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					                                           RUSSIAN FEDERATION

                                                   TAX CODE

                                                   PART TWO
                                              (as amended on 3 June 2006)
______________________________________________
   The Document with Amendments made by:
   Article 16 of the Federal Act No. 118-FZ of 5 August 2000
   Federal Act N 166-FZ from 29 December 2000 (Rossiyskaya Gazeta, N 248, 31.12.2000);
   Federal Act N 71-FZ from 30 May 2001 (Rossiyskaya Gazeta, N 105, 02.06.2001);
   Federal Act N 118-FZ from 7 August 2001 (Rossiyskaya Gazeta, N 151-152, 09.08.2001);
   Federal Act N 110-FZ from 6 August 2001 (Rossiyskaya Gazeta, N 150, 08.08.2001);
   Federal Act N 126-FZ from 8 August 2001 (Rossiyskaya Gazeta, N 153-154, 10.08.2001);
   Federal Act N 148-FZ from 27 November 2001 (Rossiyskaya Gazeta, N 234, 29.11.2001);
   Federal Act N 158-FZ from 29 November 2001 (Rossiyskaya Gazeta, N 237-238, 04.12.2001;
   Federal Act N 179-FZ from 28 December 2001 (Rossiyskaya Gazeta, N 255, 30.12.2001) (effect shall apply to
legal relations arising from 1 January 2002);
   Federal Act N 187-FZ from 29 December 2001 (Rossiyskaya Gazeta, N 255, 30.12.2001);
   Federal Act N 198-FZ from 31 December 2001 (Rossiyskaya Gazeta, N 256, 31.12.2001);
   Federal Act N 57-FZ from 29 May 2002 (Rossiyskaya Gazeta, N 97, 31.05.2002);
   Federal Act N 104-FZ from 24 July 2002 (Rossiyskaya Gazeta, N 138-139, 30.07.2002);
   Federal Act N 110-FZ from 24 July 2002 (Rossiyskaya Gazeta, N 138-139, 30.07.2002);
   Federal Act N 116-FZ from 25 July 2002 (Rossiyskaya Gazeta, N 138-139, 30.07.2002);
   Federal Act N 176-FZ from 24 December 2002 (Parlamentskaya Gazeta, N 246-247, 28.12.2002, N 248-249,
31.12.2002, N 3, 9.01.2003);
   Federal Act N 182-FZ from 27 December 2002 (Rossiyskaya Gazeta, N 245, 31.12.2002);
   Federal Act N 187-FZ from 31 December 2002 (Rossiyskaya Gazeta, N 246, 31.12.2002);
   Federal Act N 190-FZ from 31 December 2002 (Rossiyskaya Gazeta, N 246, 31.12.2002);
   Federal Act N 191-FZ from 31 December 2002 (Rossiyskaya Gazeta, N 246, 31.12.2002);
   Federal Act N 193-FZ from 31 December 2002 (Rossiyskaya Gazeta, N 246, 31.12.2002);
   Federal Act N 196-FZ from 31 December 2002 (Rossiyskaya Gazeta, N 246, 31.12.2002);
   Federal Act N 51-FZ from 6 May 2003 (Rossiyskaya Gazeta, N 86, 08.05.2003) (effect shall apply to legal relations
arising from 1 January 2003;
   Federal Act N 55-FZ from 6 May 2003 (Rossiyskaya Gazeta, N 99, 27.05.2003);
   Customs Code No 61-FZ of 28 May 2003 (Rossiyskaya Gazeta, N 106, 03.06.2003);
   Federal Act N 65-FZ from 6 June 2003 (Rossiyskaya Gazeta, N 111, 10.06.2003);
   Federal Act N 78-FZ from 23 June 2003 (Rossiyskaya Gazeta, N 122, 25.06.2003);
   Federal Act N 86-FZ from 30 June 2003 (Rossiyskaya Gazeta, N 126, 01.07.2003);
   Federal Act N 105-FZ from 7 July 2003 (Rossiyskaya Gazeta, N 132, 09.07.2003) (effect shall apply to legal
relations arising from 1 January 2003);
   Federal Act N 110-FZ from 7 July 2003 (Rossiyskaya Gazeta, N 132, 09.07.2003) (effect shall apply to legal
relations arising from 1 January 2003);
   Federal act N 117-FZ on 7 July 2003 (Rossiyskaya Gazeta, N 132, 09.07.2003);
   Federal act N 139-FZ on 11 November 2003 (Parlamentskaya Gazeta, N 212, 15.11.2003);
   Federal act N 147-FZ on 11 November 2003 (Parlamentskaya Gazeta, N 212, 15.11.2003);
   Federal act N 148-FZ on 11 November 2003 (Parlamentskaya Gazeta, N 212, 15.11.2003);
   Federal act N 163-FZ on 8 December 2003 (Rossiyskaya Gazeta, N 252, 16.12.2003);
   Federal act N 178-FZ of 23 December 2003 (Rossiyskaya Gazeta, N 261, 27.12.2003) (on enforcement see article
2 of the Federal act N 178-FZ of 23 December 2003)
   Federal act N 186-FZ on 23 December 2003 (Parlamentskaya Gazeta, N 239, 27.12.2003, N 240-241, 30.12.2003,
N 242-243, 31.12.2003, N 1, 06.01.2004);
   Federal act No 16-FZ of 5 April 2004 (Rossiyskaya Gazeta, N 72, 08.04.2004) (effect shall apply to legal relations
arising from 1 January 2004);
   Federal act N 58-FZ on 29 June 2004 (Rossiyskaya Gazeta, N 138, 01.07.2004);
   Federal act N 60-FZ on 30 June 2004 (Rossiyskaya Gazeta, N 141, 03.07.2004);
   Federal act N 62-FZ on 30 June 2004 (Rossiyskaya Gazeta, N 141, 03.07.2004);
   Federal act N 65-FZ on 20 July 2004 (Rossiyskaya Gazeta, N 159, 28.07.2004);
   Federal act N 66-FZ on 20 July 2004 (Rossiyskaya Gazeta, N 159, 28.07.2004) (effect shall apply to legal relations
arising from 1 January 2004);
   Federal act N 70-FZ on 20 July 2004 (Rossiyskaya Gazeta, N 159, 28.07.2004);
   Federal act N 83-FZ on 28 July 2004 (Rossiyskaya Gazeta, N 162, 31.07.2004);
   Federal act N 84-FZ of 28 July 2004 (Assembly of Legislation of the Russian Federation, N 31, 02.08.2004);
   Federal act N 86-FZ on 28 July 2004 (Rossiyskaya Gazeta, N 162, 31.07.2004);
