Tax policy
As one of the largest taxpayers in Russia, Magnit contributes to tax revenues at all government levels, supporting the social and economic development of its business geographies and the entire nation.
Key documents
Internal regulations:
- Tax Policy of Magnit
- Accounting Policy of Magnit
Priority UN SDGs
External regulations:
- Criminal Code of the Russian Federation No. 63-FZ dated 13 June 1996
- Administrative Offence Code of the Russian Federation No. 195-FZ dated 30 December 2001
- Russian Tax Code and federal laws adopted in accordance therewith, Russian regional laws, laws and regulations on taxes and duties adopted by representative bodies of municipalities and executive bodies of various levels within the scope of their authority.
Our approach to tax management
Magnit fulfils its tax obligations in a responsible and timely manner, contributes to the economic development of the regions where it operates, and maintains a transparent tax policy. In 2022, we paid RUB ХХХ bln in taxes, duties and insurance contributions to budgets of all levels and extra-budgetary funds in Russia.
The tax function is an integral part of Magnit’s financial unit, ensuring that all of the Company’s tax obligations are effectively discharged across its geographies. Overall tax management falls within the remit of our Chief Financial Officer (CFO), while the Deputy CFO is directly responsible for the tax function, with the Accounting and Tax Department reporting to the Deputy CEO. The department’s responsibilities include the following:
- Tax accounting.
- Preparation and filing of tax returns.
- Cooperation with tax authorities during desk and on-site audits.
- Reconciliation of accrued and paid taxes.
- Identification of tax risks and their mitigation.
- Analysis of options for reducing tax liabilities, including incentives and preferences.
- Preparation of tax legislation initiatives.
- Development of internal policies, regulations and procedures.
The department is staffed with professionals who boast a great depth of expertise and relevant experience in this field. To raise our competencies, we engage external consultants from major accounting firms to assist us in addressing challenging tasks.
Tax governance structure
Principles of Magnit’s tax policy
Integrity
We calculate and pay taxes based on the economic substance of operations and transactions and make use of tax incentives strictly in accordance with statutory requirements.
Uniformity
The Corporate Centre ensures uniform interpretation of tax legislation in accounting operations across different companies of Magnit Group and during the preparation of tax returns.
Transparency
We fully cooperate with the government agencies conducting tax audits and provide all necessary documents and reports as required by law.
Effective dispute resolution
In case of tax disputes, we seek to resolve them through pre-trial procedures envisaged by the law and bring the issue to court only as the last resort.
Reliability of counterparties
We scrutinise our counterparties and avoid doing business with the companies that are believed to be tax evaders or involved in tax avoidance schemes.
Tax risk management
Whenever there are uncertainties as regards interpretation of tax laws, we always ask government authorities for clarification. As a member of various industry associations, Magnit communicates its viewpoint on industry regulation and taxation to government officials.
Stakeholder engagement
Our tax-related activities focus on timely compliance with tax regulations, including as part of tax audits conducted by tax authorities.
Together with the Retail Companies Association (ACORT), we actively participate in developing new tax regulations, assessing tax legislation amendments proposed by government agencies and adopting a stance on relevant initiatives aimed at improving the efficiency of the retail industry.
We expect full compliance with tax legislation from Magnit’s counterparties and monitor their activities to ensure that they are not involved in any tax avoidance schemes.
We continuously enhance our control procedures to increase the effectiveness of the tax function and tax risk management. Risks are managed through, inter alia:
- implementing and maintaining an integrated system of internal tax controls;
- planning and controlling the pricing of intra-group transactions;
- monitoring the compliance of potential counterparties with the tax legislation prior to entering into transactions with them.
Tax payments
Data on our tax payments are regularly disclosed in the Company’s consolidated financial statements. Magnit engages an independent auditor to confirm the reliability of its consolidated financial statements, including as regards the reported tax amounts and other tax data.
| Payment type | Amount paid |
|---|---|
| Contributions to the federal budget:
| 116,4 |
| Contributions to regional and local budgets:
| 19,7 |
| Total tax payments, insurance contributions and duties | 136,1 |