RS Law digest Main changes in the Law of the Russian Federation from January 11, 2013 to April 1, 2013

Main changes in the Law of the Russian Federation from January 11, 2013 to April 1, 2013

June 2013

1. Arrival notification by mail

The Regulations for Migration Registration of Foreign Citizens and Stateless Persons in the Russian Federation have been amended.

It is prescribed that a host party may submit a notification about the arrival of highly-skilled professionals and their family members to a local agency of the Russian Federal Migration Service directly or through the Multipurpose Center for Provision of Public and Municipal Service (MPC), or send his/her notification by mail.

A person who submits an arrival notification to the MPC must submit his/her identification document.

2. Biometric identification

The list of data to be entered into the Russian Labor Database for Foreign Citizens will include information about the compulsory state dactylography and photography of foreign citizens.

3. Responsibility for children

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For persons who organize dissemination of information through information and telecommunication networks (including the Internet), the failure to take organizational, software and hardware measures aimed at preventing children from accessing information that may harm their health and development will serve as a basis for the imposition of administrative sanctions (Federal Law 14-FZ of February 23, 2013).

The fines provided for by the law are as follows:

  • 5,000–10,000 rubles for persons who conduct entrepreneurial activity without establishing a legal entity;
  • 20,000–50,000 rubles for legal entities.

4. Business launch to be notified about

In accordance with the Federal Law “On the Protection of Legal Entities’ and Individual Entrepreneurs’ Rights in the Course of State Control (Supervision) and Municipal Control,” the relevant authorized agency must be notified about starting to pursuit specific types of entrepreneurial activities. At present, this is also applicable to travel agency activities; the agency to be notified about launching these activities is the Federal Service on Customers' Rights Protection and Human Well-being Surveillance.

In addition, the Russian authorities will have to be notified about starting cargo transportation businesses, specifically:

  • cargo (other than dangerous cargo) transportation by sea, by inland water and rail; and cargo baggage transportation by rail;
  • cargo transportation (cargo relocation without entering into a transportation agreement) by public rail tracks, with the exception removing and returning arrived rail cars from and to rail dead-end tracks. It is required to notify the Federal Transportation Inspection Service about the launch of these types of entrepreneurial activities.

5. The Russian Federation adopts Appendix V.6 to the Convention on Temporary Admission of June 26, 1990, with a number of reservation clauses

The consolidated customs territory of the Customs Union consists of the customs territories of the Republic of Belarus, the Republic of Kazakhstan, and the Russian Federation, including the exterritorial artificial islands, installations, constructions and other objects regarding which the member states of the Customs Union have the power of exclusive jurisdiction (Paragraph 1 of Article 2 of the Customs Code of the Customs Union).

The Russian Federation does not apply Appendix V.6 to the Convention on Temporary Admission for the following reasons:

  • in accordance with Paragraph 2 of Article 358 of the Customs Code of the Customs Union, foreign natural persons may import temporarily to the customs territory of the Customs Union transport vehicles for personal use registered in the territory of foreign states for the period of their stay, however, not for more than one year while being exempted from customs payments;
  • in accordance with Paragraph 3 of Article 358 of the Customs Code of the Customs Union, the transfer of the right of use and/or disposal of the temporarily imported goods for personal use, including the transport vehicles, to another party in the customs territory of the Customs Union is permitted on condition of customs declaring and payment of customs payments according to the procedure specified in the customs legislation of the Customs Union.

The above requirements are not provided for in Appendix V.6 to the Convention on Temporary Admission.

6. Amendments Ratified to the Russian–Armenian Agreement for the Avoidance of Double Taxation of Income and Property

(The Protocol was signed on October 24, 2011 in Moscow)

In accordance with the Protocol, the “Income from Alienation of Property” clause is added to the Agreement, while the articles “Provision of Assistance in Tax Collection” and “Information Exchange” are amended. The amendments are aimed at enhancing tax control efficiency and counteracting abuse related to payment of direct and indirect taxes.

The article “Dividends” prescribes a relative threshold for equity holding (25%) in dividend paying entities that is necessary for their minimal taxation at a rate of 5%.

The article “Interest” prescribes taxation of interest income from commercial loans in income-source countries at a rate of 10%. An exception was made for interest income earned by Russian and Armenian government authorities and Central Banks.

In addition, the term “resident” was specified in accordance with the modern international taxation requirements.

7. Revenue limits to qualify as small and medium-sized businesses remain unchanged

Limits for revenues from the sales of goods (work and services) are established by the Government of the Russian Federation once every five years on the basis of data obtained through continuous statistical monitoring of the activities of small and medium-sized businesses.

In accordance with the Russian Government resolution, revenue limits, as before, should not exceed:

  • 60 million rubles for micro businesses;
  • 400 million rubles for small businesses;
  • 1,000 million rubles for medium-sized businesses.

      • 8. Administrative responsibility for refusal to hire disabled people

      The Law “On Employment in the Russian Federation” has been supplemented, making it obligatory for employers to create or allocate jobs for disabled people (within the framework of the established quota) and report this to the employment service.

      In addition, the Administrative Offences Code of the Russian Federation was amended to provide for employers’ responsibility for the failure to fulfil the established obligations.

      The amended Article 5.42 of the Administrative Offences Code of the Russian Federation provides for a 5,000–10,000 rubles fine for this administrative offence and for refusal to hire a disabled person within the framework of the established quota.

      In addition, this fine applies to unjustified refusal to register a disabled person as unemployed (earlier, the fine was 2,000–3,000 rubles).

