Some clients of mine (UK citizens) are considering setting up a business that exports products from the UK to Russia direct to the Russian public. They want to have a Russian representative who manages the payments in RUB and ensures delivery of the products (standard retail items over here). Once a sufficiently large amount of RUB has been collected to justify an international bank transfer, the representative will send the money to a UK bank account as GBP.
They are concerned about how they should arrange payment of taxes at either side. It appears that since the money is being collected in Russia then that is the profit centre, but the UK business bank account would see continuous income coming from Russia which would mostly be used to pay for the products and expenses with some profit left over.
How would the accounting work in this case?
(I am not an accountant, they are my clients by virtue of me helping them out with internet consultancy)