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Daily Monitoring of the Legislation

Monitoring of the Federal Legislation dated 30.05.2006

Budget Message of the President of the Russian Federation to the Federal Assembly of the Russian Federation of May 30, 2006 on the Budget Policy in 2007

The budget message contains the main directions and guidelines of the budget policy in 2007, as well as for the average-term perspective. In the focus of attention are still the issues of gradual reduction of the rates of inflation. The emphasis of anti-inflation measures must be shifted over from suppression of emerging inflation outbursts to the removal of the causes stipulating preservation of a relatively high level of inflation. There are ten priority directions in the forming and implementation of the budget policy. Among them are: fulfilling state obligations in the sphere of state social insurance, reduction of the buy-out price for the land plots under objects in private possession, simplification of the procedure of privatisation of unitary enterprises.

The message addresses the issues of use of the Stabilisation Fund. The Fund's resources must be divided into two parts: the reserve one (resources accumulated to minimise negative consequences of the falling prices for oil) and the "fund of future generations" (resources formed in excess of the reserved part). The Fund's resources in excess of the basic volume must be allocated exclusively for reimbursement of the sources of external financing of the deficit of the budget and/or an early redemption of the state external debt.

Besides, the President emphasised the need to endorse in the following year the federal budget for the average-term perspective (2008-2010).

A separate subject in the message is further development of the tax policy of the state. The rates of excise duties for gasoline must be differentiated depending on its quality.

The dividends received by Russian legal entities from investments in affiliated companies must be exempted from taxes. The time limit for inclusion of expenses for scientific research and design works, including those failing to produce a positive result, in expenses reducing the profit tax must be reduced from two years to one year. The procedure of payment of excise duties for cigarettes must be changes, and the amount of the social tax exemption for the incomes tax from natural persons for the treatment in medical institutions of the Russian Federation must be increased significantly. All taxes and customs payments must be effected in the Russian currency exclusively.

Special attention is paid to the budget expenses. The priority expenses are those increasing the earnings of budget-supported personnel and servicemen, pensioners, as well as those increasing the birth rates.

Decision of the Government of the Russian Federation No. 318 of May 27, 2006 on the Amendments to the Regulation on the Federal Tax Service

The amendments bring the Regulation on the Federal Tax Service in compliance with the Amendments in the legislation on currency regulation and currency control. It is envisaged that the Federal Tax Service of Russia shall implement the functions of the agent of currency control. The Federal Tax Service of Russia shall endorse the forms of the notifications of the opening (closing) of accounts (deposits) in foreign currencies (currency of the Russian Federation) in the banks outside the territory of the Russian Federation, as well as the form of the notification of the available accounts in the banks outside the territory of the Russian Federation opened under permissions that have expired.

The Federal Tax Service of Russia does not have the authority to control and enforce currency exchanges.

Decision of the Government of the Russian Federation No. 314 of May 27, 2006 on the Interim Rates of Import Customs Duties for Individual Types of Metals, Ores and Concentrates

The rates of the import customs duties for other types of metals, ores and concentrates are fixed for 9 months in the amount of 0% (earlier, 5%) of the customs cost.

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

Decision of the Government of the Russian Federation No. 307 of May 23, 2006 on the Procedure for Providing Communal Services to Citizens

Endorses the new rules of providing communal services to citizens replacing the ones that were in effect for more than 11 years endorsed by the Decision of the Government of the Russian Federation No. 1099 of September 26, 1994. The new rules shall regulate relations between executors and consumers of communal services, specify their rights and duties, responsibility, as well as the procedure of control of quality of provided communal services, procedure of determination of the amount of payment for the communal services if the recording instruments are used and if they are not available, procedure of recalculation of the amount of payment for individual types of communal services during temporary absence of citizens in the occupied dwelling space and procedure of changing of the amount of payment for the communal services if they are provided with improper quality and /or with intervals greater than the specified duration.

The federal legislation specifies that the heat-supply season begins with the average daily temperature of the air in the outside below +8C and ends with the average daily temperature of the air in the outside greater than +8C for more than 5 days in a row. The heating period must begin or end from the day following the last day of the mentioned period.

The Decision defines the particulars of calculation of the payment for communal services depending on the executor of services, availability of recording instruments, time of day. The payment for the electric, thermal power and natural gas by consumers shall be arranged using advance payments or through letters of credit according to the procedure specified in the agreement between the consumer and the power-supply organisation. This rule does not apply to budget-supported organisations, state-run enterprises, housing partnerships and housing cooperatives and other specialised consumer cooperatives.

The consequences are envisaged for a repeated (2 times and more) refusal on the part of the consumer to let the executor or his authorised representative to the dwelling space occupied by the consumer to take the readings of the personal recorders or distribution devices.

As before, the payment for the communal services shall be transferred on the monthly basis before the 10th of the month following the expired one for which the payment is transferred. However, the contract for the management of the apartment house may envisage another time limit for the transfer of payment for the communal services. Requirements to the payment document are specified.

The Decision provides the procedure to qualify the fact of a failure to provide communal services or providing communal services of improper quality.

Order of the Ministry of Finance of the Russian Federation No. 60n of April 11, 2006 on the Endorsement of the Regulation on the Requirements to the Application, Information and Documents Submitted to Get the License for Activities of a Subject in the Insurance Sphere

Defines the requirements to the application, information and documents submitted in compliance with the Law of the Russian Federation No. 4015-1 of November 27, 1992 on the organisation of insurance activities in the Russian Federation to get the license for activities of subjects in the insurance sphere. Specifies the specimens of: application for the license (for insurance, reinsurance, insurance brokerage activities); information on the composition of stock-holders (participants) of the candidate; information on the personal executive body, head (heads) of the collegiate executive body, chief accountant, head of the revision commission (auditor); information on the insurance actuary; business plan for insurance and reinsurance activities for one year or business plan for reinsurance activities for one year. The application must be singed by the head of the candidate for the license or the person authorised according to established procedure.

Submitted economic substantiation for the types of insurance activities shall consist of: business plan for insurance and reinsurance activities for one year or business plan for reinsurance activities; balance report, report of profits and losses, estimate of correlation of actual and normative amounts of the margin of solvency as of the most recent reporting date. The documents must be signed by the authorised person of the applicant and certified with the seal. The documents containing two sheets or more must be also stitched together and paginated.

Registered in the Ministry of Justice of the Russian Federation on May 25, 2006. Reg. No. 7876.

Order of the Ministry of Finance of the Russian Federation No. 65n of April 13, 2006 on the Endorsement of the Form of the Tax Declaration for the Transport Tax and Its Filling Procedure

Endorses a new form of the tax declaration for the transport tax (KND form 1152004) and its filling procedure. The declaration is submitted no later than February 1 of the year following the expired tax period to the tax bodies where the taxpayers are registered at the place of location of transport vehicles.

The Order shall apply beginning with the tax declaration for the transport tax for the year 2006.

Registered in the Ministry of Justice of the Russian Federation on May 25, 2006. Reg. No. 7874.

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