      9. Technical plan is indispensable

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      The technical plan has been added to the list of documents required to obtain the permit for the commissioning of facilities. The technical plan is a document that reproduces certain data contained in the Immovable Property State Cadaster and specifies data about a building, a structure, a room or a facility under construction that are required to register a property item, or data about some part or parts of a property item, or new data to be entered into the Immovable Property State Cadaster about a property item registered under a cadastral number.

      10. The List of Food products subject to VAT at a rate of 10% amended

      Pursuant to Federal Law 206-FZ of November 29, 2012, the Russian Tax Code has been amended as follows: the 10% VAT rate is applicable to the sales of not only margarine, but also special-purpose fats (cooking, confectionery, and bakery fats), milk fat replacers, and equivalents.

      In the context of these amendments, the Food Products Code List approved by the Resolution of the Russian Government No. 908 of December 31, 2004, new classification codes for the abovementioned food products were added.

      In addition, food products classified under the code of 90 4821 “Rendered cream and vegetable mixtures” were deleted from the list.

      11. Foreign bank branches existing no more

      The laws “On Banks and Banking”, “On the Central Bank of the Russian Federation (the Bank of Russia)”, and “On Foreign Exchange Regulation and Foreign Exchange Control” make no mention of “a foreign bank branch” any more.

      12. Unregistered for 30 days

      The agreement has been ratified on the procedure for the stay of Russian citizens in the Republic of Kazakhstan and for the stay of Kazakh citizens in the Russian Federation, which was signed in Astana on June 7, 2012.

      The agreement is aimed at creating a favorable environment for the stay of citizens of one state in the other state and provides for the exemption of one party’s citizens who temporarily stay in the other state from the obligation to register (registration at a place of stay) with the host state’s competent authorities within 30 days from the date of arrival.

      The period for temporary stay is calculated from the date of arrival of one state’s citizen to the other state as certified by the migration card signed by the border control authorities upon arrival to the host state.

      A citizen of one party who intends to stay in the territory of the other party for more than 30 days is required to register with the host state’s competent authorities in accordance with its laws.

      13. Export customs duties on oil and oil products decreased

      From April 1, 2013, the rates of export customs duties on crude oil and oil products exported from the Russian Federation and the member states of the Customs Union are as follows:

      The duty rate for crude oil (the rate of export customs duty on 1,000 kg, USD) will be USD 401.5 as against USD 420.6 established from March 1, 2013.

      The rate of export customs duty on liquid fuel, oils, used oil products, light and medium distillates, gas oils, benzol, toluene, and petroleum jelly will be USD 265 (at present, USD 277.6).

      The rate of export customs duty on propane, butanes, ethylene, propylene, butylene, butadiene, and other liquefied gases will be USD 70.5 (at present, USD 131.4).

      The duty rate established for commercial gasoline and straight-run gasoline is USD 361.4 (from March 1, 2013, USD 378.6).

      14. Specifying the procedure for delivery of health care to foreign citizens

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      For foreign citizens who temporarily stay and temporarily or permanently reside in the Russian Federation, medical treatment can be provided by, inter alia, individual entrepreneurs who are engaged in medical activities.

      Upon termination of medical treatment for a foreign citizen, an extract from medical records must be sent to his/her address, as agreed upon with him/her, or to the address of a legal entity or an individual who represents the foreign citizen’s interests. The extract must contain data about the period of medical treatment provided at a medical institution, as well as data about preventive, diagnostic, therapeutic and medical rehabilitation measures taken.

      Invoices for actual medical treatment must be sent by the relevant medical institution within 10 days after the termination of medical treatment to the foreign citizen’s address or to the address of a legal entity or an individual who represents the foreign citizen’s interests, unless otherwise expressly stated in the relevant agreement for medical treatment.

      15. Transportation control for the Customs Union border

      The Agreement for Transportation (Motor Vehicle) Control for the external frontier of the Customs Union (signed on Moscow on June 22, 2011) has been ratified.

      The Agreement provides for the transfer of transportation control from the Russia–Belarus border and the Russia–Kazakhstan border to the external frontier of the Customs Union and creates a legal framework for organizing information exchange between transportation control authorities of Russia, Belarus, and Kazakhstan.

      Application of this Agreement will make it possible:

      • to eliminate duplication of control operations for international motor transportation, reduce control period, and provide joint protection for the national markets for international motor transportation services;
      • for foreign transportation carriers to abide with the national authorization systems of the Russian Federation, Belarus, and Kazakhstan.

          • The Agreement enables the Russian transportation control authority not only to control transportation at check points as prescribed by Russian laws, but also check documents and carry out some other vehicle control operations prescribed by the laws of Belarus and Kazakhstan.

          16. Tobacco smoke law

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          Federal Law No. 15-FZ on the protection against the impact of environmental tobacco smoke and on reduction in tobacco consumption will come into effect from June 1, 2013.

          The Federal Law has established:

          • the general concepts and principles for health protection against the impact of environmental tobacco smoke and consequences of tobacco consumption;
          • the public authorities’ powers related to health protection against the impact of environmental tobacco smoke and consequences of tobacco consumption;
          • citizen rights and duties related to health protection against the impact of environmental tobacco smoke and consequences of tobacco consumption;
          • bans on tobacco smoking in specific areas, rooms, and buildings;
          • price, tax, and organizational measures for reducing demand for tobacco products and restricting tobacco trade;
          • bans on tobacco advertising and sponsorship;
          • public medical treatment measures for smoking addiction;
          • public control measures related to health protection against the impact of environmental tobacco smoke and consequences of tobacco consumption, as well as responsibility for the violation of the Federal Law requirements.