Monitoring of the Federal Legislation dated 8.06.2005

Federal Law No. 59-FZ of June 6, 2005 on the Amendments to the Law of the Russian Federation on the Private Detective and Bodyguard Activities in the Russian Federation

The Law is extended to include Article 11.1 specifying the legal status of a private bodyguard. The private bodyguard works under a labour contract with a bodyguard organisation. The Law lists the categories of persons who may not claim the legal status of a private bodyguard. They include, in particular, persons not being the citizens of the Russian Federation, those under 18 years of age, with disability or restricted abilities, persons with a history in premeditated crimes and some other.

Citizens engaged in detective and private bodyguard activities must be insured on the obligatory basis at the expense of resources of the appropriate enterprises (association) for the cases of death, injuries or any other damage to health because of investigation or bodyguard engagement.

Federal Law No. 58-FZ of June 6, 2005 on the Amendments to Part 2 of the Tax Code of the Russian Federation and Some Other Legislative Acts of the Russian Federation on Taxes and Fees

Amends Chapter 23 "Income Tax from Natural Persons" and Chapter 25 "Profit Tax from Organisations" of the Tax Code.

Changes the procedure of determination of the income (losses) in purchase and sale operations with securities. The documentary-confirmed expenses of purchase, sale and storage of securities actually suffered by the taxpayer include the tax on inheritance and/or donation paid by the taxpayer when obtaining the securities on the proprietary basis. Besides, the documentary-confirmed taxpayer expenses include expenses of purchase of stocks possessed by the taxpayer before their exchange (conversion). The Law excludes opportunities of application of property exemption in taxation of incomes of natural persons in operations with securities if the taxpayer expenses cannot be confirmed with documents.

The Law refines the composition of non-sale incomes for the purpose of calculation of the profit tax. Non-sale expenses include expenses in the form of a bonus (discount) paid out (granted) to the buyer by the seller in case of fulfilling of certain terms of the contract, in particular, the volume of purchase.

Specifies that determination of the taxable base for the profit tax does not take into account incomes in the form of capital investments in the from of non-removable improvements of the leased property made by the leaseholder. The mentioned investments are qualified as amortizable assets.

Expenses reducing the taxable base include expenses abroad the Russian Federation and confirmed with documents drawn up in compliance with the legislation of foreign states. Material expenses include travel and luggage expenses if the residents of the North are relocated to the permanent place of residence. Expenses exempted from taxation include expenses in cases of additional construction, additional equipment, reconstruction, modernisation of the objects of fixed assets.

At present, other expenses pertaining to production are permitted to include expenses pertaining to the maintenance of the rooms of objects of public catering. To avoid misinterpretation, there is an amendment specifying that such expenses are taken into account in other expenses only if they are not taken into account in expenses pertaining to the use of servicing production facilities in compliance with Article 275.1 of the Tax Code.

Article 269 of the Tax Code permits taxpayers to exempt from the taxable base interest for the debts in the amount of the rate of refinancing of the Bank of Russia multiplied by 1.1 for the liabilities in roubles. Specifies that the mentioned rate should be assumed as of the date of attraction of the monetary resources (for the debts that do not contain the provision of change of the interest rate during the whole period of the debt) and as of the date of acceptance of expenses in the form of interest (for other debts).

A number of changes pertains to the determination of the taxable base for separate divisions of the taxpayer. If the taxpayer has several separate divisions on the territory of one subject of the Russian Federation, distribution of profits for each of these divisions is not necessary. Amount of tax due to the budget of this subject in this case is determined proceeding from the share of profit calculated from the multitude of figures of separate divisions on the territory of the given subject. In this case, the taxpayer shall choose independently the separate division to be used to pay the tax to the budget of this subject, having notified of the adopted decision the tax bodies where the separate division is registered for taxation purposes.

The Law amends Articles 290 and 291 of the Tax Code specifying the particulars of determination of incomes and expenses of the banks. Thus, bank incomes do not include insurance payments received under insurance contracts for the cases of death or disability of the borrower within the limits of the amount of the debt of the borrower for the borrowed (credit) resources and accrued interest redeemed (forgiven) by the bank at the expense of the mentioned insurance payments.

Changes the procedure of determination of expenses in trade operations.

Envisages prolongation of the earlier available (until January 1, 2002) procedure of taxation of series IV and V bonds of the internal state currency loan with primary holders.

The Federal Law is entered into force from January 1, 2006, however, no sooner than one month after the day of its official publication, except for individual provisions where another procedure for entry into force is envisaged.

