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Daily Monitoring of the Legislation

Monitoring of the Federal Legislation dated 24.04.2006

Decision of the Government of the Russian Federation No. 229 of April 21, 2006 on the Procedure of Management of Resources of the Stabilisation Fund of the Russian Federation

Introduces a new procedure of management of resources of the Stabilisation Fund of the Russian Federation envisaging two methods: purchase of foreign currencies (US dollar, euro, British pound sterling) and their placing on the accounts in the Bank of Russia; purchase of liabilities of foreign states.

For the use of monetary resources on the accounts of the Stabilisation Fund, the Bank of Russia will pay interest specified in the bank account contract. This is not envisaged in the rules of management of the Stabilisation Fund available at the moment and endorsed by the Decision of the Government of the Russian Federation No. 508 of September 30, 2004. According to these rules, the management of resources of the Stabilisation Fund is carried out through transactions committed by the Bank of Russia at the international financial market with foreign currencies and liabilities included in the investment portfolio formed at the Order of the Ministry of Finance of Russia.

The Decision refines the requirements to liabilities of foreign states to place the resources of the Stabilisation Fund. The list of foreign states whose liabilities may be used to place the fund's resources has not changed. Securities of the following governments may be purchased: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxemburg, Netherlands, Portugal, Spain, Great Britain and the USA.

Invalidates the Decision of the Government of the Russian Federation No. 508 of September 30, 2004 on the procedure of management of resources of the Stabilisation Fund of the Russian Federation.

Decision of the Government of the Russian Federation No. 226 of April 20, 2006 on the Endorsement of the Rates of Import Customs Duties for Certain Types of Glasses

Introduces on the permanent basis the rates of import customs duties for certain types of glasses, the cost being determined on the franco border terms of the country of import. The rate of the import customs duty for glasses with the price not greater than USD 2 a piece makes EUR 0.6, with the price greater than USD 2 - 5% of the customs cost. Earlier, these rates were endorsed by the Decision of the Government of the Russian Federation No. 305 of May 18, 2005 on the amendments to the Customs Tariff of the Russian Federation for certain types of glasses for 9 months.

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

Decision of the Government of the Russian Federation No. 221 of April 17, 2006 on the Endorsement of the Rules of Granting Subsidies from the Federal Budget to the Budgets of the Subjects of the Russian Federation to Reimburse Part of Expenses to Pay the Interest under Credits Obtained in Russian Credit Organisations to Provide Communal Infrastructure for the Land Plots Allocated for Housing Construction

Specifies the terms and procedure of granting subsidies from the federal budget to the budgets of the subjects of the Russian Federation being participants of the subprogram "Providing Communal Infrastructure for the Land Plots for Housing Construction" of the federal targeted program "Housing" for the years 2002-2010. The subsidies are granted to reimburse part of expenses to pay the interest under the credits obtained by the bodies of local government, organisations of the communal complex or construction parities to implement investment projects to provide communal infrastructure for the land plots for housing construction.

Reimbursement of the part of expenses to pay the interest shall apply to the credits obtained by borrowers in 2006-2008 for up to three years and in 2009 with the time limit of redemption of the credit no later than December 31, 2010. The reimbursement shall apply to the whole period of the credit proceeding from the maximum reimbursed expenses. In particular, for credits handed out in 2006, the budget may reimburse up to 80% of expenses to pay the interest.

To get the resources to reimburse the interest, the borrower, after concluding the credit contract with the bank, has to submit application to the body of local government while presenting a copy of the credit contract, excerpt from the loan account of the received credit, schedule of redemption of the credit and the payment of interest under it, as well as an estimate of the amount of resources for the reimbursement of the part of expenses to pay the interest under the credit according to the form endorsed by the Federal Agency for Construction and the Housing and Communal Complex.

Then, 30 calendar days after the payment of the interest under the credit, the following must be submitted: copies of documents confirming the timely execution of current obligations under the credit certified by the bank; excerpt from the loan account confirming the credit received by the borrower; documents confirming the use of the received credit for designated purposes certified by the borrower and the bank; certificate of the tax body of the absence with the organisation of the communal complex or construction party of overdue debts in taxes and other obligatory payments; estimate of the amount of resources to reimburse part of expenses to pay the interest.

Decision of the Plenum of the Supreme Court of the Russian Federation No. 8 of April 20, 2006 on the Application of the Legislation by the Courts When Processing the Cases of Adoption of Children

Pursuant to the entry into force from February 1, 2003 of the Code of Civil Procedures of the Russian Federation, as well as introduction of changes to the family legislations, the Supreme Court of the Russian Federation provides explanations on the most complicated issues emerging with the courts when processing the cases of adoption.

