What is UFA Trading?
UFA is the capital city of the Russian Federation. It is located on the bank of the Belaya (White) River, and is among Russia’s biggest cities in terms of total area covered. Prior to the Independence period, it was located here. When the Union, Soviet Union and now the Russian Federation united, it moved to its present location.
In accordance with the law on investment share equity, all the enterprises of UFA are subjected to some taxes. One of them is the Value-added Tax (VAT). If you happen to reside in UFA, you have to pay a particular rate of this tax every year, and it varies from one region to another. But the question which crops up in everyone’s mind is that why would one pay the VAT to the government? Well, there is no problem or issue with paying the tax, but this is not the reason for any of UFA’s businesses to get profit.
All the Profit of UFA businesses comes from the members or its partners. This profit is referred to as the Membership dividend. The term Membership dividend is used here because the earning of UFA’s profit is dependent on the number of its clients who visit the UFA website and buy one or more membership cards. The more patrons the website has, the higher the income of UFA becomes.
As per the rules and regulations of UFA, its income is not taxable until it is passed through the payment method of UFA member equity. As we know, UFA is traded on the Moscow Stock Exchange (MSX), and therefore, dividends paid on Membership Dividend are taxable. So we can understand that the income from membership is non-taxable. However, the earning is only possible if the client visits the UFA website and buys a membership card.
Profit of UFA businesses also depends on the percentage of its clients who buy a membership card. In simple words, it depends on the pre-determined patronage dividend. As we know that the membership is traded on the MSX and hence the earning also depends on the membership equity. So we can say that the profit from UFA is not taxable. Again, we come to know that the income from co-operative business also depends on the patronage of clients.
So, now we have understood that what is UFA and how it works. To conclude, we can say that UFA is a profitable business. However, there are many differences between UFA and its rivals. UFA is trading under the MCX and it enjoys all the benefits of being registered under the MCX and also enjoys the rights to use the brand name. We hope that we have clarified the whole idea of UFA and its profit making model.