CREATIVE WORK:

IMPROVEMENT OF RUSSIAN
WINDFALL TAX–2024

■ New law on Russian windfall tax-2024 (“WT”) will be adopted soon. WT is payable by large
companies as a lumpsum payment in January 2024 at the following rules:

If (CPT base-2021 + CPT base-2022)/2 < 1bln roubles, then WT=0; if > 1bln roubles, then
WT=[(CIT base2021+CIT base2022)/2 – (CIT base2018+CIT base2019)/2]*10% – 2*VP2023
where VP-2023 is the voluntary non-refundable payment to the budget in 2023.
■ Companies are concerned about new international sanctions risks associated with the
voluntary payment VP2023 to the budget. But if VP2023 is not paid by 30.11.2023, then,
according to the formula above, the company would pay 2 times bigger WT in 2024.
■ Required: 1. Highlight main differences between the Russian WT and windfall taxes
previously imposed in the UK and the EU during the last 30 yrs (short bullet-points please!)
2. Criticise drawbacks and pitfalls of the WT formula above (short bullet-points please!)
3. Suggest and argue an alternative WT formula and/or payment mechanism to mitigate
sanctions risks for payers. Your answer should comply with the basic principles of Russian tax
system and ensure that the state receives in 2023 not less revenues (in comparison to VP2023).