Monitoring of the Federal Legislation dated 28.09.2006

Letter of the Federal Tax Service No. ShT-8-09/278 of August 2, 2006 on the Taxpayer KPP to Be Indicated in the Documents

According to the actual legislation, major taxpayer organisations may be registered both in the interregional inspection of the Federal Tax Service of Russia for major taxpayers and in the tax body at the place of location of the organisation.

When registered in the inspection for major taxpayers, the organisation gets a notification of registration of the legal entity in the tax body as a major taxpayer indicating the taxpayer identification number (INN) and the code of the reason of registration (KPP), the 5

In this connection, major taxpayer organisations should keep in kind that when submitting the tax declaration for the value added tax, they should indicate on the cover sheet the KPP assigned to it by the tax body where the tax declaration is submitted. Since the tax declaration for the value added tax is submitted by major taxpayers to the tax body at the place of registration as a major taxpayer, the declaration indicates the KPP available in the notification.

To provide for the efficiency of administration of the value added tax, the major taxpayer must indicate the KPP available in the notification also when filling invoices and in the payment documents of VAT transfer to the federal budget.

Letter of the Federal Service of Labour and Employment No. 1074-6-1 of July 11, 2006 on the Payment for the Enforced Truancy

According to the labour legislation, the day of dismissal of the employee for the truancy is the last day of his work, i.e. the day preceding the first day of truancy. If a temporary disability preceded the truancy, confirmed with the sick list, dismissal because of the truancy may occur no sooner than the end of the temporary disability period.

When dismissing an employee because of truancy, the employer must have documents confirming the reason of employee absenteeism. If the lack of opportunities to fulfil his labour functions by the employee is stipulated by illegal deprival of opportunities to work, this is qualified as enforced truancy that may not serve as grounds for dismissal and must be paid for. If the employee does not report for work after the end of the temporary disability period without justifiable reasons, the earnings do not accrue with him from the end of the mentioned period.

Decision of the Presidium of the Higher Arbitration Court of the Russian Federation No. 5133/06 of September 5, 2006

The Presidium of the Higher Arbitration Court of the Russian Federation revoked the court ruling of the federal district court having recognised as legal holding the company liable for the untimely submission of the declaration for the tax on highway users.

It is explained that the tax declaration for each tax is submitted within the time limits specified in the legislation on taxes and fees. The highway user tax is described in Article 5 of the Law of the Russian Federation on the highway funds of the Russian Federation that was in effect in the tax period where the tax declaration was not submitted (2002). Meanwhile, the time limits for submission of declarations for the taxes that serve as sources of generation of highway funds are not specified in the Law. The duty of taxpayers to submit the declarations for the highway user tax to the tax bodies within the time limits envisaged for submission of the quarterly and annual accounting reports was introduced in Item 42 of the Instruction of the Ministry of Taxation of Russia No. 59 of April 4, 2000 on the procedure of calculation and payment of taxes received in the highway funds (invalidated). However, since the legislation of the Russian Federation on taxes and fees did not define the time limits for submission of the declaration for the highway user tax - the Instruction not being the mentioned legislation by virtue of Article 4 of the Tax Code of the Russian Federation - therefore, the tax body did not have reasons to call the company to account for the liability envisaged in Item 2 of Article 119 of the Tax Code of the Russian Federation.