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Daily Monitoring of the Legislation

Monitoring of the Federal Legislation dated 25.01.2006

Decision of the Government of the Russian Federation No. 29 of January 23, 2006 on the Amendments to the Regulation on the Application of the Uniform Rates of Customs Duties, Taxes for Commodities Moved Across the Customs Border of the Russian Federation by Natural Persons for Personal Use Endorsed by the Decision of the Government of the Russian Federation No. 718 of November 29, 2003

Reduces from 50 kg to 35 kg the total weight of commodities that natural persons may import in attended and unattended luggage without paying the customs duties and taxes.

Besides, customs duties and taxes will be collected from citizens moving commodities for personal use across the border more than once a month (earlier, more than once a week).

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

Decision of the Government of the Russian Federation No. 28 of January 23, 2006 on the Endorsement of the Method of Distribution of Subventions among the Subjects of the Russian Federation from the Federal Fund of Compensations to Implement the Rights of Possession, Use and Disposal of Forests Earlier Owned by Agricultural Organisations, Their Protection and Reproduction for the Year 2006

The subventions shall be distributed in 2006 among the subjects of the Russian Federation to provide for the financing of expenses to implement the rights of possession, use and disposal of the forests earlier owned by agricultural organisations, their protection and reproduction on the territory of the subjects of the Russian Federation. The formula of calculation of the amount of allocated subvention is provided.

Decision of the Government of the Russian Federation No. 25 of January 21, 2006 on the Endorsement of the Rules of Use of Dwelling Space

Specifies the procedure of use of the dwelling space of the state and municipal housing funds, as well as the one belonging to citizens on the proprietary basis in apartment houses.

The dwelling space may be used by citizens living in it on legal grounds (besides living) for professional activities or independent entrepreneurial activities, however, this may not be in violation of the rights and legal interests of other citizens, as well as of the requirements to the dwelling space.

The tenant as a user of the dwelling space under a social lease contract may provide dwelling space to other persons, including temporary residents, lease part of the dwelling space, exchange the dwelling space, as well as demand from the letter to carry out capital repair in due time and provide communal services.

The tenant must preserve the dwelling space, maintain it in appropriate condition, carry out current repair works, as well as pay for the dwelling space and communal service in due time.

The Decision also specifies the particulars of use of the specialised dwelling space. The tenant may not exchange the dwelling space, as well as lease it. The Decision specifies the particulars of use of the dwelling space of the state and municipal housing funds of commercial use.

The owner of the dwelling space in an apartment house must defray expenses for the maintenance of his dwelling space, as well as participate in expenses of maintenance of the common property in proportion to his share. The owner must transfer payments in due time for the maintenance of the dwelling space and repair works including the payment for the services and works to manage the apartment house, maintenance, current and capital repair works of the common property in an apartment house, payment for communal services.

The new rules shall replace the ones being in effect for more than 20 years - the Rules of use of dwelling space, maintenance of the dwelling house and adjacent territory in the RSFSR endorsed by the Decision of the Council of Ministers of the RSFSR No. 415 of September 25, 1985.

Order of the Ministry of Public Health and Social Development of the Russian Federation No. 643 of October 20, 2005 on the Endorsement of the Forms of Documents on the Loss of Professional Abilities in Percent As Identified by the Federal State Institutions of Medical and Social Expert Evaluation and Their Filling Recommendations

Endorses the forms of documents of the loss of professional ability in percent as found by the federal state institutions of medical and social expert evaluation. These documents include: excerpt from the act of certification in the federal state institution of medical and social expert evaluation of the loss of professional abilities in percent and the certificate of the loss of professional abilities in percent.

The mentioned documents shall be issued by the federal state institutions of medical and social expert evaluation from April 1, 2006.

Registered in the Ministry of Justice of the Russian Federation on January 20, 2006. Reg. No. 7402.

