Responsible tax policy

Russian Railways pays all applicable taxes, insurance contributions, levies and charges required by the Russian laws, including VAT, corporate income, property, land, and transportation taxes, insurance fees, MET and others.

The Company adopted the Declaration on Tax Strategy Objectives and Principles (tax strategy)Approved by Russian Railways’ Order No. 1309/r dated 15 June 2021, which is in line with the Russian Railways Group’s values, mission, strategic priorities, and growth targets.

In its tax strategy, the Company relies on the following principles:

Taxpayer’s good faith.

The Company complies with all tax laws and pays all applicable taxes and levies on time and in full, as well as files tax returns and other documents in a timely manner.

Tax disclosure.

We disclose tax information in accordance with the laws of our countries of operation and international treaties.

Higher tax transparency.

The Company takes measures to enhance tax transparency, including through tax monitoring to ensure accurate calculation and timely payment of taxes, levies and insurance fees.

Tax risk management.

The Company uses a comprehensive system to identify and manage tax risks.

Consistency of tax accounting methodology.

Russian Railways develops and sticks to uniform approaches to taxation to ensure the consistency of tax accounting and fair presentation of taxes in its reporting. The Company mitigates tax risks among other things by requesting clarifications from relevant government agencies and reasoned opinions of tax authorities as part of tax monitoring.

Tax burden planning.

The Company has a tax planning system in place to have tax authorities informed of planned tax accruals and to ensure the complete and timely payment of taxes and levies. The Company collaborates with the Russian government agencies to determine a fair tax burden on the rail transportation industry.

Due diligence and mitigating risks of unjustified tax benefits.

Russian Railways exerts every effort to stay within the limits as regards the right to determine tax base and calculate taxes when entering into transactions with its counterparties. The Company’s internal controls and procedures serve to mitigate tax risks.

Tax function automation and digitalisation.

Russian Railways seeks to improve its tax management processes by means of continuous automation and digitalisation.

Taxes and insurance fees paid in 2023

The total amount of taxes and insurance fees accrued in accounting statements for 2023 stood at RUB 391.4 bn, including:

• RUB 1.2 bn owed to the federal budget;
• RUB 179.4 bn owed to the regional and local budgets;
• RUB 210.8 bn owed to extra‑budgetary funds.

In 2023, a total of RUB 465.7 bn was allocated towards the payment of current taxes and insurance fees (including offsets and refunds), including:

• RUB 38.5 bn to the federal budget;
• RUB 194.1 bn to the regional and municipal budgets;
• RUB 233.1 bn to the Pension and Social Insurance Fund.

For more details on Russian Railways’ tax strategy, see the Company’s website

Sustainable financing

In December 2023, the Company approved and published an updated version of its Social Financing Framework in the Russian language, which received an independent opinion from the Expert RA rating agency confirming its compliance with the sustainability principles. During the Future of the Sustainable Finance Market conference sponsored by Expert RA, Russian Railways was awarded a diploma as the first Russian company to provide a notable example of verifying the Social Financing Framework.

According to the Framework, proceeds from social financing instruments will be used to finance social projects in the following areas:

• developing railway infrastructure and ensuring transport accessibility;
• ensuring affordable healthcare;
• ensuring affordable education;
• other social projects.

Social financing concept