Ad Valorem Tax

Ad valorem tax — «налог соответственно стоимости» or «адвалорный налог» — is calculated according to the value of an object, based on an assigned valuation of real estate or personal property. These are VAT, property taxes, most import and export duties. Ad valorem tax differs from a specific or per unit tax, a tax based on the quantity of the property or goods.

The specific tax, however, has administrative advantages. Quite simply it is easier to collect and control. Therefore, most Russian taxes, especially import and export duties, are neither ad valorem nor specific: they are calculated according to the assigned value of the goods with the imposition of the minimal payment on each unit. Similarly, export duties on oil and gas are based on the quantity but the amount of such duty is determined by the Russian Government according to the market prices.