Taking into account the specific nature of the cases of this category, the courts, when adopting appropriate declaration, must check its compliance not only with Article 131 of the Code of Civil Procedures of the Russian Federation, but also with the requirements of Article 270 of the Code of Civil Procedures of the Russian Federation. Such declaration is exempted from the state duty, since according to the tax legislation, adoptive parents are exempted from it in cases of the given category.

As defined in the Code of Civil Procedures of the Russian Federation, the child having reached fourteen years of age whose case of adoption is processed must participate in the court hearings on the obligatory basis. However, if, because of the health condition, as well as if before the submission of the application of adoption, the child lived in the family of the adoptive parent and considers him his parent, such hearing is permitted without his participation. The health condition of the adopted child must be confirmed with the medical statement of the expert medical commission of the public health management body of the subject of the Russian Federation, rather than the certificate of the medical institution or a doctor.

The parent's consent for adoption given in court must be recorded in the protocol of the court session and signed personally, as well as recorded in the decision. It is necessary to take into account that proceeding from the parents' priority rights for the bringing up of the child, any of them may revoke, before the court ruling, his earlier consent for adoption regardless of the motives behind it. Meanwhile, refusal of the trustee, adoptive parents, in contrast to the parents' refusal, may not prevent taking a positive decision of adoption by the court, if this is in the interests of the child.

Adoption of the child being a citizen of the Russian Federation by foreign citizens is permitted only if there is no opportunity to hand him over to a family of citizens of the Russian Federation.

Besides, the Family Code of the Russian Federation, in contrast to the Matrimonial Code of the RSFSR, does not envisage any grounds to invalidate the adoption. Therefore, an adoption with violations after the entry into force of the Family Code of the Russian Federation but before the entry into force of the procedure of adoption in court (i.e. from March 1 through September 26, 1996) may be recognised invalid by the court if only it is in the interests of the child. If the violations were made in the court adoption, they may serve as grounds to revoke the court ruling of adoption and refuse to satisfy the application of adoption, but not to invalidate the adoption.

Decision of the Presidium of the Higher Arbitration Court of the Russian Federation No. 14231/05 of March 14, 2006

The essence of the dispute is whether the taxpayer expenses to buy out the land where the privatised enterprise is located are taken into account in the estimate of the profit tax.

As specified by the Presidium of the Higher Arbitration Court of the Russian Federation, compliance of taxpayer expenses pertaining to the purchase of land plots with criteria specified in Article 252 of the Tax Code of the Russian Federation may not serve as the only grounds for their inclusion in expenses taken into account in the calculation of the profit tax without comparing the suffered expenses with other norms of Chapter 25 of the Tax Code of the Russian Federation.

For objects of fixed assets, inclusion of suffered expenses of their purchase in expenses pertaining to production and sale is envisaged only through amortisation. Since land is not included in objects subject to amortisation, its cost is not included in the products made by the organisation. Therefore, the absence in Chapter 25 of the Tax Code of the Russian Federation of the norms of inclusion of the cost of purchase of land plots in expenses by accruing amortisation does not permit the taxpayer to reduce the taxable base for the profit tax by appropriate amounts.

Information Letter of the Presidium of the Higher Arbitration Court of the Russian Federation No. 106 of March 14, 2006

The Presidium of the Higher Arbitration Court of the Russian Federation summarised the practice of examination of disputes pertaining to collection of the uniform social tax.

The subject matter of the recommendations are disputes pertaining to collection of the uniform social tax for compensation payments accrued with the employee in compliance with the Labour Code of the Russian Federation; payments made by the employer for employee studies; daily allowances and other.

The payments made in pursuance of Item 2 of Article 64 of the Federal Law on joint-stock companies in favour of the members of the board of directors of the joint-stock company, i.e. the payments pertaining to execution of their managerial functions, form object of taxation for the uniform social tax. When processing the cases of correctness of determination of the taxable base for the uniform social tax, it is necessary to keep in mind that Item 3 of Article 236 of the Tax Code of the Russian Federation does not permit the taxpayer to choose the tax (uniform social tax or the profit tax) to reduce the taxable base by amounts of appropriate payments.

Legislation of the Russian Federation does not specify responsibility for the failure to submit or untimely submission of the declaration for insurance contributions for obligatory pension insurance. This is because the responsibility envisaged in Item 3 of Article 37 of the Law on pension insurance is specified for the illegal failure to report information that must be reported by this person to the Pension Fund of the Russian Federation according to this Law. Meanwhile, the declaration for insurance contributions in compliance with Item 6 of Article 24 of the Law on pension insurance is submitted to the tax body rather than the body of the Pension Fund of the Russian Federation.

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