The tax amnesty in Russia started in March 1 of 2007 and ends in January 1 of 2008. Taxpayers pay a tax rate of 13% from all income that was not legalized but received before January 1 of 2006.

I know from my experience, and it is not a secret, of the double-dealing accounting in Russian companies; one is the official and another one is under table, it calls in Russia (black accounting). If you doing business in Russia you better count on double-dealing accounting.

Almost every company has a double-dealing accounting just because the income tax rate and payroll taxes were very big in old Russian tax code. If company paid all of the taxes it could go bankruptcy quite fast. Knowing of this situation by Russian government, it came up with the decision of this amnesty.

But here are some exceptions; people who commit any other crimes besides concealments of incomes, like concealments of income received by breaking the criminal law, financial law, customs law or any other law do not have this amnesty.

According to the current law, non-payment of taxes from the received incomes (concealments of incomes) considering to offence of braking administrative and the criminal liability. Other words people who did not pay taxes from annual income more than 100 thousands rubles (approximately $3,900) considered to be the violators.

Unfortunately, Russian people are not in a big rush to be remorse of there sins in taxes. Tax amnesty started in March 2007 and it is continuing without a big success as it was expected; even if taxpayer has the rights not to disclose the source of their income.

Russians, as the deliberate people, remembering the sad history, are not so trusting to Tax Agencies and afraid to report the information that may be used against them.

The Federal Treasure published the statistic that in March – July of 2007 civilians transferred to budget’s system of Russia 377.4 million rubles (approximately $13.2 million). As Treasury published, it was only $113 millions of income, which was legalized.

It was not a big surprise that the most of the collected money came from Moscow- $5.9 million, Saint Petersburg second place – $700 thousands and an another “record” was made in Kalmic; they collected $3!

This information may be a good hint for the best place of doing business in Russia and for places of developing businesses.

The pick of the amnesty fall in the Summer time of this year, may be as a result of overheated weather in Moscow, so only in July was collected almost 1/3 of all collected money.

The expectations of the amnesty are far from reality; it was expected legalization of $5-7 billions but as it is going now in reality may be only $1 billion.

Other word, Tax Amnesty in Russia is way below of the expectations of the Government and considered to be not very successful.

People did not believe in the good intents of the authority, but still for anyone who believes in the good government they have the time for repentance of their concealments of incomes; the amnesty is continuing till the end of this year, December 31 of 2007.