   Federal act N 95-FZ on 29 July 2004 (Rossiyskaya Gazeta, N 164, 03.08.2004);
   Federal act N 102-FZ on 18 August 2004 (Rossiyskaya Gazeta, N 179, 21.08.2004);
   Federal act N 103-FZ on 20 August 2004 (Rossiyskaya Gazeta, N 182, 25.08.2004);
   Federal act N 105-FZ on 20 August 2004 (Rossiyskaya Gazeta, N 182, 25.08.2004);
   Federal act N 107-FZ on 20 August 2004 (Rossiyskaya Gazeta, N 182, 25.08.2004);
   Federal act N 108-FZ on 20 August 2004 (Rossiyskaya Gazeta, N 182, 25.08.2004);
   Federal act N 109-FZ on 20 August 2004 (Rossiyskaya Gazeta, N 182, 25.08.2004);
   Federal act N 110-FZ on 20 August 2004 (Rossiyskaya Gazeta, N 182, 25.08.2004);
   Federal act N 112-FZ on 20 August 2004 (Rossiyskaya Gazeta, N 182, 25.08.2004);
   Federal act N 122-FZ on 22 August 2004 (Rossiyskaya Gazeta, N 188, 31.08.2004);
   Federal act N 124-FZ on 4 October 2004 (Rossiyskaya Gazeta, N 220, 07.10.2004);
   Federal act N 127-FZ on 2 November 2004 (Rossiyskaya Gazeta, N 246, 05.11.2004);
   Federal Act N 141-FZ on 29 November 2004 (Rossiyskaya Gazeta, N 265, 30.11.2004);
   Federal act N 183-FZ of 28 December 2004 (Rossiyskaya Gazeta, N 290, 30.12.2004) (is enforcing since 1
January 2005);
   Federal Act N 203-FZ of 29 December 2004 (Rossiyskaya Gazeta, N 292, 31.12.2004) (the effect shall apply to
legal relations arising from 1 January 2005);
   Federal Act N 204-FZ of 29 December 2004 (Rossiyskaya Gazeta, N 292, 31.12.2004) (on enforcement see article
3 of the Federal Act N 204-FZ of 29 December 2004);
   Federal Act N 205-FZ of 29 December 2004 (Rossiyskaya Gazeta, N 292, 31.12.2004) (on procedure for
enforcement see article 2 of the Federal Act N 205-FZ of 29 December 2004);
   Federal Act N 208-FZ of 29 December 2004 (Rossiyskaya Gazeta, N 292, 31.12.2004) (on procedure for
enforcement see article 2 of the Federal Act N 208-FZ of 29 December 2004);
   Federal Act N 212-FZ of 30 December 2004 (Rossiyskaya Gazeta, N 292, 31.12.2004) (on procedure for
enforcement see article 3 of the Federal Act N 212-FZ of 30 December 2004);
   Federal Act N 50-FZ of 18 May 2005 (Rossiyskaya Gazeta, N 107, 21.05.2005);
   Federal Act N 55-FZ of 3 June 2005 (Rossiyskaya Gazeta, N 120, 07.06.2005) (enforced since 1 January 2006);
   Federal Act N 58-FZ of 6 June 2005 (Rossiyskaya Gazeta, N 125, 14.06.2005) (on procedure for enforcement see
article 8 of the Federal Act N 58-FZ of 6 June 2005);
   Federal Act N 78-FZ of 1 July 2005 (Rossiyskaya Gazeta, N 142, 02.07.2005) (enforced since 1 January 2006);
   Federal Act N 90-FZ of 18 July 2005 (Rossiyskaya Gazeta, N 156, 20.07.2005);
   Federal Act N 93-FZ of 21 July 2005 (Rossiyskaya Gazeta, N 161, 26.07.2005) (on procedure for enforcement see
article 15 of the Federal Act N 93-FZ of 21 July 2005);
   Federal Act N 101-FZ of 21 July 2005 (Rossiyskaya Gazeta, N 161, 26.07.2005) (on procedure for enforcement
see article 5 of the Federal Act N 101-FZ of 21 July 2005);
   Federal Act N 106-FZ of 21 July 2005 (Rossiyskaya Gazeta, N 163, 28.07.2005);
   Federal Act N 107-FZ of 21 July 2005 (Rossiyskaya Gazeta, N 161, 26.07.2005) (on procedure for enforcement
see article 4 of the Federal Act N 107-FZ of 21 July 2005);
   Federal Act N 117-FZ of 22 July 2005 (Rossiyskaya Gazeta, N 162, 27.07.2005) (enforced since 1 January 2006);
   Federal Act N 118-FZ of 22 July 2005 (Rossiyskaya Gazeta, N 166, 30.07.2005) (on procedure for enforcement
see article 2 of the Federal Act N 118-FZ of 22 July 2005) (the effect shall apply to legal relations arising from 1
January 2005);
   Federal Act N 119-FZ of 22 July 2005 (Rossiyskaya Gazeta, N 168, 03.08.2005) (on procedure for enforcement
see article 5 of the Federal Act N 119-FZ of 22 July 2005);
   Federal Act N 131-FZ of 20 October 2005 (Rossiyskaya Gazeta, N 239, 25.10.2005) (enforced since 1 January
2006);
   Federal Act N 155-FZ of 5 December 2005 (Rossiyskaya Gazeta, N 276, 08.12.2005);
   Federal Act N 158-FZ of 6 December 2005 (Rossiyskaya Gazeta, N 278, 09.12.2005) (the effect shall apply to
legal relations arising from 1 January 2006);
   Federal Act N 168-FZ of 20 December 2005 (Rossiyskaya Gazeta, N 290, 23.12.2005) (on procedure for
enforcement see article 4 of the Federal Act N 168-FZ of 20 December 2005)
   Federal Act N 201-FZ of 31 December 2005 (Rossiyskaya Gazeta, N 297, 31.12.2005);
   Federal Act N 205-FZ of 31 December 2005 (Rossiyskaya Gazeta, N 297, 31.12.2005) (on procedure for
enforcement see article 4 of the Federal Act N 205-FZ of 31 December 2005);
   Federal Act N 16-FZ of 10 January 2006 (Rossiyskaya Gazeta, N 8, 19.01.2006) (enforced since 1 April 2006)
   Federal Act N 28-FZ of 28 February 2006 (Rossiyskaya Gazeta, N 42, 02.03.2006) (on procedure for enforcement
see article 3 of the Federal Act N 28-FZ of 28 February 2006);
   Federal Act N 75-FZ of 3 June 2006 (Rossiyskaya Gazeta, N 121, 08.06.2006) (on procedure for enforcement see
article 3 of the Federal Act N 75-FZ of 3 June 2006).
   _______________________________________________




