Monitoring of the Federal Legislation dated 1.12.2005

Order of the Federal Customs Service No. 1005 of October 28, 2005 on the Authority of the Customs Bodies in Customs Operations Pertaining to Excisable Goods and Certain Other Types of Commodities

Lists excisable and certain other types of commodities where customs operations may be carried out by specialised customs bodies. The authority of the mentioned bodies is restricted exclusively to such commodities.

Also lists customs bodies providing excise duty stamps to importers and the customs bodies carrying out customs operations pertaining to excisable goods subject to licensing, the ones that should be labelled with excise duty stamps, wine materials, cognac alcohols, as well as beer imported to the Russian Federation (including alcohol-free one).

Besides, endorsees the list of the customs bodies permitted to carry out customs operations pertaining to imported commodities requiring transport vehicle certificates. The mentioned bodies may carry out customs operations for automobiles of certain brands when the places of declaring are specified in other normative legal acts and classified in Headings 8702-8704 of the Foreign Trade Commodity Nomenclature of Russia aged less than 3 years.

The Order is entered into force 90 days after the day of its official publication.

Registered in the Ministry of Justice of the Russian Federation on November 25, 2005. Reg. No. 7203.

Letter of the Federal Tax Service No. MM-6-02/961@ of November 18, 2005 on the Registration for Taxation Purposes of Expenses of Organisations for Participation in Tenders If They Are Lost <br>

Expenses of the organisation pertaining to participation in tenders that were not won may be accepted for profit taxation purposes as non-sales expenses if they occurred because of the requirements of organisers of tenders to participants of tenders and are not returned in cases of failure. The given expenses, if confirmed with documents, shall be registered for profit taxation purposes as a lump sum.

If the amounts transferred by participants of tenders for participation in tenders are returned by organisers of tenders, theses amounts are included in non-sales incomes with the participant.

Letter of the Department of the Tax and Customs Tariff Policy of the Ministry of Finance of the Russian Federation No. 03-03-04/4/71 of October 28, 2005 on the Expenses of Office Leasing in a Dwelling House <br>

Since the civil and housing legislation does not permit to lease dwelling space other than for living, expenses of a legal entity to lease the dwelling space used as an office may not reduce the taxable base for the profit tax from organisations.

Letter of the Department of the Tax and Customs Tariff Policy of the Ministry of Finance of the Russian Federation No. 03-05-01-04/345 of October 28, 2005 <br>

Pursuant to the Tax and Labour Codes of the Russian Federation, tax on incomes of natural persons applies to the earnings paid out to employee during his stay on a business trip abroad. The tax is collected on common grounds while applying the rates of: 13% for natural persons out of tax residents of the Russian Federation and 30% for non-residents of the Russian Federation.

One should keep in mind that according to Item 2 of Article 11 of the Tax Code of the Russian Federation, residents of the Russian Federation are natural persons having stayed actually on the territory of the Russian Federation for at least 183 days in a calendar year.

If the employee is sent abroad for permanent work, the remuneration for the execution of labour duties on the territory of a foreign state is not qualified as incomes from sources in the Russian Federation. Another procedure applies in this case. If the employee engaged in labour activities in a foreign state is recognised to be a resident in the appropriate calendar year, the remuneration paid out to him is subject to the incomes tax from natural persons at the rate of 13%. If such employee is not recognised a resident, such incomes from sources in a foreign state are not covered by the tax on the territory of the Russian Federation.