EAEU Member States". The review examines changes in the national legislation of the Eurasian Economic Union (EAEU) States: the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, the Kyrgyz Republic and the Russian Federation. Besides, the report analyzes the state of their tax systems, and provides basic tax rates as well as other information and reference materials.

Timur Zhaksylykov, Member of the Board – Minister in charge of Economy and Financial Policy of the EEC, has noted in his address to the readers that tax legislation is a sphere of law, the norms of which are being permanently improved, while the Commission monitors changes in the Member States’ legislation in this sphere and considers relevant matters.

"The Treaty on the EAEU has outlined the main principles of indirect taxation: national treatment in the sphere of indirect taxes, harmonization of excise rates on some of the most sensitive goods, improving administration of indirect taxes, charging VAT on goods traded according to the principle of destination country and place of rendering services and performing works, – Timur Zhaksylykov mentions. – When it comes to tax harmonization in the EAEU, it is worth noting significant progress in unifying approaches to indirect taxation. Different VAT rates in countries are explained primarily by differences in economic systems (the ratio of market (commodity) and structural (industrial) components) as well as ongoing economic reforms. At the same time, it is very important to note the existing tax sovereignty of the Member States". 

According to Timur Zhaksylykov, the overarching objective of the Eurasian Economic Commission in the sphere of information exchange is to establish an efficient exchange and to create opportunities for the promptest transition of all flows to the online mode. 

"In addition to improving the electronic information exchange between tax authorities, it is required to further develop the service functions of tax authorities, to actively implement, for example, online verification of the status of applications for importing goods and paying indirect taxes. All these actions are aimed at improving the business environment", - the EEC Minister emphasizes.

In preparing the publication, statistical and analytical data were used, the entire volume of the EAEU countries’ regulatory legal framework in the tax sphere was analyzed, and specific situations arising in the course of mutual trade within the EAEU were considered.

 

The review includes a number of practical issues that can be of interest to specialists in various spheres of business and to employees undergoing retraining or advanced training.

Besides, the review will be useful for students and researchers who are starting to study the peculiarities of taxation in conducting foreign economic activities by organizations.

The publication includes excerpts from the Treaty on the EAEU (Section XVII "Taxes and Taxation"), Annex No. 18 thereto - "Protocol on the Procedure for Collection of Indirect Taxes and the Mechanism for Controlling Their Payments on Export and Import of Goods, Performance of Works and Provision of Services".