Windfall tax for major companies to be introduced in Russia

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Daily Monitoring of the Legislation

Monitoring of the Federal Legislation dated 15.07.2003

Decision of the Constitutional Court of the Russian Federation of July 14, 2003 on the Case of Constitutionality of the Provisions of Article 4, Item 12 of Article 164, Items 1 and 4 of Article 165 of the Tax Code of the Russian Federation, Article 11 of the Customs Code of the Russian Federation and Article 10 of the Law of the Russian Federation on the Value Added Tax Pursuant to the Requests of the Arbitration Court of the Lipetsk Province, Appeals of the OOO "Papirus", OAO "Far-Eastern Steamship Company" and the OOO "Commercial Company "Balis""

According to Item 1 of Article 164 of the Tax Code of the Russian Federation, taxation at the 0% rate apply for the sale of commodities (except for the oil, including stable gas condensate, natural gas, exported on the territory of the CIS member-states) exported under the export customs regime under the condition of submission to the tax bodies of the documents envisaged in Article 165 of the Tax Code.
According to the applicants, the exhaustive list of the documents specified in Article 165 of the Tax Code permitting to apply the 0% rate taxation does not permit to prove the fact of export with other documents. Because of the objective reasons, actions of contracting parties, customs bodies, as well as other persons, it is not always possible to draw up the documents mentioned in Article 165 appropriately.
The Constitutional Court of the Russian Federation has decided to recognise as not contradicting the Constitution of the Russian Federation the provisions of Item 1 of Article 164 and Items 1 and 4 of Article 165 of the Tax Code of the Russian Federation, since they fix the duty of the taxpayer to submit to the tax bodies the documents according to the specified list to confirm the reasonableness of the 0% VAT rate for the sale of commodities exported from the Russian Federation under the export customs regime by ships through sea ports, as well as the works (services) in escorting, transportation, loading and unloading of such commodities imported to the Russian Federation.
The provision of Paragraph 4 of Subitem 4 of Item 1 of Article 165 of the Tax Code of the Russian Federation is recognised as not contradicting the Constitution of the Russian Federation, since it does not exclude an opportunity to confirm the export of commodities under the export customs regime by ships through sea ports by the taxpayer submitting to the tax bodies together with other obligatory documents instead of the bill of lading other transportation, commodity accompanying documents containing the same information to implement the right for the beneficial VAT rate envisaged in the Tax Code. The revealed meaning of the given norm is obligatory to all and excludes any other interpretation.
Proceedings pertaining to the constitutionality of other challenged norms have been terminated since they have been either abandoned by the beginning of the case examination or did not apply in the case.
Judicial decisions in the case of the applicants diverting from the revealed constitutional and legal meaning must be revised.
The Decision is entered into force immediately after annunciation.

Decision of the Government of the Russian Federation No. 421 of July 12, 2003 on the Amendments to the Rules of Sale of Individual Types of Commodities and the Regulation on the Licensing of Activities in Reproduction (Making Copies) of Audiovisual Pieces of Art and Phonograms on Any Media

Prohibits the sale of the copies of audiovisual pieces of art and phonograms when arranging retail trade outside the stationary trade outlets: at home, at the place of work and study, on transport, in the streets, in hawker booths and in other places.
Each copy of the audiovisual piece of art and phonogram must contain the name and place of location of the maker, license No., technical parameters of the audio or video medium, as well as information of the holder of the copyright and adjacent rights for the audiovisual pieces of art and phonograms. As to the copies of films, the seller must also provide information on the No. and date of the distribution certificate, film name, country and studio having issued the film, year of issue, as well as information on the main parameters, length (in minutes) and recommendations on viewer age restrictions.
When handing over the commodity to the buyer, the seller must check the integrity of the package, and, if the buyer wishes so, provide for the opportunity to view the fragments of the audiovisual piece of art or phonogram.
The mentioned requirements and terms are the license ones, and the failure to observe them may bring about license revocation.

Direction of the Central Bank of Russia No. 1288-U of June 3, 2003 on the Amendments to the Instruction of the Bank of Russia No. 102-I of July 22, 2002 on the Rules of Issue and Registration of Securities by Credit Organisations on the Territory of the Russian Federation

The amendments provide for the uniform opportunities to take investment decisions for securities of credit organisations available in public circulation and securities of other types of issuers proceeding from the uniform amount of disclosed information.
The Direction changes the procedure of issue arranged by credit organisations, endorsement of the documents sent to the body in charge of the registration to register the issues of securities, composition of information included in the prospectus, including the cases of its registration. Envisages opportunities to issue options.
The prospectus is extended to include information on the financial and economic standing of the issuer for the five most recent finished fiscal years. The prospectus must also contain consolidated financial reports for the most recent three finished fiscal years including the figures for its branches and dependent companies.
Registered in the Ministry of Justice of the Russian Federation on June 30, 2003. Reg. No. 4865.

Order of the Russian Patent Agency No. 82 of June 6, 2003 on the Rules of Drawing up, Submission and Examination of the Request for the Patent for an Invention

The rules specify the procedure of drawing up, submission of the request and its examination by the federal body in charge of the intellectual property. In particular, define the terms and time limits for information search to determine the level of equipment to compare the novelty and level of the declared invention. Define the particulars of submission and examination of the international request.
Registered in the Ministry of Justice of the Russian Federation on June 30, 2003. Reg. No. 4852.

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