                                                                                           Adopted by the State Duma
                                                                                                      on 19 July 2000


                                                                                                           Approved of
                                                                                           by the Council of Federation
                                                                                                      on 26 July 2000




                                         SECTION VIII Federal Taxes



                                        Chapter 21. Value-Added Tax



                                             Article 143. Taxpayers
   The following entities shall be payers of the value-added tax (hereinafter in this chapter referred to as taxpayers)
(the paragraph is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000):

  Organizations;

  Sole proprietors;

   Persons recognized as payers of the value-added tax (hereinafter in this articles referred to as tax) in connection
with movement of goods across the customs border of the Russian Federation, determined in accordance with the RF
Customs Code (the paragraph is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29
December 2000).

   Articles 39, 143 and 235 of the RF Tax Code do not contain themselves any requirements concerning payment of
taxes (obligations) by private notaries, do not provide for them specific tax duties and do not establish taxation
components. Therefore, there is no reason to assert that articles 39, 143 and 235 of the RF Tax Code mutually
connected with paragraph 4 of clause 2 of article 11, recognizing private notaries along with sole proprietors being
payers of the value-added tax and the uniform social tax, do not take into account the legal status of private notaries
as self-employed citizens and violate their constitutional rights - decision of the Constitutional Court of the Russian
Federation no 116-O of 6 June 2002.




                                   Article 144. Registration as taxpayer
  1. Taxpayers shall be subject to obligatory registration in a fiscal agency in accordance with articles 83, 84 of this
Code and with the account of specifics provided by this chapter.

   2. Foreign organizations shall have the right to get registered in fiscal agencies as taxpayers at the place of
location of their permanent representative offices in the Russian Federation. Registration as a taxpayer shall be
provided by the fiscal agency on the basis of a written application of the foreign organization.
   3. Foreign organizations having some sub-divisions (representative offices, branches) within the RF territory
independently choose division, at which place of tax registration they will give tax declarations and pay the tax as a
whole on operations of all the sub-divisions of the foreign organization being within the RF territory. The foreign
organizations are obliged to notify the tax authorities on the choice in writing at the place of location of their sub-
divisions being within the RF territory (the clause has been added since 1 January 2006 by the Federal act N 119-FZ
of 22 July 2005).
   (The article is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000)



                   Article 145. Exemption from performance of taxpayer’s duties
   1. Organizations and sole proprietors shall have the right to exemption from performance of taxpayer’s duties
connected with calculation and payment of the tax (hereinafter referred to as - exemption), if for three previous
calendar months the sum of proceeds on sales of goods (works, services) of these organizations or sole proprietors,
without the tax has not exceed in aggregate two million rubles (the clause is in the wording enforced from 1 January
2004 by the Federal act No 117-FZ of 7 July 2003; is in the wording enforced since 1 January 2006 by the Federal act
N 119-FZ of 22 July 2005, - see the previous wording).

  2. Provisions of this article shall not apply to organizations and sole proprietors selling goods liable to excise duty
during previous successive calendar months (The clause is in the wording enforced from 1 January 2004 by the
Federal act No 117-FZ of 7 July 2003).

   3. Exemption in accordance with clause 1 of this article shall not be applied referring to duties arising in connection
with importation of goods into the customs territory of the Russian Federation, which are liable to taxation in
accordance with subclause 4 of clause 1 of article 146 of this Code.

   Persons using the right for exemption must submit an appropriate written notification and documents specified in
clause 6 of this article, which confirm the right to this exemption, to the fiscal agency at the place of their registration.

  The above mentioned notification and documents shall be submitted not later than the 20-th day of the month
beginning from which these persons use their right to exemption.

    The form of notification on using the right of exemption shall be approved by the RF Ministry finance (the paragraph
is in the wording enforced since 2 August 2004 by the Federal act N 58-FZ on 29 June 2004).

   4. Organizations and sole proprietors, which sent to the fiscal agency a notification on using the right of exemption
(on extension of the exemption period) may not refuse from this exemption within 12 successive calendar months,
except for the cases, when the right of exemption is lost by them in accordance with clause 5 of this article.

   Upon expiration of 12 calendar months and not later than the 20-th day of the following month organizations and
sole proprietors which used the right of exemption shall submit to the fiscal agencies the following documents:

   Documents confirming what during the specified exemption period the sum of proceeds on sales of goods (works,
services) calculated according to clause 1 of this article without the tax for each three successive calendar months did
not exceed in aggregate two million rubles (the paragraph is in the wording enforced from 1 January 2004 by the
Federal act No 117-FZ of 7 July 2003; is in the wording enforced since 1 January 2006 by the Federal act N 119-FZ of
22 July 2005, - see the previous wording);

  A notification on extension of use of the right of exemption during the following 12 calendar months or on refusal to
use this right.

   5. If during the period where the organizations and sole proprietors use the right of exemption the sum of proceeds
on sales of goods (works, services) without the tax for each three successive calendar months exceeded two million
rubles, or if the taxpayer sold goods liable to excise duty, the taxpayers shall lose the right of exemption beginning
from the 1-st day of the month when this excess took place or the goods and (or) mineral raw materials liable to
excise duty were sold (the paragraph is in the wording enforced from 1 January 2004 by the Federal act No 117-FZ of
7 July 2003; is in the wording enforced since 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the
previous wording).
   The sum of the tax for the month when the above excess took place or the goods and (or) mineral raw materials
liable to excise duty were sold shall be restored and paid to the budget according to the established procedure.