Decree of the President of the Russian Federation No. 589 of May 26, 2005 on the Improvement of Labour Remuneration for the Persons Occupying State Positions of the Federal State Service in the Territorial Bodies of the Federal Bodies of Executive Power, Offices of Some Federal Courts and Departments of the Judicial Department of the Supreme Court of the Russian Federation in the Subjects of the Russian Federation

The mentioned persons shall get monthly monetary award in the amount of a single salary for the occupied position.

The Decree is entered into force from April 1, 2005.

Decision of the Government of the Russian Federation No. 350 of June 1, 2005 on the Keeping of the State Register of Municipal Formations of the Russian Federation

All municipal formations on the territory of the Russian Federation with charters registered according to established procedure must be entered in the state register. The keeping of the state register is vested in the Ministry of Justice of the Russian Federation and its territorial bodies.

The Decision lists the documents to be submitted to the Ministry of Justice of Russia to enter the municipal formation in the state register.

Order of the Ministry of Natural Resources of the Russian Federation No. 97 of April 14, 2005 on the Endorsement of the Procedure of Organisation and Carrying out of the Forestry Auctions

The endorsed procedure defines the principles and rules of carrying out of the forestry auctions to grant parts of the forestry fund of the Russian Federation for short-term use.

It is not permitted to arrange closed forestry auctions as to the composition of participants.

To participate in the forestry auction, the buyer must transfer an advance payment in the amount of 10% of the starting price of the auction unit. The advance payment is included later in the price of the purchased auction unit or retuned to participants of the forestry auction having failed to buy.

Registered in the Ministry of Justice of the Russian Federation on June 6, 2005. Reg. No. 6690.

Order of the Federal Service for Tariff Rates No. 204-t/5 of May 17, 2005 on the Amendments to the Price List No. 10-01 "Tariff Rates for Cargo Transportation and the Services of Infrastructure Provided by the Russian Railways"

Specifies that the Tariff Guide defines tariff rates for cargo transportation provided by the OAO "Russian Railways" over the infrastructure of the public-use railway transport owned by the Russian Railways and for the services of the use of infrastructure of the Russian Railways.

Specifies the particulars of application of coefficients to determine the payment for the cargo transportation in multi-purpose containers of the common rolling stock and own (leased) ones, as well as for the transportation of own (leased) empty containers.

A new wording is provided for the procedure of determination of payment for the delivery under one shipment document in a multi-purpose car or heavy-duty container of cargo for personal, family, household and other needs other than entrepreneurial activities and cargo owned by consignees and consignors other than the one included in the above categories.

Registered in the Ministry of Justice of the Russian Federation on June 6, 2005. Reg. No. 6685.

Order of the Ministry of Public Health and Social Development of the Russian Federation No. 338 of May 16, 2005 on the Amendments to Appendix 2 to the Order of the Ministry of Public Health and Social Development of Russia No. 83 of August 16, 2004 on the Endorsement of the Lists of Adverse and/or Hazardous Industrial Factors and Works Requiring Preliminary and Periodic Medical Examinations and the Procedure of Such Examinations

The list of the works requiring preliminary and periodic medical examinations includes works of direct control of transport vehicles, works in organisations of the food industry, public catering, trade, educational institutions, medical treatment and prevention institutions, organisations of household services, hotels, as well as the work of the medical personnel of maternity homes and hospitals for children.

Registered in the Ministry of Justice of the Russian Federation on June 3, 2005. Reg. No. 6677.

Direction of the Central Bank of Russia No. 1581-U of June 1, 2005 on the Amendments to the Regulation of the Bank of Russia No. 103-P of December 30, 1999 on the Accounting Procedure for Operations of Issue and Redemption of Savings and Deposit Certificates by Credit Organisations

Amends the procedure of calculation of the interest for the amount of the certificate pursuant to the amendments to Article 839 of the Civil Code of the Russian Federation stating that the interest for the amount of the bank deposit are accrued until the day of its return to the depositor inclusive, and if written off from depositor account for other reasons, until the day of writing off inclusive. Invalidates the Methodology Recommendations on the procedure of calculation of the interest to be shown in the certificate requisites.

The Direction is entered into force 10 days after the day of its official publication in the Herald of the Bank of Russia.

Direction of the Central Bank of Russia No. 1576-U of May 4, 2005 on the Invalidation of Individual Normative Acts of the Bank of Russia

Pursuant to the entry into force of Article 12 of the Federal Law No. 173-FZ of December 10, 2003 on the currency regulation and currency control regulating the procedure of opening and use of accounts of resident legal entities in foreign banks, invalidates the Direction of the Bank of Russia No. 1010-U of August 3, 2001 on the list of foreign states (territories) and their currencies not being free convertible ones where residents may open accounts abroad the Russian Federation according to the notification procedure to make payments under international construction contracts.

The Direction is entered into force from June 19, 2005.