Sobol' O.N.Peter the Great Saint Petersburg Polytechnic University, Saint Petersburg, Russian Federation O-SOBA@yandex.ru
Importance As international cooperation and ties expand, many Russian entities set up their representative offices abroad so to penetrate the global markets. This process is coupled with some complicated matters concerning accounting in the representative offices abroad. Therefore, it is interesting and relevant to examine such challenging issues of accounting for transactions the overseas representative office makes. Objectives The research investigates complicated matters of accounting in representative offices of the Russian entities that operate outside the Russian Federation, and formulate constructive proposals on accounting in overseas representative offices. Methods This research systematizes and analyzes information presented in legislative and regulatory documents and in literature covering issues of operations of the Russian entities' overseas representative offices. Using the method of comparative analysis of accounting options and the case study of the most common transactions made by overseas representative offices, we examine the challenging matters of accounting in overseas representative offices of the Russian entities abroad. Results The article provides clear recommendations on the way to keep accounting records in overseas representative offices carried in the separate balance sheet, and to arrange cross-balance sheet settlements with the parent company. Conclusions and Relevance We conclude that overseas representative offices that are carried in the separate balance sheet should maintain their accounting records only in compliance with Section IV of Accounting Regulation On Accounting for Assets and Liabilities Denominated in Foreign Currency (PBU 3/2006). The article will be relevant to entities, which want to establish their representative offices outside the Russian Federation.
Keywords: accounting, foreign representation, international cooperation, tax payment
References:
Burova T. Predstavitel'stvo – za granitsei, nalogi – v Rossii [Representation is located abroad, tax are paid in Russia]. Raschet = Settlements, 2006, no. 2. Available at: Link. (In Russ.)
Bursulaya T. Nalogooblozhenie i bukhuchet v filialakh i inykh obosoblennykh podrazdeleniyakh [Taxation and accounting in branches and other standalone subdivisions]. Nalogovyi uchet dlya bukhgaltera = Tax Accounting for Accountant, 2013, no. 4. Available at: Link. (In Russ.)
Kolesnikov D.M. Kakie nalogovye voprosy voznikayut u rossiiskikh kompanii pri zachete nalogov, uplachennykh za rubezhom [What tax issues do the Russian entities come across when offsetting taxes paid abroad?]. Rossiiskii nalogovyi kur'er = Russian Tax Courier, 2013, no. 10. Available at: Link. (In Russ.)
Lobanova N.N. Nalogooblozhenie vyplat v pol'zu inostrannykh grazhdan, rabotayushchikh v predstavitel'stvakh rossiiskikh organizatsii za rubezhom [Charging taxes on payments made in favor of foreign nationals working for overseas representative offices of the Russian entities]. Oplata truda: bukhgalterskii uchet i nalogooblozhenie = Payroll: Accounting and Taxation, 2007, no. 3. Available at: Link. (In Russ.)
Lozhnikov I. Vedenie ucheta pri nalichii predstavitel'stva za rubezhom [Accounting and overseas representations]. Finansovaya Gazeta, 2007, no. 24. Available at: Link. (In Russ.)
Order of the Ministry of Finance of the Russian Federation of November 25, 2011 № 160н on IAS 21 – The Effects of Changes in Foreign Exchange Rates. Available at: Link. (In Russ.)
Mokrousov O. Kompaniya sozdaet biznes-edinitsu za rubezhom [The entity sets up a business unit abroad]. Novaya bukhgalteriya = New Accounting, 2011, no. 9. Available at: Link. (In Russ.)
Nalogooblozhenie rossiiskoi organizatsii za predelami RF [Charging taxes on the Russian entity outside the Russian Federation]. Available at: Link. (In Russ.) (accessed 26.07.2013)
Negrebetskaya O.V. Otpravlyaem rabotnika v zarubezhnyi filial [Sending an employee to a foreign branch]. Zarplata = Salary, 2011, no. 10. Available at: Link. (In Russ.)
RF Federal Law On Accounting of December 06, 2011 № 402-FZ. Available at: Link. (In Russ.)
Order of the Ministry of Finance of the Russian Federation On Approval of the Chart of accounts of corporate financial and operational activities and Instructions for its application of October 31, 2000 № 94н. Available at: Link. (In Russ.)
Order of the Ministry of Finance of the Russian Federation On Approval of the Accounting regulation on Accounting for assets and liabilities denominated in foreign currency (PBU 3/2006) of November 27, 2006 № 154н. Available at: Link. (In Russ.)
Pronina E.A. Esli za rubezhom otkryto predstavitel'stvo: kak v etom sluchae uplachivayutsya rossiiskie nalogi [If the entity has a foreign representation, how are the Russian taxes paid in this case?]. Glavnaya kniga = General Ledger, 2009, no. 20. Available at: Link. (In Russ.)
Ryabova R.I. Obosoblennye podrazdeleniya [Separate subdivisions]. Ekonomiko-pravovoi byulleten' = Economic and Legislative Bulletin, 2011, no. 3. Available at: Link. (In Russ.)
Semenikhin V.V. Valyutnye raznitsy [Foreign exchange difference]. Nalogovyi vestnik = Tax Bulletin, 2012. Available at: Link. (In Russ.)
Fedortsova E.A. Otkryli OP: kak organizovat' bukhuchet [Separate subdivision has been set up: how should accounting be organized?]. Glavnaya kniga = General Ledger, 2012, no. 4. Available at: Link. (In Russ.)
Shilina E. Otdel'nyi balans v obosoblennom podrazdelenii [Separate balance sheet in a separate subdivision]. Rossiiskii bukhgalter = Russian Accountant, 2012, no. 1. Available at: Link. (In Russ.)
Yutskovskaya I.D., Maslennikova M.A. Rossiiskoe predpriyatie otkryvaet predstavitel'stva (filialy) v Belorussii i Kazakhstane [The Russian entity opens representative offices (branches) in Belarus and Kazakhstan]. Finansovye i bukhgalterskie konsul'tatsii = Financial and Accounting Advice, 2008, no. 2. Available at: Link. (In Russ.)
Yalbulganov A.A. Kommentarii k chasti vtoroi Nalogovogo kodeksa RF [Commentary to Part Two of the Tax Code of the Russian Federation]. Available at: Link. (In Russ.)