   If a taxpayer has not submitted the documents specified in clause 4 of this article (or submitted documents
containing unreliable data), as well as if the fiscal agency has established that the taxpayer does not follow the
restrictions established by this clause and clauses 1 and 4 of this article, the sum of the tax shall be restored and paid
to the budget in accordance with the established procedure, the corresponding sums of tax sanctions and penalties
being levied from the taxpayer.

   6. The following documents shall confirm the right of exemption (extension of the exemption period) in accordance
with clauses 3 and 4 of this article:

  Extract from the balance sheet (submitted by organizations);

  Extract from the book of sales;

  Extract from the book of incomes and expenditures and economic operations (submitted by sole proprietors);

  A copy of the book of received and made out invoices.

    7. In the cases provided by clauses 3 and 4 of this article the taxpayer shall have the right to send to the fiscal
agency a notification and documents by a registered mil. In this case the date of submission shall be the sixth day
following the date of sending of the registered letter.

   8. Sums of the tax to be deducted in accordance with articles 171 and 172 of this Code before he started using the
right of exemption in accordance with this article on goods (works, services), including fixed assets and intangible
assets acquired for performance of operations considered to be objects of taxation in accordance with this chapter,
but not used for these operations, after sending by the taxpayer of a notification on using the right of exemption shall
be restored in the last tax period before sending the notification on using the right of exemption by reducing tax
deductions.

   Sums of the tax paid on goods (works, services) acquired by taxpayers who lost the right of exemption in
accordance with this article before the loss of this right, and used by the taxpayer after the loss of this right when
carrying out operations considered to be objects of taxation in accordance with this chapter, shall be deducted in
accordance with the procedure established by articles 171 and 172 of this Code.
   (The article is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002, - see the
previous wording)




                                        Article 146. Object of taxation
  1. The following operations shall be the object of taxation:

   1) sales of goods (works, services) on the territory of the Russian Federation, including sales of objects of pledge
and transfer of goods (results of performance of works, rendering of services) on the basis of smart-money or
novation agreements, and also transfer of property rights (the paragraph is supplemented since 1 July 2002 by the
Federal act N 57-FZ of 29 May 2002, the effect shall be applied to the relations arisen since 1 January 2002, - see the
previous wording).

   For purposes of this chapter transfer of the right of ownership for goods, results of performed works, rendering of
services on a gratis basis shall be considered as sales of goods (works, services);

   2) transfer of goods (performance of works, rendering of services) on the territory of the Russian Federation for
personal purposes, expenses of which are not taken for deduction in calculation of the tax on profits of organizations,
including via depreciation deductions (the subclause is in the wording enforced since 1 January 2002 by the Federal
act N 110-FZ of 6 August 2001, - see the previous wording);

  3) performance of civil and erection work for personal consumption;

  4) importation of goods into the customs territory of the Russian Federation.
  2. For purposes of this chapter the following operations shall not be recognized as subject for taxation (the
paragraph is in the wording enforced from 1 July 2002 by the Federal act N 57-FZ of 29 May 2002; the effect shall be
applied to the relations arisen since 1 January 2002, - see the previous wording);

  1) operations specified in clause 3 of article 39 of this Code;

   2) transfer on a gratis basis of dwelling houses, kindergartens, clubs, sanatoriums and other socio-cultural and
public utility objects, as well as roads electricity networks, substations (local exchanges), gas networks, water intake
constructions and other similar objects to state authorities and local self-management bodies (local authorities) (or,
upon the decision of the above bodies, to special organizations which use and maintain the above objects according
to the purpose thereof);

  3) transfer of property of state and municipal enterprises, repurchased in order of privatization;

   4) performance of works (rendering of services) by agencies incorporated in the system of state authorities and
local self-management bodies within the framework of the executive authorities in the certain field of activity entrusted
with them, if mandatory character of performance of these works (rendering of services) was established by the
legislation of the Russian federation, legislation of components of the Russian Federation, acts of local self-
management bodies (the subclause is in the wording enforced from 1 July 2002 by the Federal act N 57-FZ of 29 May
2002; the effect shall be applied to the relations arisen since 1 January 2002, - see the previous wording).

  5) transfer of objects of fixed assets on a gratis basis to state authorities and management and local self-
management bodies, as well as budget institutions, state and municipal unitary enterprises.

  6) transactions for sale of land plots (their shares) (the subclause has been added from 1 January 2005 by the
Federal act N 109-FZ on 20 August 2004);

   7) transfer of the organization’s property rights its assignee (assignees) (the subclause has been added from 1
September 2005 by the Federal act N 118-FZ of 22 July 2005; the effect shall be applied to the relations arisen since
1 January 2005).




                                 Article 147. Place of realization of goods
   For purposes of this chapter the place of realization of goods shall be the territory of the Russian Federation, if (the
paragraph is in the wording enforced from 1 January 2001 by the Federal act N 166-FZ of 29 December 2000, - see
the previous wording):

  the goods are on the territory of the Russian Federation and is not shipped, nor transported;

  the goods are located on the territory of the Russian Federation at the moment of shipment or transportation;

  the paragraph has been excluded from 1 January 2001 by the Federal act N 166-FZ of 29 December 2000.




                          Article 148. Place of realization of works (services)

  1. For purposes of this chapter the place of realization of works (services) shall be the territory of the Russian
Federation, if (paragraph is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29
December 2000):

   1) works (services) are connected directly with real estate property (except air vessels, sea vessels or inland
vessels and space objects) located on the territory of the Russian Federation. In particular, these works (services)
involve engineering, assembling, engineering and assembling, repair, restoration works, works on planting trees and
shrubs, rent services (the subclause is supplemented from 1 January 2006 by the Federal act N 119-FZ of 22 July
2005, - see the previous wording);

   2) works (services) connected with movable estate, air, sea vessels and inland vessels located on the territory of
the Russian Federation. In particular, these works (services) involve installation, assembling, , re-processing,
processing, repair and maintenance service (the subclause is in the wording enforced from 1 January 2006 by the
Federal act N 119-FZ of 22 July 2005, - see the previous wording);

    3) services are actually rendered on the territory of the Russian Federation in the sphere of culture, art, education
(training), physical culture, tourism, leisure and sport (subclause is in the wording enforced from 1 July 2002 by the
Federal act No 57-FZ of 29 May 2002; the effect shall apply to relationships arising from 1 January 2002; is
supplemented from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous wording);

    4) the buyer of works (services) shall perform his activities on the territory of the Russian Federation (the paragraph
is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000).

