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 15.03.2006

Federal Law No. 39-FZ of March 13, 2006 on the Amendments to Chapters 26.1 and 26.1 of Part 2 of the Tax Code of the Russian Federation and Article 2.1 of the Federal Law on the Amendments to Part 2 of the Tax Code of the Russian Federation and Some Other Acts of the Legislation of the Russian Federation on Taxes and Fees, As Well As on Invalidation of Individual Acts (Provisions of Acts) of the Legislation of the Russian Federation on Taxes and Fees <br>

The amendments support agricultural producers by creation of more favourable conditions for them in the sphere of taxation. Significantly change provisions of Chapter 26.1 "System of Taxation for Agricultural Producers (Uniform Agricultural Tax)" of the Tax Code of the Russian Federation. The amendments pertain to the procedure and terms of switch over to the uniform agricultural tax and termination of use of the system of taxation for agricultural producers, procedure of determination of the object of taxation and the taxable base, procedure of calculation and payment of the uniform agricultural tax. In particular, the amendments expand the list of expenses reducing the taxable base.

Agricultural producers that did not switch over to the uniform agricultural tax are exempted from the profit tax for the period until 2007. Besides, they will enjoy tax exemptions in the period from 2008 through 2011.

The Federal Law is entered into force one month after the day of its official publication except for individual provisions where other time limits for entry into force are envisaged.

Decision of the Government of the Russian Federation No. 128 of March 13, 2006 on the Implementation by the Federal Bodies of Executive Power of the Measures to Ensure the Safety of Citizens Living and Working Permanently or Predominantly in the Safety Zones of Objects of Storage of Chemical Weapons and Objects of Destruction of Chemical Weapons <br>

Defines the federal bodies of executive power empowered with authority to implement the measures to ensure the safety of citizens living and working in the safety zones of objects of storage of chemical weapons and objects of destruction of chemical weapons

The Ministry of Public Health and Social Development of Russia shall define the procedure and provide for the carrying out of the expert evaluation to establish the causal connection of diseases of citizens with the functioning of the mentioned objects.

The Federal Medical and Biological Agency shall provide for the rendering of the medical aid to citizens, including the expert evaluation to establish the causal connection of diseases; work out medical and biological criteria of assessment of the health condition of the mentioned citizens; arrange the medical and social-and-hygienic monitoring of the health of citizens; provide for stockpiling of antidotes necessary to render medical aid to citizens.

The Federal Agency of the Industry shall carry out the measures of development of the social infrastructure in the regions of location of the mentioned objects, as well as construction and outfitting of consulting and diagnostics centres for examination of citizens to be followed by subsequent handing over of these centres to the Federal Medical and Biological Agency; provide for creation of the necessary reserves of the means of individual protection of citizens; provide for creation of local warning systems.

Order of the Government of the Russian Federation No. 328-r of March 10, 2006 <br>

Approves the state program "Creation of Technoparks in the Hi-Tech Sphere in the Russian Federation", the goals being accelerated development of hi-tech industries and turning them into one of the main driving forces of economic growth of Russia. According to program creators, the most efficient mechanism for it is development of the network of technoparks in the hi-tech sphere.

According to the program, technoparks will provide for the territorial concentration of financial and intellectual resources; unite enterprises of hi-tech industries, including the nano-, bio-, information and other technologies. Activities of technoparks will attract scientific organisations and educational institutions providing intellectual and personnel potential.

Technoparks in the hi-tech sphere must provide a set of necessary services to enterprises located on their territories. This will permit enterprises to obtain significant savings of expenses and concentrate on their main activities. It is planned that technoparks will house organisations rendering legal, financial, information and technology, marketing and other services, as well as business incubators whose activities is aimed at implementation of venture projects in the hi-tech sphere.

Objects of infrastructure of technoparks must be formed including also resources of the budget of the Russian Federation. Decision to render state support in creation of technoparks in each particular case shall be taken on the basis of the act of the Government of the Russian Federation specifying the terms of use of the budget resources and the procedure of interaction of the federal bodies of executive power and the bodies of executive power of the subjects of the Russian Federation.

Technoparks in the hi-tech sphere in 2006-2010 are planned for creation on the territories of the Moscow, Novosibirsk, Nizhny Novgorod, Kaluga, Tyumen provinces, Republic of Tatarstan and the city of St.Petersburg. In 2006-2007, it is planned to create the management bodies of technoparks in the hi-tech sphere, carry out design works before the beginning of construction, prepare the basic infrastructure, build the objects, implement the marketing and other organisational measures. In 2008-2010, it is planned to develop the infrastructure of technoparks, attract the leading world hi-tech companies to place their production faculties in technoparks, implement the program to promote Russian hi-tech enterprises at the world market.

Letter of the Ministry of Finance of the Russian Federation No. 03-11-02/50 of March 6, 2006 <br>

Since buildings and structures are not recognised as stationary sales places, activities in their leasing may not be transferred to the system of taxation in the form of the uniform imputed income tax. The uniform imputed income tax does not apply also to handing over for temporary possession and/or use of stationary sales places in a stationary sales network possessing sales rooms (shops and pavilions).

Adjustment of tax obligations for the uniform imputed income tax because of excessively accrued and paid insurance contributions for obligatory pension insurance before introduction of appropriate changes in the Federal Law on obligatory pension insurance in the Russian Federation is not done. Offsetting (return) of excessively paid amounts of insurance contributions is not possible, since these insurance contributions do not meet the requirements of a tax and are not subject to the provisions of the Tax Code on offsetting or return of excessively paid amount of tax. Besides, the authorised body in charge of offsetting (return) of excessively paid amounts of insurance contributions and their procedures are not defined.

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