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 22.08.2006

Decision of the Government of the Russian Federation No. 508 of August 17, 2006 on the Endorsement of the Rules of Processing by the Antimonopoly Body of Cases Initiated Because of the Signs of Violation of the Legislation of the Russian Federation on Advertising



The cases shall be initiated and processed by the Federal Antimonopoly Service and its territorial bodies pursuant to the facts of dissemination of promotion materials containing the signs of violation of the legislation of the Russian Federation on advertising, as well as the facts of adoption by the federal and regional bodies of executive power of acts completely or partly contradicting the legislation on advertising.

The Decision defines the jurisdiction of such cases, as well as the procedure of processing of applications, appeals and representations on the violation of the legislation on advertising. Provides a detailed procedure of initiation, processing of the case and decision taking.

The Decision is entered into force from the date of its official publication.

Letter of the Federal Tax Service No. ShT-6-03/786@ of August 9, 2006



Explains individual issues pertaining to application of the zero rate of the value added tax.

In particular, in cases of replacement of defective exported commodities with quality ones, the taxpayer, to correct the taxable base and tax exemptions, must present an adjustment tax declaration. The taxation of the operation of supplies of the quality commodity placed under the customs regime of export in replacement of the defective one must be arranged using the zero tax rate on condition of submission of documents confirming the legality of application of the mentioned rate.

When the taxpayer returns defective commodity supplied to him, VAT amounts accepted for exemption on legal grounds in cases of import of the given commodity under the customs regime of release for free circulation must be restored for payment to the budget.

The Letter explains the procedure of confirmation of the right for the reimbursement for the cases of taxation at the 0% rate. Thus, the customs declaration is submitted in the package of documents confirming the reasons of application of the 0% tax rate only in cases of moving of commodities over the pipelines or electric power lines, rendering services directly associated with the transfer of commodities placed under the customs regime of international customs transit.

When selling the stores exported from the territory of the Russian Federation under the customs regime of moving of stores by sea vessels, the packet of documents confirming the legality of application of the zero VAT rate shall contain standard carrier documents or an import (export) declaration for the transport vehicle indicating the information on available stores (description and quantity) in the transport vehicle with the marks of the customs body at the place of exit of the transport vehicles from the customs territory of the Russian Federation confirming termination of the customs registration of the sea vessel with the date certified with the signature and personal numbered seal of the official of the customs body.

The Letter also provides explanations on the moment of determination of the taxable base for the cases of sale of works (services) directly associated with the transfer through the customs territory of the Russian Federation of commodities placed under the customs regime of international customs transit; procedure of application of tax exemptions.

Letter of the Federal Tax Service No. ShT-6-03/780@ of August 8, 2006



The Federal Tax Service of Russia prepared explanations for the I quarter of 2006 on issues pertaining to application of the Agreement on the principles of collection of indirect taxes for the cases of export and import of commodities, carrying out works, rendering services concluded between the Governments of the Russian Federation and the Republic of Belarus.

Explains, in particular, that the tax body may not refuse to put the stamp of import of commodities to the territory of the Russian Federation from the territory of the Republic of Belarus on the application if at the moment of submission of the documents, the packet lacked the certificate of origin of the commodity drawn up to form ST-1 simultaneously with the tax declaration. The certificate of origin of the commodity (form ST-1) is not indicated in the list of documents that, in compliance with the Regulation on the procedure of collection of indirect taxes and the mechanism of control of their payment when moving commodities between the Russian Federation and the Republic of Belarus, must be presented by taxpayers to the tax body together with the tax declaration.

Explains also that the organisation may submit to the tax body an adjusted application of the import of commodities and payment of indirect taxes if it revealed mistakes in the earlier submitted applications. The application may be presented both simultaneously with the adjustment tax declaration for indirect taxes at the import of commodities to the territory of the Russian Federation from the territory of the Republic of Belarus and without submission of the declaration.

The offsetting of overpaid VAT amounts and/or redirection of the VAT amount due for reimbursement for the commodities (works, services) sold on the territory of the Russian Federation as future payments or redemption of VAT arrears due for payment at the import of commodities to the territory of the Russian Federation from the territory of the Republic of Belarus is not provided.

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