   The place of performance of buyer’s activity shall be the territory of the Russian Federation in the case of actual
presence of the buyer of works (services) specified in this subclause, on the territory of the Russian Federation on the
basis of the state registration of the organization or sole trader, and in the event of absence thereof - on the basis of
the place specified in the founding documents of the organization, place of management of the organization, place of
location of the permanent representative office (if the works (services) are rendered through this permanent
representative office), place of location of the natural persons. The provision of this subclause shall be applied in (the
paragraph is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000; in the
wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relationships
arising from 1 January 2002, - see the previous wording):

   Transfer, submission of patents, licenses, trade marks, copyright or other similar rights (the paragraph is in the
wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000; in the wording enforced
from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relationships arising from 1
January 2002; is in the wording enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the
previous wording);

  Rendering of services (performance of works) on development of the computer programs and databases (software
and information products of computer facilities), their adaptations and updating (the paragraph has been added from 1
January 2006 by the Federal act of 22 July 2005 N 119-FZ);
   ____________________________________________________________________
  The fourth - ninth paragraphs of the previous wording shall be the fifth - tenth paragraphs respectively of this
wording - Federal act N 119-FZ of 22 July 2005.
  ____________________________________________________________________

   Rendering consulting, juridical, accounting, engineering, advertising, marketing information processing services, as
well as in the case of performance of research and development works. Engineering services mean engineering-
consulting services on preparation of the process of production and selling of products (works, services), preparation
of building and operation of industrial, infrastructure, agricultural and other installations, pre-project and project
services (preparation of the feasibility studies, project and design developments and other similar services).
Information processing services mean services on collection and generalization, systematization of information arrays
and providing the results of processing of this information in the user’s disposal (the paragraph is in the wording
enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000; in the wording enforced from 1
July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relationships arising from 1 January
2002; is supplemented from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous wording);

   providing personnel, if the personnel works at the place of activity of the buyer (the paragraph is in the wording
enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000; in the wording enforced from 1
July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relationships arising from 1 January
2002, - see the previous wording);

   giving in rent of movable property, except on-land motor-transport means (paragraph is in the wording enforced
from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relationships arising from 1
January 2002, - see the previous wording);

   rendering of agent’s services attracting a person (organization or natural person) on behalf of the main participant
of the contract to render services provided by this subclause (paragraph is in the wording enforced from 1 July 2002
by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relationships arising from 1 January 2002, - see
the previous wording);

  the paragraph has lost its force since 1 January 2006 - Federal act N 119-FZ of 22 July 2005, - see the previous
wording;
  the paragraph has lost its force since 1 January 2006 - Federal act N 119-FZ of 22 July 2005, - see the previous
wording;

   4_1) Services on transportation and also services (work) directly connected with transportation (except for services
(works), directly connected with transportation of the goods placed under a customs procedure of the international
customs transit) are arisen (performed) by the Russian organizations or sole proprietors in the case of departure and
(or) destination points are on the RF territory.

   Place of realization of services on the territory of the Russian Federation if the vehicles under the chartering
contract, assuming transportation on these vehicles shall be granted by the Russian organizations and sole
proprietors and a departure and (or) a destination points are on the territory of the Russian Federation. Thus air, sea
vessels and vessels of internal navigation used for transportations shall be admitted vehicles used for transportations
of the goods and (or) passengers by water (sea, river), air transport;
   (The subclause has been added since 1 January 2006 by the Federal act N 119-FZ of 22 July 2005)

   4_2) services (work) directly connected with transportation of the goods, placed under a customs procedure of the
international customs transit shall be carried out by the organizations or sole proprietors which place of realization of
the activity admits the territory of the Russian Federation (the subclause has been added since 1 January 2006 by the
Federal act N 119-FZ of 22 July 2005)

   5) the activity of the organization or sole trader who perform these works (render services) is provided on the
territory of the Russian Federation (in the part of performance of kinds of works (rendering of kinds of services) which
are not provided by subclauses 1-4_1 of this clause) (the subclause is in the wording enforced from 1 January 2001
by the Federal act No 166-FZ of 29 December 2000; is in the wording enforced since 1 January 2006 by the Federal
act N 119-FZ of 22 July 2005, - see the previous wording)

   1_1. The territory of the Russian Federation does not admit the place of performance of works (services) with a
view of the present chapter, if:

  1) works (services) are connected directly with real estate (except for air, sea vessels and vessels of internal
navigation, and also space objects), being outside the territory of the Russian Federation. Building, assembly,
construction, repair, restoration works, works on gardening, rent services concern to such works in particular;

   2) works (services) are connected directly with personal estate being outside the territory of the Russian
Federation, and also with air, sea vessels and vessels of internal navigation. Installation, assembly, re-processing,
processing, repair, maintenance service concern to such works (services), in particular;

    3) services actually appear outside the territory of the Russian Federation in the sphere of culture, art, education
(training), physical training, tourism, rest and sports;

   4) buyer of works (services) does not carry out activity within the territory of the Russian Federation. Provision of
the present subclause shall be applied at performance of those kinds of works and services which are listed in
subclause 4 of clause 1 of the present article;

   5) services on transportation and services (works) directly connected with transportation, chartering, are not listed
in subclause 4_1 and 4_2 of clause 1 of the present article.
   (The clause has been added since 1 January 2006 by the Federal act N 119-FZ of 22 July 2005).

    2. The place of performance of the activity of an organization or sole proprietor performing kinds of works
(rendering kinds of services), which are not provided by subclauses 1-4_1 of clause 1 of this article shall be the
territory of the Russian Federation in the case of actual presence of this organization or sole proprietor on the territory
of the Russian Federation on the basis of the state registration, and in the absence thereof - on the basis of the place
specified in the founding documents of the organization, place of management of the organization, place of location of
the permanent representative office (if the works (services) are rendered through this permanent representative
office), place of location of the natural persons. on the basis of the place specified in the founding documents of the
organization, place of management of the organization, place of location of the permanent executive authority of the
organization, place of location of the representative office in the Russian Federation (if the works (services) are
rendered through this permanent representative office), place of location of the natural persons (the paragraph is in
the wording enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous wording).
   For purposes of this chapter the territory of the Russian Federation shall not be considered the main place of
performance of the activity of an organization or sole proprietor, which provide for use air vessels, sea vessels or
inland vessels under a contract of leasing (freight for time) with the crew, as well as transportation services, if
transportation is carried out between the ports located outside the territory of the Russian Federation (paragraph is in
the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to
relationships arising from 1 January 2002, - see the previous wording).