Order of the Federal Service of Execution of Punishments No. 945 of December 28, 2005 on the Measures of Enhance Social Protection of Group Leaders and Mentors of Corrective Institutions of the Criminal Execution System

To improve the service status and the level of social protection, group leaders and mentors of corrective institutions of the criminal execution system shall get additional payments for continuous service in the mentioned positions: in the amount of 10% to the salary for the occupied position for 2 years of service, 20% for 5 years, 30% for 7 years and 50% for 10 years and more.

The monthly supplement for the complexity, stressful nature and special regime shall be paid out to group leaders in maximum amounts.

Registered in the Ministry of Justice of the Russian Federation on January 20, 2006. Reg. No. 7395.

Order of the Ministry of Justice of the Russian Federation No. 255 of December 30, 2005 on the Amendments to the Order of the Ministry of Justice of the Russian Federation No. 226 of September 18, 2003

From February 1, 2006, enters into force amendments to the Instruction on the procedure of filling and issue of certificates of sate registration of the rights, reports of refusal to register the rights for immovable property and transactions with it and information on the registered rights enforced by the Order of the Ministry of Justice of the Russian Federation No. 226 of September 18, 2003.

The amendments pertain, first, to the procedure of filling and issue of excerpts form the Joint State Register of Rights for Immovable Property and Transactions with It. The procedure is extended to include the rules of filling and issue of excerpts containing information on the land plot where an object of immovable property is created housing dwelling and non-dwelling space being an object of the contract of participation in shared construction. Such excerpts, beside mortgage information, must contain on the obligatory basis availability of registered contracts of participation in shared construction listing the objects of shared construction, as well as information on legal entities and natural persons participating in shared construction. Other rules of filling and issue of excerpts from the Joint State Register of Rights are also specified for the mentioned case. The form of such excerpt is also corrected.

Second, the Instruction is extended to include a new Section VIII specifying the procedure of filling and issue of information recognising the rights possessor as legally incapable or with restricted abilities. Introduces the form of the appropriate excerpt.

Registered in the Ministry of Justice of the Russian Federation on January 19, 2006. Reg. No. 7390.

Order of the Ministry of Finance of the Russian Federation No. 149n of December 16, 2005 on the Endorsement of the Requirements to the Composition and Structure of Assets Accepted As a Coverage of Own Resources of Insurer

Own resources of insurer (except for the mutual insurance companies providing insurance services to their members exclusively) shall include the registered capital, reserve capital, additional capital and undistributed profit. The assets used as a coverage of own resources must meet the requirements of diversification, liquidity, repayment and profitability.

The requirements define the types of assets that are not accepted as a coverage of own resources of insurer (promissory notes issued by natural persons; promissory notes issued by stock-holders (participants) of the insurer; share of reinsurers in insurance reserves; insurer loans under life insurance contacts and other). Also specifies the list of the types of assets that may be used to cover own resources of the insurer. The requirements to these assets are obligatory for execution for all insurers.

Earlier created insurers must bring their assets accepted as a coverage of own resources in compliance with the Order before June 30, 2007.

Registered in the Ministry of Justice of the Russian Federation on January 19, 2006. Reg. No. 7389.

Order of the Federal Service for Financial Markets No. 05-83/pz-n of December 15, 2005 on the Amendments to the Order of the Federal Service for Financial Markets No. 05-8/pz-n of March 30, 2005 on the Endorsement of the Regulation on the Composition and Structure of Assets of Joint-Stock Investment Funds and Assets of Shared Investment Funds, As Well As to the Regulation on the Procedure and Time Limits of Determination of the Cost of Net Assets of Joint-Stock Investment Funds, Cost of Net Assets of Shared Investment Funds, Estimated Value of Investment Shares of Shared Investment Funds, As Well As the Cost of Net Assets of Joint-Stock Investment Funds Per Stock Endorsed by the Order of the Federal Service for Financial Markets No. 05-21/pz-n of June 15, 2005

The Regulation on the composition and structure of assets of joint-stock investment funds and assets of shared investment funds is extended to include a new additional requirement to the indices for the purpose of determination of the composition and structure of assets of the mentioned funds: if the list of securities for calculation of the index includes bonds, their market cost must be calculated taking into account the accumulated interest (coupon) incomes.

