Monitoring of the Federal Legislation dated 30.11.2004

Federal Law No. 141-FZ of November 29, 2004 on the Amendments to Part 2 of the Tax Code of the Russian Federation and Some Other Legislative Acts of the Russian Federation, As Well As on Invalidation of Individual Legislative Acts (Provisions of Legislative Acts) of the Russian Federation

Part 2 of the Tax Code is extended to include new Section X "Local Taxes" and its Chapter 31 "Land Tax". The Law defines the circle of payers of the tax, object of taxation, taxable base and procedure of its determination and reduction.

The tax period is assumed to be a calendar year, for organisations and independent entrepreneurs, the reporting periods are assumed to be the first quarter, six months and nine months of the calendar year. According to Article 393 of the Code, local bodies may abstain from imposing the reporting period. Tax declarations for the tax are submitted no later than February 1 of the year following the expired tax period. Calculation of the amount of advance payments of the tax are submitted during the tax period no later than the last of the month following the expired reporting period.

Representative bodies of municipal formations (legislative (representative) bodies of state power of the cities of federal significance of Moscow and St.Petersburg), while specifying the land tax, must define the tax rates, procedure and time limits for tax payment. The tax rates may not be greater than 0.3% for the land plots qualified as the lands of agricultural destination, occupied by the housing fund and the objects of the engineering infrastructure of the housing complex, granted for personal auxiliary use, gardening or animal breeding, and 1.5% for other land plots. Differentiated rates may be introduced depending on the category of lands and/or permitted use of the land plot. In 2005, the rates of 2004 shall apply with the factor of 1.1, except for the land tax for the lands of agricultural destination.

Besides, tax exemptions, the grounds and procedure of their application may be introduced, including the exempted amount for individual categories of payers.

The Federal Law is entered into force from January 1, 2005, however, no sooner than one month after the day of its official publication, with exceptions. From January 1, 2006, the Law of the Russian Federation No. 1738-I of October 11, 1991 on the payment for the land is invalidated (except for Article 25 on the normative price for the land) and a number of other laws.

The text of the Federal Law has been published in Rossiyskaya Gazeta on November 30, 2004, No. 265.

Decision of the Government of the Russian Federation No. 686 of November 26, 2004 on the Non-Application of the Rate of the Export Customs Duty for Vanadium Oxides and Hydroxides

For vanadium oxides and hydroxides (code according to the Foreign-Trade Commodity Nomenclature of the Russian Federation 2825 30 000 0), the rate of the export customs duty endorsed by the Decision of the Government of the Russian Federation No. 1364 of December 9, 1999 does not change.

The Decision is entered into force one month after the day of its official publication.

Letter of the Federal Agency for Construction and the Housing and Communal Sector No. AP-5536/06 of November 18, 2004 on the Procedure of Application of the Normatives of Estimated Profit in Construction

When using in the local estimates the normatives of estimated profit for the types of construction, installation and repair works, the normatives are calculated for the sets of works defined according to the names of the guides: GESN-2001, GESNm-2001, GESNp-2001, GESNr-2001.

The Letter provides recommended normatives of estimated profit by the types of construction, repair and installation works. For organisations using the simplified system of taxation, the mentioned normatives of estimated profit are applied with the factor of 0.9.