Monitoring of the Federal Legislation dated 28.07.2006

Decision of the Government of the Russian Federation No. 458 of July 25, 2006 on the Qualification of the Types of Products As Agricultural Products and the Products of Initial Processing Made of Agricultural Raw Materials of Own Production

For the purpose of application of the system of taxation for agricultural producers (uniform agricultural tax) in compliance with Chapter 26.1 of the Tax Code of the Russian Federation, endorses the list of the types of products qualified as agricultural products and the list of products qualified as products of initial processing made of agricultural raw materials of own production.

The products of initial processing made of agricultural raw materials of own production shall include agricultural products (products of plant growing of agricultural and forestry enterprises and the products of animal breeding (including the growing and maturing of fish and other aquatic biological resources) having undergone technological operations of processing for preservation of quality and ensuring prolonged storage used in the form of raw materials in subsequent (industrial) processing or sold without subsequent industrial processing to consumers.

The Decision is entered into force from January 1, 2007.

Decision of the Government of the Russian Federation No. 456 of July 25, 2006 on the Amendments to the Customs Tariff of the Russian Federation Pertaining to Individual Types of Cheese

To protect Russian producers of cheese, introduces for 9 months increased rates of import customs duties for cheep imported cheeses (classified under the code of the Foreign Trade Commodity Nomenclature of Russia 0406 90). The rate of the import customs duty for cheeses with the free-on-the-border-of-the-country-of-import price not greater than EUR 1.65 per kg of the net weight will make EUR 0.7 per kg. The rate of the import customs duty for cheeses with the free-on-the-border-of-the-country-of-import price greater than EUR 1.65, however, not greater than EUR 2 per kg of the net weight, will make EUR 0.65 per kg. Import of more expensive cheeses will be subject to the rate of the import customs duty in the amount of EUR 0.3 per kg. Earlier, imported cheeses were not differentiated depending on the price, with the uniform rate of import customs duty being applied in the amount of 15% of the customs cost, however, not less than EUR 0.3 per kg.

Since the rates of the import customs duties for imported cheeses are increased by more than 10 points as a single action, the Decision emphasises especially that the prohibition of a single change of the rates of import customs duties by more than 10 percentage points (for ad valorem types of rates) or equivalent absolute value for specific types of rates (the rates calculated from physical parameters of the commodity - weight, size etc.) or specific components of combined types of rates of import customs duties introduced by the Decision of the Government of the Russian Federation No. 1347 of October 22, 1997 does not apply in this case.

The Decision is entered into force 2 months after the day of its official publication.

Decision of the Plenum of the Higher Arbitration Court of the Russian Federation No. 25 of June 22, 2006 on Some Issues of Qualification and Fixing of Claims Pertaining to Obligatory Payments, As Well As the Sanctions for Public Violations in the Case of Bankruptcy

The plenum of the Higher Arbitration Court of the Russian Federation provided explanations on the issues of qualification and fixing of claims pertaining to obligatory payments and sanctions for public violations in the case of bankruptcy. The Decision emphasises the problems of initiation of the case of bankruptcy pursuant to the application of the authorised body pertaining to claims in obligatory payments, of execution of such claims. It also examines the issues of qualifying, as well as the procedure of fixing and satisfying of claims of collection of fines for tax and administrative violations.

One should keep in mind that by virtue of Item 3 of Article 6 of the Law on insolvency (bankruptcy), only those claims in obligatory payments are taken into account for the purpose of initiation of the bankruptcy case that are confirmed by decisions of the tax (customs) body on debt collection at the expense of the debtor property. Meanwhile, the decision on debt collection at the expense of the debtor property, as well as the fact that the mentioned decision was not challenged as of the moment of submission of the application to recognise the debtor bankrupt, do not serve as an implicit proof of substantiation of the presented claims. Information on the debt where the decision on collection at the expense of the debtor property is not available is of reference nature. When the moment of occurrence of the obligatory payment is examined, one should proceed from the fact that the date of occurrence of the duty to pay the tax is the date of the end of the tax period, rather than the date of submission of the tax declaration or the date of the end of the time limit of payment of the tax.

When resolving disputes arising in legal relations where the debtor is a tax agent, the courts must keep in mind that the claim to the tax agent having failed to fulfil the duty to transfer the collected tax to the budget system does not fall under the notion of obligatory payment defined in the Law on bankruptcy and, therefore, may not be qualified as a claim of obligatory payments. The mentioned claim, regardless of the moment of its occurrence, is not included in the register of creditor claims and is satisfied according to the procedure specified in the tax legislation. Disputes arising from legal relations where the debtor is a tax agent are processed beyond the case of bankruptcy.

As to the procedure of execution of claims in obligatory payments, it is explained, in particular, that since the bank does not examine the debtor arguments in cases of direct debit of monetary resources from the taxpayer account, the debtor may not collect from the bank the amounts written off by the latter under the encashment order of the tax body in a situation when the tax body provided incorrect amount of collected obligatory payments or information qualifying them as current claims.

The plenum emphasised especially the procedure of calculation of the time limits specified for submission of the application challenging non-normative legal acts of the tax bodies; for acceptance and sending to the organisation of the demand to pay the arrears, as well as the legal consequences of the failure to observe these time limits in the case of bankruptcy.