   3. If realization of works (services) has auxilliary character referring to realization of main works (services), the
place of this auxilliary realization shall be the place of realization of main works (services).

   4. Documents confirming the place of performance of works (rendering services) shall be (the paragraph is in the
wording enforced from 1 July 2002 by the Federal act No 57-FZ of         29 May 2002; the effect shall apply to
relationships arising from 1 January 2002, - see the previous wording):

  1) contract made with foreign or Russian persons;

  2) documents confirming the fact of performance of works (rendering services).




                        Article 149. Operations that are not subject to taxation
                                       (exempted from taxation)
   1. Submission on the territory of the Russian Federation premises by lessor in lease to foreign citizens or
organizations accredited in the Russian Federation shall not be subject to taxation (exempted from taxation) (The
clause is in wording enforced from 1 July 2002 by the Federal act N 57-FZ of 29 May 2002).

   Provisions of the first paragraph of this clause shall be applied if the legislation of the corresponding foreign state
has established a similar procedure with respect to citizens of the Russian Federation and Russian organizations
accredited in this foreign state, or if this norm has been provided by an international contract (agreement) of the
Russian Federation. The list of foreign states with respect to whose citizens and (or) organizations the norms of this
clause are applied, shall be determined by the federal state authority in the field of international affairs, together with
the RF Ministry of finance (the clause is in wording enforced from 1 July 2002 by the Federal act N 57-FZ of 29 May
2002; is in the wording enforced since 2 August 2004 by the Federal act N 58-FZ on 29 June 2004; is in the wording
enforced since 1 January 2004 by the Federal act N 127-FZ on 2 November 2004, - see the previous wording).

   2. Realization (as well as transfer, performance, rendering for internal purposes) of the following goods and
services on the territory of the Russian Federation shall not be subject to (exempted from) taxation:

  1) the following medical goods of domestic and foreign production according to the list approved by the RF
Government:

   the paragraph is excluded since 1 January 2002 by the Federal act N 179-FZ from 28 December 2001, - see the
previous wording;

   the paragraph is excluded since 1 January 2002 by the Federal act N 179-FZ from 28 December 2001, - see the
previous wording;

  the most important and vital medical instruments and devices;

   prosthetic and orthopedic products, raw materials and materials for manufacturing thereof and semi-finished goods
thereto (the paragraph is supplemented from 1 January 2001 - Federal act N 166-FZ from 29 December 2000, - see
the previous wording);

   technical means including auto motor transport, materials that may be used only for disability prevention or
rehabilitation of the disabled;

   glasses (except for sun-protection), lenses and frames for glasses (except for sun-protection) (the paragraph is in
the wording enforced from 1 July 2002 by the Federal act N 57-FZ of 29 May 2002; the effect shall be applied to the
relations arising from 1 January 2002, - see the previous wording);
   2) medical services rendered by medical organizations and (or) institutions, doctors engaged in private medical
practice except cosmetic, veterinary and sanitary-epidemiologic services. The restriction set by this clause shall not
apply to veterinary and sanitary-epidemiologic services financed from the budget. For purposes of this chapter
medical services shall include (the paragraph is added since 1 January 2001 by the Federal act N 166-FZ from 29
December 2000, supplemented from 1 July 2002 by the Federal act N 57-FZ of 29 May 2002; is in the wording
enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous wording):

   services determined by the list of services provided under mandatory medical insurance (the paragraph is in the
wording enforced from 1 July 2002 by the Federal act N 57-FZ of 29 May 2002; the effect shall be applied to the
relations arising from 1 January 2002, - see the previous wording);

   services rendered to population with reference to diagnostics, prevention and treatment regardless of the form and
source of payment thereof according to the list approved by the RF Government (the paragraph is in the wording
enforced from 1 July 2002 by the Federal act N 57-FZ of 29 May 2002; the effect shall be applied to the relations
arising from 1 January 2002, - see the previous wording);

   services in collection of blood from the population, rendered under contracts with in- and out-patient medical
institutions and departments (the paragraph is in the wording enforced from 1 July 2002 by the Federal act N 57-FZ
of 29 May 2002; the effect shall be applied to the relations arising from 1 January 2002, - see the previous wording);

  first-aid services rendered to population;

   the paragraph is excluded from 1 July 2002 by the Federal act N 57-FZ of 29 May 2002; the effect shall be applied
to the relations arising from 1 January 2002, - see the previous wording);

  services in providing duties of medical personnel at patient’s bed;

   patalogo-anatomic services (the paragraph is in the wording enforced from 1 July 2002 by the Federal act N 57-FZ
of 29 May 2002; the effect shall be applied to the relations arising from 1 January 2002, - see the previous wording);

   services rendered to pregnant women, new-born children, disabled, drug-addicted patients (the paragraph has
been added from 1 July 2002 by the Federal act N 57-FZ of 29 May 2002; the effect shall be applied to the relations
arising from 1 January 2002, - see the previous wording);

   the paragraph is excluded from 1 July 2002 by the Federal act N 57-FZ of 29 May 2002; the effect shall be applied
to the relations arising from 1 January 2002, - see the previous wording;

   3) services concerning taking care of patient, the disabled and the aged, rendered by state and municipal
institutions of social security to people for whom the necessity of care is confirmed by corresponding opinions of
bodies of public health and social security of population;

   4) services concerning keeping children in pre-school institutions, giving lessons to children under age in circles,
clubs (including sport clubs) and studios);

   5) food-stuff produced directly by student and school canteens, canteens of other educational institutions, canteens
of medical organizations, children pre-school institutions, and realized by them in the above institutions, as well as
food-stuff produced directly by public catering organizations and realized by them to the above canteens or above
institutions (the clause is supplemented from 1 July 2002 by the Federal act N 57-FZ of 29 May 2002; the effect shall
be applied to the relations arising from 1 January 2002, - see the previous wording).

