Monitoring of the Federal Legislation dated 11.04.2006

Ruling of the Constitutional Court of the Russian Federation No. 16-O of March 2, 2006 on the Appeal of Citizen V.P.Kornilov against Violation of His Constitutional Rights by Provisions of the Decree of the President of the Russian Federation No. 508 of March 15, 2000 on the Amount of the Temporary Disability Allowance, Rules of Calculation of Uninterrupted Length of Service of Workers and Office Personnel in Cases of Assigning State Social Insurance Allowances, Main Terms of Providing State Social Insurance Allowances and the Regulation on the Procedure of Providing State Social Insurance Allowances

The challenged norms, according to the applicant, introduce a dependence of the amount of the temporary disability allowance on the uninterrupted length of service rather than the length of insured length of service as of the day when the disability occurs, which is in violation of the Constitution of the Russian Federation.

The Constitutional Court emphasised that application of such legal regulation is not in line with the principles of obligatory insurance of working citizens for the cases of temporary disability. In fact, insurance support intended to reimburse temporarily lost earnings to the employee is made dependent on the availability and length of intervals in employment, which attaches to obligatory social insurance the functions that are not specific to it. It reduces significantly the volume of insurance support as compared to the one applied in cases of temporary disability to employees with the same average earnings and length of (insured) service in other circumstances of labour activities, which is in violation of the equality of rights and freedoms of man and citizen. Therefore, the courts, other bodies and officials may not apply normative provisions contained in Item 1 of the rules of calculation of uninterrupted length of service of workers and office personnel in cases of assigning state social insurance all owances, Items 25-27 of the main terms of providing state social insurance allowances and Item 30 of the Regulation on the procedure of providing state social insurance allowances.

However, the loss of legal force of the given norms would create a gap in the regulation of temporary disability allowances for the insured, which would impair implementation of their right for social support in cases of illnesses.

In this connection, the Constitutional Court of the Russian Federation recognised the mentioned provisions gearing the right for the temporary disability allowance and its amount to the uninterrupted length of service as inapplicable from January 1, 2007.

The federal legislator is ordered to provide, no later than the mentioned time limit, regulation of the procedure and terms of implementation of the constitutional right of everyone for social support in cases of illnesses.

Letter of the Department of the Tax and Customs Tariff Policy of the Ministry of Finance of the Russian Federation No. 03-04-08/67 of March 23, 2006

The documents serving as grounds to accept for exemption VAT amounts paid when importing commodities to the customs territory of the Russian Federation include the customs declaration for the imported commodities registered for the customs regimes of release for internal consumption or temporary import and the payment documents confirming the actual payment of VAT amounts to the customs body.

If the value added tax is paid to the customs bodies by the commissioner, the tax is accepted for exemption with the consignor after registration of the purchased commodities on the basis of the documents confirming the payment of the tax by the commissioner, as well as the customs declaration (its copy) for the imported commodities received from the commissioner, rather than the invoice.

Letter of the Department of the Tax and Customs Tariff Policy of the Ministry of Finance of the Russian Federation No. 03-05-01-04/66 of March 15, 2006

The legislation does not contain provisions permitting to avoid taxation of property handed over to a natural person according to donation procedure simultaneously with the tax on the property transferred according to inheritance or donation procedure and the tax on the incomes of natural persons.

The property handed over to a natural person under a donation contract certified with a notary in 2005, where the transfer of the property right is registered in 2006, may, in individual cases, be subject to both the tax on the property transferred according to inheritance or donation procedure and the tax on the incomes of natural persons. According to the Ministry of Finance, the given problem requires legislative regulation.