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 19.03.2007

Letter of the Department of the Tax and Customs Tariff Policy of the Ministry of Finance of the Russian Federation No. 03-03-06/2/42 of March 2, 2007

The payment of amounts of the profit tax shall be made by taxpayers at the place of location of the organisation, as well as the place of location of each if its separate divisions, proceeding from the share of profit falling on these separate divisions determined as an average mean of the specific weight of the average listed number of employees (labour remuneration expenses) and the specific weight of the residual cost of the amortised property of this separate division respectively in the average listed number of employees (labour remuneration expenses) and the residual cost of the amortised property.
      Labour remuneration expenses for employees of the parent office of the organisation according to the manning table may be accepted for the estimate of the share of profit falling on the parent office. Labour remuneration expenses for employees whose actual place of work is another subject of the Russian Federation rather than the place of location of the parent office - the place of location of the separate structural division - shall apply for the calculation of the share of profit falling on this separate division.

Letter of the Department of the Tax and Customs Tariff Policy of the Ministry of Finance of the Russian Federation No. 03-03-06/4/22 of March 2, 2007

According to Subitem 8 of Item 1 of Article 251 of the Tax Code, determination of the taxable base does not include incomes in the form of property obtained by state and municipal institutions at the decision of the bodies of executive power of all levels. The grounds to apply the given norm is a document of execution issued according to established procedure by the appropriate body of executive power. The state contract for the works (rendering services) is an independent reason of obtaining of property on a gratuitous basis and may not be regarded as a decision of the body of executive power.

Letter of the Department of the Tax and Customs Tariff Policy of the Ministry of Finance of the Russian Federation No. 03-04-05-02/3 of March 2, 2007

The taxable base for the uniform social tax with independent entrepreneurs is determined as a sum of incomes obtained by such taxpayers during the tax period from entrepreneurial activities less expenses pertaining to their obtaining. In this case, expenses may not include amounts of professional tax exemption granted to independent entrepreneurs in the calculation of the incomes tax from natural persons in the amount of 20% of the total amount of incomes in the case of absence of documentarily confirmed expenses.

Letter of the Department of the Tax and Customs Tariff Policy of the Ministry of Finance of the Russian Federation No. 03-03-06/1/145 of March 2, 2007

Expenses of purchase of leased property are recognised as expenses in the reporting (tax) periods where leasing payments are envisaged according to the terms of the contract. In this case, the mentioned expenses are included in proportion to the amount of leasing payments.
      The mentioned procedure applies only if the object of leasing is registered on the lessee balance. The cost of the leasing property registered according to the leasing contract on the lesser balance is redeemed by accruing amortisation.

Letter of the Department of the Tax and Customs Tariff Policy of the Ministry of Finance of the Russian Federation No. 03-03-06/1/147 of March 2, 2007

Determination of the taxable base for the profit tax from organisations does not include incomes in the from of amounts of reduction of the registered capital of the organisation in the reported (tax) period if such reduction is done in compliance with the requirements of the legislation of the Russian Federation, the list of cases when the joint-stock company must reduce the registered capital being defined in the Federal Law on joint-stock companies.

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