For an open-type shared investment fund, it is specified that in conversion of securities, the management company of the fund must eliminate incompliance of the composition and/or structure of assets with specified requirements within 6 months after the date when the mentioned incompliance was or must have been revealed.

The amendments include the requirements to the structure of assets of a close-type shared investment fund included in the category of venture investments funds, requirements to the structure of assets of a closed-type shared investment fund included in the category of mortgage ones. The amendments adjust the requirements to the property that may be included in the assets of joint-stock and shared investment funds.

However, the most significant changes pertain to the requirements to the composition and structure of assets of joint-stock investment funds and closed-type shared investment funds included in the category of real estate funds. Thus, the assets of such funds may include now, among other things, proprietary rights under the contracts concluded with a legal entity investing monetary resources or another property in construction of an object of immovable property and enjoying the right to obtain on the proprietary basis the built object of immovable property or a part of it. Also otherwise defined are the requirements to investment contracts where the rights may form part of the assets.

The amendments specify that the assets of joint-stock and closed-type shared real-estate investment funds may include, subject to certain conditions, also the rights under contracts for construction (creation) of objects of immovable property, as well as the rights under the contracts for reconstruction of objects of immovable property forming the assets of the mentioned funds. According to the mentioned amendments, adjustments are made to the requirements to the structure of assets of the mentioned types of investment funds.

The amendments also extend the time limits permitting joint-stock investment funds created before the entry of the Order into force to bring the composition and structure of their assets in compliance with its requirements (from 1 year to 2 years). They also extend the time limits envisaged for joint-stock and closed-type shared investment funds qualified as the category of real estate funds to purchase in assets proprietary rights under the mentioned contracts (from 2 to 3 years).

The amendments to the Regulation on the procedure and time limits of determination of the cost of net assets of joint-stock investment funds, cost of net assets of shared investment funds, estimated cost of investment shares of shared investment funds, as well as the cost of net assets of joint-stock investment funds per stock pertain mainly to the procedure of assessment of the cost of various types of securities, stocks, mortgage deeds and so on in the determination of the cost of net assets of joint-stock and shared investment funds.

However, individual corrections pertain also to the procedure of drawing up of the certificate of the cost of net assets of the mentioned funds. The form of such certificate has also changed.

The Order is entered into force from March 1, 2006.

Registered in the Ministry of Justice of the Russian Federation on January 19, 2006. Reg. No. 7387.

Order of the Ministry of Emergency Situations of the Russian Federation No. 993 of December 21, 2005 on the Endorsement of the Regulation on the Means of Individual Protection Provided to the Population

Specifies the procedure of accumulation, storage, renewal and use of the means of individual protection to provide them to the citizens of the Russian Federation, foreign citizens and stateless persons on the territory of the Russian Federation (population).

Providing the population with the means of individual protection must be vested in the bodies of executive power of the subjects of the Russian Federation. The Ministry of Emergency Situations of Russia shall participate in the measures to provide the means of individual protection to children, non-working pensioners, as well as population living in the vicinity of objects of radiation, chemical and biological hazards at the expense of resources of the federal budget.

Accumulation of the means of individual protection is arranged in advance in peacetime as reserves of material and technical, foodstuffs, medical and other resources and reserves of material resources for elimination of emergency situations of the federal bodies of executive power, bodies of executive power of the subjects of the Russian Federation, bodies of local government and organisations of the state material reserve. The handing out of the means of individual protection to the population in wartime and peacetime is arranged at the decision of the heads of the mentioned bodies and organisations followed by subsequent reporting to the territorial bodies of the Ministry of Emergency Situations of Russia of the changes in volumes of accumulated means of individual protection.

The means of individual protection handed out to the population for storage shall be used by the population independently when they receive civil defence warnings of emergency situations.

Registered in the Ministry of Justice of the Russian Federation on January 19, 2006. Reg. No. 7384.

