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 24.11.2006

Decision of the Government of the Russian Federation No. 705 of November 21, 2006 on the Licensing of Activities in the Sphere of Geodesy and Cartography

Instead of the regulations earlier endorsed by the Decision of the Government of the Russian Federation No. 360 of May 28, 2002, introduces new regulations on the licensing of geodesic and cartography activities.

The regulations define the procedure of licensing of geodesic and cartography activities carried out by legal entities and/or independent entrepreneurs.

The regulations specify the licensing requirements to the license holders, license terms, specify the list of documents submitted to get the license and procedure of their checking, time limits for issue of copies of the license.

The Decision refines the earlier envisaged license prerequisite for carrying out geodesic and cartography activities pertaining to the level of education of the head of the legal entity requesting the license. It is necessary to have a higher professional or secondary professional education in geodesy or, respectively, cartography. The given prerequisite is considered fulfilled in the presence of the given education with the deputy head of the organisation or the head of the structural division of the legal entity.

The period of limitation of the license for geodesic and cartography activities makes 5 years as before, which may be prolonged.

The licensing of geodesic and cartography activities is vested in the Federal Agency of Geodesy and Cartography.

Where it pertains to geodesic works in oceans and seas for the sake of safety of navigation in general or creation of maps and hydrographical works to provide for the work of aviation and safety of general navigation, the mapping of the Antarctic, continental shelf of the Russian Federation, territories of foreign states and the World Ocean, including the creation of topographic and sea maps, the licensing is carried out in coordination with the Ministry of Defence of the Russian Federation.

Decision of the Government of the Russian Federation No. 673 of November 11, 2006 on the Endorsement of the Typical Concession Agreement for the Objects of Production, Transfer and Distribution of Electric and Thermal Power

To implement the Federal Law No. 115-FZ of July 21, 2005 on the concession agreements, works out a typical concession agreement for the objects of production, transfer and distribution of electric and thermal power

The concession agreement is a contract envisaging obligations of the independent entrepreneur or legal entity (concessionaire) to create and/or reconstruct at own expense immovable property, where the proprietary right belongs or will belong to the Russian Federation, subject of the Russian Federation or municipal formation (conceding party) and to carry out activities using the mentioned immovable property. The conceding party is obliged to grant to the concessionaire for a certain period of time the rights of possession and use of the object of the concession agreement to carry out the appropriative activities.

The typical agreement defines the following terms: the subject and object of the contract; the duties of the concessionaire to create and/or reconstruct the object of the agreement; procedure of granting land plots to the concessionaire; possession, use and disposal of the objects of property provided to the concessionaire; procedure of transfer of objects of property; procedure of operational activities carried out by the concessionaire; time limits and payments under the agreement and other terms.

The concession agreement for particular objects of production, transfer and distribution of electric and thermal power is concluded in compliance with the given typical agreement. It may include also other provisions not specified in the typical agreement, if they do not contradict the legislation of the Russian Federation.

Letter of the Federal Tax Service No. MM-6-21/1123@ of November 17, 2006 on the Calculation of the Rate of the Tax on Extraction of Mineral Resources for October 2006

In pursuance of the Federal Law No. 126-FZ of August 8, 2001, in the period from January 1, 2005 to December 31, 2006, the rate of the tax on extraction of mineral resources for oil amounts to Rbl 419 per ton and is applied with a coefficient characterising the dynamics of the world prices for oil - Kp.

The Letter provides information necessary for the calculation of the amount of tax by the taxpayer for October 2006.

Thus, with the average level of prices for the Urals oil of USD 54.65 a barrel and the average US dollar rate to the rouble for all days of the tax period of 26.8559, the Kp value is defined as 4.6972.

Taking this coefficient into account, the rate of the tax on extraction of mineral resources for oil has decreased nearly Rbl 158 as compared to the previous tax period to make Rbl 1968.1268 per ton.

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