Monitoring of the Federal Legislation dated 9.10.2006

Decision of the Government of the Russian Federation No. 599 of October 3, 2006 on the Endorsement of the Regulation on the Assigning (Dismissal) of the Head of the Interim Financial Administration Introduced in the Subjects of the Russian Federation, on the Endorsement of the Structure and Payroll, As Well As on the Financial Support of Activities of the Interim Financial Administration and Organisation of Checking (Audit) of the Budgets of Subjects of the Russian Federation

The assigning of the head of the interim financial administration is vested in the Government of the Russian Federation at the presentation of the Minister of Finance after taking the decision to introduce a financial administration in the subject of the Russian Federation. The Decision lists the requirements to the head of the financial administration pertaining to education and experience of professional activities.

Dismissal from the position of the head of the financial administration occurs after expiry of the period of its activities.

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

Letter of the Federal Agency for Construction and the Housing and Communal Complex No. SK-4250/02 of October 9, 2006 on the Prices for Design and Survey Works in Construction for the IV Quarter of 2006

In the IV quarter of 2006, the indices of change of the cost of design works in construction are fixed in the amount of 2.16 to the level of basic prices as of January 1, 2001 and 16.67 to the level of basic prices as of January 1, 1995.

The indices of change for survey works are fixed in the amount of 2.24 to the prices as of January 1, 2001 and 25.51 to the prices as of January 1, 1991.

Letter of the Department of the Tax and Customs Tariff Policy of the Ministry of Finance of the Russian Federation No. 03-04-15/170 of September 26, 2006

The works (services) of processing of commodities placed under the customs regime of processing on the customs territory are subject to the value added tax at the rate of 0 percent on condition of submission of the following documents to the tax bodies:

- contract (copy of the contract) of the taxpayer with a foreign or Russian entity to carry out works (render services); - bank excerpt confirming receipts from the foreign or Russian entity buying the works (services) on the taxpayer account in the Russian bank; - copies of transportation, commodity-accompanying and/or other documents confirming the export of commodities outside the customs territory of the Russian Federation (import of commodities to the customs territory of the Russian Federation). Other documents may also include customs documents, including the copies of cargo customs declarations used to register commodities imported to the customs territory of the Russian Federation for processing and products of processing exported from the customs territory of the Russian Federation.

Letter of the Department of the Tax and Customs Tariff Policy of the Ministry of Finance of the Russian Federation No. 03-05-01-03/125 of September 22, 2006

Provides explanations on the procedure of taxation of incomes obtained from the leasing of dwelling space.

The civil legislation associates the need to register a natural person as an independent entrepreneur with activities of a special type carried out by him rather than simply committing onerous transactions. The fact of committing onerous transactions by the citizens is not enough to recognise him an entrepreneur if the committed transactions do not form activities. The presence of entrepreneurial activities in the citizen’s actions is proved, in particular, by the following facts:

- making or buying property to make profit from its use or sale; - keeping records of economic operations pertaining to committed transactions; - interconnection of all transactions committed by the citizens within a certain period of time; - stable connections with sellers, buyers, other contractors.

If there are reasons enough to consider that the above signs are present, the natural person must register as an independent entrepreneur without the forming of the legal entity and pay the tax from appropriate incomes as an independent entrepreneur.

In the absence of the reason to regard the activities of leasing of immovable property as entrepreneurial, it is necessary to pay the tax on the incomes of natural persons from obtained incomes as a natural person not being an independent entrepreneur.