Order of the Ministry of Emergency Situations of the Russian Federation No. 999 of December 23, 2005 on the Endorsement of the Procedure of Creation of Freelance Rescue Formations

Defines the fundamentals of creation, training, outfitting and use of freelance rescue formations in the framework of civil defence forces. Freelance rescue formations are independent structures created on freelance basis outfitted with special machinery, equipment, auxiliaries, tools and materials, prepared for rescue and other emergency works in the foci of destruction and emergency situations.

Freelance rescue formations shall be created by organisations possessing potentially hazardous industrial objects, as well as those of defence or economic significance or presenting a high degree of hazards of emergency situations in wartime and peacetime out of employees of these organisations. The composition, structure and outfit of freelance rescue formations are defined by the heads of organisations in compliance with the procedure taking into account the methodology recommendations worked out by the Ministry of Emergency Situations of Russia.

According to the procedure, freelance formations are created to solve the following tasks: rescue works and life support to the population having become the victims of military actions; participation in elimination of emergency situations of natural and technical nature, as well as in fire fighting; identification of the regions having been exposed to radioactive, chemical, biological (bacteriological) and other contamination, sanitary treatment, decontamination of territories etc.

The procedure describes a sample list of freelance rescue formations, as well as the norms of their supplies.

Registered in the Ministry of Justice of the Russian Federation on January 19, 2006. Reg. No. 7383.

Order of the Federal Service for Financial Markets No. 05-85/pz-n of December 20, 2005 on the Endorsement of the Forms of Reports of the Management Companies of Investing of the Savings of the Housing Support for Servicemen, on Incomes from Investing of Such Savings, As Well As on Transactions Where There Are Deviations from the Market Prices

Endorses the forms of reports of management companies: on transactions carried out with deviations from market prices; on the investing of the savings of the housing support for servicemen; on incomes from investing of the savings of the housing support for servicemen. Report of transactions carried out with deviations from market prices must be submitted no later than the working day following the day of at least one of the mentioned transactions. Report of investing of the savings and report of incomes shall be submitted on the quarterly basis within the time limits specified in the contracts of trust control of the savings of the housing support for servicemen.

Registered in the Ministry of Justice of the Russian Federation on January 19, 2006. Reg. No. 7381.

Order of the Ministry of Public Health and Social Development of the Russian Federation No. 765 of December 7, 2005 on the Organisation of Work of the District Therapist

Positions of the district therapist shall be occupied by specialists with a higher medical education in specialities "therapy" or "paediatrics" with a certificate of a specialist in therapy. District therapist shall render initial medical and sanitary aid to the population primarily in the medical organisations of the municipal system of public health: out-patient clinics, stationary institutions of the municipal system of public health; other treatment and prevention institutions rendering initial medical and sanitary aid to the population.

The status of the district therapist implies the duties to: form the therapy district out of adjacent population; implement measures to prevent and reduce diseases; organise and carry out diagnostics and treatment; render emergency medical aid; carry out counter-epidemic measures and immunisation; carry out expert evaluation of disabilities and many other.

The Order endorses also registration Form No. 030/u-ter "Certificate of the Therapy District".

Registered in the Ministry of Justice of the Russian Federation on January 18, 2006. Reg. No. 7378.

Information Letter of the Presidium of the Higher Arbitration Court of the Russian Federation No. 98 of December 22, 2005

Summarises the practice of solving by arbitration courts of the cases of application of provisions of the Tax Code on the profit tax from organisations. The summary contains recommendations of the Higher Arbitration Court of the Russian Federation on arguable issues of determination of the taxable base for the profit tax, calculation of amortisation, payment and return of advance payments and some other.

Resources obtained by the organisation from a legal public formation pertaining to sale of services at regulated tariff rates, as well as pertaining to reimbursement of underpaid services rendered to categories of citizens enjoying exemptions, must be registered as incomes in the determination of the taxable base for the profit tax. Such resources make a part of receipts for the rendered services as regards their economic essence.