   The provisions of this subclause shall be applied with respect to student and school canteens, canteens of other
educational institutions, canteens of medical organizations only in case of full or partial financing of these institutions
from the budget or from the monies of the fund of mandatory medical insurance;

   6) services concerning preservation, completion and use of archives, rendered by archives institutions and
organizations;

  7) services concerning transportation of passengers:

   by city passenger transport of general use (except taxis and route taxis). For purposes of this article services
concerning transportation of passengers by city passenger transport of general use shall involve services in
transportation of passengers under uniform conditions and terms of transportation of passengers at uniform tariffs set
by self-management bodies, including with providing all the privileges for transportation approved in accordance with
the established procedure (the paragraph is in wording enforced from 1 January 2001 by the Federal act N 166-FZ
from 29 December 2000);

   sea, river, railway or motor local transport (except taxis and route taxis) under conditions of transportation of
passengers at uniform tariffs, providing all the privileges for transportation approved in accordance with the
established procedure;

   8) ritual services, works (services) in manufacturing of tombstones and decoration of graves, as well as realization
of objects of funeral ritual (in accordance with the list approved by the RF Government) (the subclause is in wording
enforced from 1 January 2001 by the Federal act N 166-FZ from 29 December 2000);

   9) post stamps (except collection stamps) stamped postcards and envelopes, lottery tickets of lotteries arranged
upon a decision of the management authority (the subclause is in the wording enforced from 1 July 2002 by the
Federal act N 57-FZ of 29 May 2002; the effect shall be applied to the relations arising from 1 January 2002, - see the
previous wording);

  10) services in providing for use of dwelling premises in the dwelling fund of all types of ownership;

   11) coins made of precious metals (except collection coins), which are currency of the Russian Federation or
currency of foreign states (the subclause is in the wording enforced from 1 January 2001 by the Federal act No 166-
FZ of 29 December 2000).

  Collection coins made of precious metals shall include (the paragraph is in the wording enforced from 1 January
2001 by the Federal act No 166-FZ of 29 December 2000):

   coins made of precious metals, which are currency of the Russian Federation or currency of a foreign state (a
group of foreign states), coined according to the technology providing a mirror surface (the paragraph is in the wording
enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000);

   coins made of precious metals, which are not the currency of the Russian Federation or currency of a foreign state
(a group of foreign states) (the paragraph is in the wording enforced from 1 January 2001 by the Federal act No 166-
FZ of 29 December 2000);

   12) stakes in the authorized capital of an organization, shares in share funds of cooperatives and share investment
funds, securities and tools of fixed-time deals (including forward, futures contracts, options).

  13). services rendered without levy of additional payment with respect to repair and technical maintenance of
goods and home appliances, including medical goods, within the guarantee period thereof, including cost of spare
parts and parts thereto;

   14) services in the sphere of education in case of arrangement by non-commercial educational organizations of
educational and production process (referring to basic and additional education, which is specified in the license) or
bringing up process, except for consulting services and services in giving in rent of premises.

   realization by non-commercial educational organizations of goods (works, services) both of internal production
(produced by educational institutions including educational-production shops within the framework of basic and
additional education process) and acquired elsewhere shall be liable to taxation regardless of the fact whether the
income from this realization is directed to this educational organization or to provide direct needs of development,
improvement of the educational process;

   15) repair and restoration, conservation and reconstruction works performed in restoration of historical and cultural
monuments protected by the state, cult buildings and constructions used by religious organizations (except for
archeological and earthwork in the area of location of historical and cultural monuments or cult buildings and
constructions; engineering works on restoration of completely lost historical and cultural monuments or cult buildings
and constructions; works on production of restoration, conservation constructions and materials; activities on control
over quality of works performed) (the subclause is in the wording enforced from 1 July 2002 by the Federal act N 57-
FZ of 29 May 2002).

   16) works performed in the period of realization of targeted socio-economic programmes (projects) of house
building for military men within the framework of realization of the above programmes (projects), including:
  works on construction of socio-cultural or everyday life objects and appropriate infrastructure;

   works on creation, building and maintenance of professional re-training centres for military men, people dismissed
from military service and members of their families.

   Operations mentioned in this subclause shall not be subject to taxation (exempted from the tax) under condition of
financing of these works exclusive and directly for the account of loans and credits granted by international
organizations and (or) governments of foreign states, foreign organizations or persons in accordance with
intergovernmental or interstate agreements, where one of the sides is the Russian Federation, as well as agreements
signed by order of the RF Government by state authorities empowered by it thereto;

   17) services rendered by bodies authorized thereto, for which the state duty shall be levied, all types of license,
registration and patent duties and fees, customs fees for keeping, as well as duties and fees levied by state
authorities, self-management bodies, other authorized bodies and officials, when providing certain rights to
organizations and persons (including forest fees, rent for use of forest fund and other payments to budgets for the
right of use of natural resources) (the subclause is in the wording enforced from 1 January 2001 Federal act N 166-FZ
from 29 December 2000; is supplemented from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see
the previous wording);

  18) goods under the customs procedure of a tax free shop;

   19) goods (works, services) except goods liable to excise duty, that are realized (performed, rendered) within the
framework of giving gratuitous aid (assistance) to the Russian Federation in accordance with the Federal act "On
gratuitous aid (assistance) to the Russian Federation and amendments and additions to certain legislative acts of the
Russian Federation on taxes and on setting privileges on payments to state extrabudgetary funds in connection with
rendering gratuitous aid (assistance) to the Russian Federation" (the paragraph is in the wording enforced from 1
January 2004 by the Federal act No 117-FZ of 7 July 2003, - see the previous wording).

  Realization of goods (works, services) specified in this subclause shall not be subject to taxation (shall be
exempted from taxation) upon submission to fiscal agencies of the following documents:

   contract (a copy of the contract) of the taxpayer with donors (the organization authorized by donor) of gratuitous aid
(assistance) or with the recipient of the gratuitous aid (assistance) for supply of goods (performance of works,
rendering of services) within the framework of giving gratuitous aid (assistance) to the Russian Federation. In case the
addressee of free aid (assistance) is the federal executive body of the Russian Federation, the contract (a copy of the
contract) is submitted to the tax body with the organization authorized by this federal executive body of the Russian
Federation (the paragraph is in the wording enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July
2005, - see the previous wording);

   certificate (a copy of the certificate certified by a notary) issued in accordance with the established procedure and
confirming assignment of the supplied goods (performed works, rendered services) to humanitarian or technical aid
(assistance);

   extracts of the bank, confirming actual receipt of the proceeds onto the taxpayer’s account in a Russian bank for
the goods (works, services) distributed to the donor of gratuitous aid (assistance) (organization authorized by the
donor) or recipient of gratuitous aid (assistance) (organization authorized by federal executive body of the Russian
Federation) (the paragraph is in the wording enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July
2005, - see the previous wording).

