RS Law digest Main changes in the Law of the Russian Federation from January 1, 2011 to March 1, 2011

Main changes in the Law of the Russian Federation from January 1, 2011 to March 1, 2011

March 2011

Key legislative changes in the Russian Federation

1. A new mediation procedure providing for the participation of an independent intermediary (mediator) has been introduced. Mediator comes in useful in cases concerned with settlement of disputes arising out of matters pertaining to civil law, including those pertaining to exercise of commercial and other economic activity, as well as those arising out of labour or family relationships.

2. The federal Law On The Police has taken effect, stipulating the goals and objectives of the police, as well as the key areas of its operation, its obligations and rights, guidelines for application of certain public enforcement measures by the police, compilation and maintenance of population databases, grounds for the application of force, special-purpose equipment and firearms, the legal status of police officers, as well as a number of other important provisions.

3. The federal Law On Compulsory Health Insurance in the Russian Federation was adopted, stipulating the fundamental principles for carrying out compulsory health insurance, determining the legal status and the powers of the compulsory health insurance foundations and medical organisations operating within the compulsory health insurance system; their rights, obligations and liability, as well as the rights and obligations of insured persons and insurants.

4. The financial performance indicators have risen significantly in respect of corporate bodies that are subject to statutory audit of their financial (accounting) statements (their volume of proceeds exceeds 400 mln rubles (previously – 50 mln rubles) or the balance-sheet assets amount, as of the end of the year preceding the reporting year, exceeds 60 mln rubles (previously - 20 mln rubles).

Statutory audit is now also required in respect of:
  • corporate bodies that are professional participants of the securities market;
  • clearing companies;
  • an organisation which is currency exchange;
  • managing companies of incorporated investment funds, mutual investment funds or non-governmental pension funds.

5. No transaction certificate is required for foreign trade contracts if its amount exceeds an equivalent of USD 50,000. Previously, the right to proceed without registration of a transaction certificate for currency operations carried out by non-residents in the framework of foreign trade transactions was only granted if the total contract amount exceeded an equivalent of USD 5,000.

6. More favourable conditions have been created for high-skilled foreign professionals and their families regarding their entry and stay within the territory of Russia.

Amendments have been equally introduced into the federal laws On the Regulations Concerning Entry into, and Exit from, the Russian Federation, On the Legal Status of Foreign Nationals within the Territory of the Russian Federation, On Migration Registration of Foreign National and Stateless Persons in the Russian Federation. For more information see ‘Hospitality’ of Russian taxes.

7. Certain provisions of the law regulating the procedure of depositing by the employer of funds required for the departure of foreign workers from the Russian Federation and the repayment of such funds were declared null and void.

8. Administrative liability for violations of the antimonopoly regulations established by the Law on Fundamentals of Trade Activities in the Russian Federation has been introduced.

The RF Code of Administrative Offences has been supplemented by three new categories of corpus delicti.

Amendments to the tax laws of the Russian Federation

GENERAL REGULATIONS

  1. It has been established that unlawful suspension of account transactions shall result in interest charge for the benefit of the taxpayer organisation.
  2. The definition of “territory of the Russian Federation and other territories within its jurisdiction” has been provided.

VAT

  1. A zero VAT rate application procedure in respect of provision of services related to transfer of goods across the customs border has undergone an adjustment, with an exhaustive list of such services established.
  2. The Lessee is recognised as a tax agent in respect of VAT, if the Lessor in question is a public institution.
  3. For the purposes of confirmation, the zero VAT rate in respect of foreign trade barter transactions under which goods acquired are not imported into Russia, documents confirming receipt of goods abroad are required as specified by the relevant agreement.

EXCISE TAXES

  1. The excise rates on filter-tipped cigarettes, non-filter cigarettes, petrol, diesel oil and motor oils have been raised.
  2. Since July 1, 2011 manufacturers of alcoholic products or excisable alcohol-containing products are obliged to make an advanced excise payment into the budget.
  3. Since August 1, 2011 transfer of manufactured ethanol or cognac spirit for subsequent manufacturing of alcoholic or excisable alcohol-containing products within the framework of one and the same organisation has been recognised as an excisable act.

PERSONAL INCOME TAX

  1. Tax agents shall independently develop tax ledgers and the procedure for entering information on income paid to an individual into such ledgers.
  2. The procedure for refunding of excess personal income taxes withheld by the tax agent was described in detail.

CORPORATE INCOME TAX

  1. Assets acquired prior to January 1, 2011 (fixed assets and non-tangible assets) are considered depreciable if their historical cost is more than 40,000 rubles.
  2. The maximum amount of foreign currency loan charges accepted in expenses is determined based on the product of the refinancing rate of the Central Bank of Russia multiplied by the coefficient of 0,8.
  3. The tax on revenue of foreign organisations from sources on the territory of the Russian Federation shall be paid by the tax agent no later than on the day following the day of payment of income to foreign companies.
  4. The taxation base cannot be reduced by the amount of losses sustained by a tax payer within the income taxation period at a rate of 0 %.
  5. A special procedure for recognition of expenses related to development of natural resources which brings no tangible results.

TRANSPORT TAX

  1. The motor vehicle tax rate has been reduced by half.
  2. The obligation in submission of calculations on advanced transport tax payments has been abolished.

LAND TAX

  1. The obligation in submission of calculations on advanced land tax payments has been abolished.
  2. It has been established that in respect of land plots listed among the assets included into a mutual investment fund, tax payers shall be deemed as the managing companies. The tax is therefore paid on account of the assets included into such mutual investment fund.

CORPORATE PROPERTY TAX

  1. It has been established that assets included into the mutual investment fund are subject to taxation by the managing company. The tax is paid on account of assets constituting such mutual investment fund.

INSURANCE CONTRIBUTIONS

  1. Payers of insurance contributions, including those subject to special tax regimes, calculate obligatory payment amounts based on the rate of 34%.
  2. Lower insurance contribution rates have been introduced for specific categories of payers.
  3. Accounting statements are submitted in electronic form only, if the insurant’s headcount exceeds 50 people.

CUSTOMS PROCEDURES

  1. The Federal law on Customs Regulations in the Russian Federation takes effect on December 29, 2010 and defines the specific features of regulatory policies for this field.