The Letter emphasises the legality of qualifying the amount of economic benefit obtained from a gratuitous use of non-dwelling space as a non-sales income taken into account in the calculation of the profit tax. Subject to the norm specified in Item 8 of Article 250 of the Tax Code, incomes in the form of the property (works, services) or proprietary rights donated free are recognised to be non-sales incomes. The given provision must be applied also in cases of obtaining the right of gratuitous use of a property item. The principle of determination of incomes in cases of a gratuitous obtaining of property specified in the mentioned norm, which includes its assessment proceeding from market prices, must be applied also in assessment of incomes in cases of obtaining a proprietary right on the gratuitous basis including the right of use of the property item.

The Letter examines the issues of taxation of state and municipal institutions and unitary enterprises. Incomes from profitable activities obtained by the state and municipal institutions may not be qualified as resources of tied financing not included in the determination of the taxable base for the profit tax. When the state or municipal enterprise leases the property handed over to it for economic management, the whole sum of the rent is taken into account as non-sales incomes, not only the amount left at their disposal.

The Higher Arbitration Court recognised that the taxpayer may submit application to return excessively paid advance payments for the profit tax according to the commonly accepted procedure. Any advance payments as of the date of the end of the six months in excess of the advance payment calculated for the given reported period are an excess amount that must be returned to the taxpayer. The Tax Code does not contain any prohibition to return excess amounts of advance payments. The time limit of return of the excess amount or advance payment (one month) is calculated from the day of submission of the application, however, no sooner than the moment of the end of the cameral tax check for the appropriate tax (reporting) period, or from the moment when such check must have been over.

Meanwhile, the right of the tax body is emphasised to send a demand to the taxpayer to transfer monthly advance payments calculated during the reporting period, as well as implement the measures of forced collection of debts in the given payments at the expense of the taxpayer property.

The Letter provides recommendations on issues of responsibility of the tax bodies. According to the position expressed by the court, in cases of paying out of dividends on the stocks of the legal public formation, for example, in case of payments to the body of executive power acting on behalf of the subject of the Russian Federation, the profit tax is not collected. The court also confirmed the position stating that untimely submission by the tax agent of the estimate of incomes paid out to taxpayers does not form corpus delicti envisaged in Article 119 of the Tax Code. As emphasised by the court, legal entity paying out incomes to foreign citizens may not be called to account for untimely submission of the tax estimate for these incomes, since it acts as a tax agent. The subject of this violation is only the taxpayer.

Order of the Central Bank of Russia No. OD-16 of January 17, 2006 on the Application of the Procedure of Granting Credits to Credit Organisations by the Bank of Russia Secured with the Pledging of Promissory Notes, Claims Rights under Credit Contracts of Organisations or Guarantees of Credit Organisations

Directorate of the Bank of Russia in the Tomsk Province may carry out operations of refinancing of credit organisations in compliance with the Regulation of the Bank of Russia No. 273-P of July 14, 2005 on the procedure of granting credits to credit organisations by the Bank of Russia secured with the pledging of promissory notes, claims rights under credit contracts of organisations or guarantees of credit organisations.

Letter of the Ministry of Finance of the Russian Federation No. 03-11-02/85 of December 28, 2005

From January 1, 2006, the limiting amount of incomes of the organisation restricting the right of the organisation to switch over to the simplified system of taxation must be indexed using a deflator coefficient specified on the annual basis for each subsequent calendar year and taking account of the change of consumer prices for commodities (works, services) in the previous calendar year, as well as deflator coefficients applied earlier.

The Order of the Ministry of Economic Development of Russia No. 284 of November 3, 2005 fixed the deflator coefficient for the year 2006 in the amount of 1.132. The mentioned deflator coefficient will be used to index the limiting amount of incomes for 9 months of 2006 restricting the right of organisations to switch over to the simplified system of taxation from January 1, 2007.

The limiting amount of incomes available in 2006, which, if exceeded in the reporting (tax) period, serves as grounds to lose the right of application of the simplified system of taxation, must not be indexed with the mentioned deflator coefficient in 2006, and shall be indexed using this coefficient only in 2007.

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