   If a contract provides cash settlements it is an extract of the bank confirming deposition of sums obtained by the
taxpayer into his account in the Russian bank, as well as a copy of credit cash slips confirming actual arrival of the
proceeds from the buyer of the specified goods (works, services) (the paragraph is in the wording enforced from 1
January 2001 by the Federal act No 166-FZ of 29 December 2000);

  20) services in the sphere of culture and art rendered by institutions of culture and art, which include:

   services in giving in rent or hire of audio-, videocarriers from funds of the above institutions, acoustic-technical
equipment, musical instruments, stage equipment, costumes, foot-wear, theatre requisite, stage properties,
stage****** articles, cultural inventory, animals, exhibits and books; services in making copies for purposes of
education and text-books, photocopying, reproduction, xerocopying, microcopying from printed products, museum
exhibits and documents out of funds of the above institutions; services in recording of theatrical, cultural and
entertaining events, in making copies of records from record libraries of the above institutions; services in delivery to
readers and taking from readers of printed products from funds of libraries; services in making up lists, reference-
books and catalogues of exhibits, materials and other objects and collections contained in the fund of the above
institutions; services in giving in rent of theatre and concert stage to other budgetary institutions of culture and art, as
well as services in distribution of tickets mentioned in paragraph three of this clause;

   realization of entrance tickets and season tickets for attendance of theatre, cultural-instructive and entertaining
events, attractions in zoos and parks of culture and rest, excursion tickets and excursion permits the form of which is
approved in accordance with the established procedure as a form of strict accountability (The clause has been added
from 1 July 2002 by the Federal act N 57-FZ of 29 May 2002; the effect shall apply to the relations arising from 1
January 2002, - see the previous wording);

  realization of programmes of performances and concerts, catalogues and booklets.

   For purposes of this chapter institutions of culture and art shall mean theatres, cinemas, concert organizations and
groups, theatre and concert cash booking offices, circuses, libraries, museums, exhibitions, houses and palaces of
culture, clubs, houses (particularly, of cinema, literary men, composer), planetariums, parks of culture and rest,
lecture-halls and people’s universities, excursion bureaus (with exemption of tourist excursion bureaus), sanctuaries,
botanical gardens and zoos, national parks, natural parks and landscape parks (the paragraph is supplemented from
1 July 2002 by the Federal act N 57-FZ of 29 May 2002; the effect shall apply to the relations arising from 1 January
2002, - see the previous wording);

   21) Works (services) on production of cinema products performed (fulfilled) by organizations of cinematography,
rights for use (including release and show) of cinema products which have obtained a certificate of a national film (the
subclause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000);

   22) Services rendered directly in airports of the Russian Federation and the RF air space referring to maintenance
of air vessels, including air-navigation equipment;

   23) Works (services including repair services) referring to maintenance of sea vessels and in-land vessels during
their mooring in ports (all types of port fees, services of port fleet vessels), as well as pilotage (the subclause is in the
wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relations
arising from 1 January 2002, - see the previous wording).

   24) Services of drug-stores on manufacturing of medicines, as well as on manufacturing or repair of spectacle
optics (except sun-protection), on repair of hearing devices and prosthetic-orthopedic articles specified in subclause 1
of clause 2 of this article, services on rendering prosthetic-orthopedic aid (the subclause has been added from 1 July
2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relations arising from 1 January 2002, -
see the previous wording).

   3. The following operations shall not be subject to taxation (shall be exempted from taxation) on the territory of the
Russian Federation (the subclause has been added to from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002;
the effect shall apply to relations arising from 1 January 2002, - see the previous wording):

    1) distribution (transfer for personal purposes) of religious objects and religious literature (according to the list
approved by the RF Government upon presentation of religious organizations (associations)), produced and
distributed by religious organizations (associations), organizations staying in the ownership of religious organizations
(associations), and economic organizations whose authorized capital consists completely of the contribution of
religious organizations (associations), within the framework of religious activity, except for goods liable to excise duty
and mineral raw materials, as well as organization and holding by these organizations of religious rituals, ceremonies,
praying meetings or other cult actions (the subclause has been added from 1 January 2001 by the Federal act No
166-FZ of 29 December 2000; added from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall
apply to relations arising from 1 January 2000, - see the previous wording; the effect shall apply to relations arising
from 1 January 2002, - see the previous wording);

  2) distribution (including transfer, performance, rendering for internal purposes) of goods (except those liable to
excise duty, mineral raw materials and natural resources, as well as other goods according to the list approved by the
RF Government by presentation of All-Russian public organizations of the disabled), works, services (except broker
and other middleman services) produced and distributed (the subclause has been added from 1 January 2001 by the
Federal act No 166-FZ of 29 December 2000):

   by public organizations of the disabled (including those created as unions of public organizations of the disabled),
in which the disabled and their legal representatives make not less than 80%;
   organizations whose authorized capital consists completely of investments of public organizations of the disabled
specified in paragraph two of this subclause, if the list average number of the disabled among their workers is not less
than 50% and their share in the fund of remuneration of labour is not less than 25%;

   institutions where the only owners of property are public organizations of the disabled specified in paragraph two of
this subclause, which are created for achieving educational, cultural, medical-health improving, physical culture and
sport, scientific, informational and other social purposes, as well as for rendering legal and other aid to the disabled,
disabled children and their parents;

  medical-production (labour) shops at anti-tuberculosis, psychiatric, psychoneurological institutions, institutions of
social protection or social rehabilitation of the population;

  3) performance by banks of banking operations (except collection) including:

  attraction of pecuniary funds of organizations and natural persons to deposits;

  allocation of attracted pecuniary funds of organizations and natural persons on behalf of banks and at their
expense;

   opening and keeping bank accounts of organizations and natural persons, including the bank accounts serving for
settlements on bank cards, and also the operations connected with service of bank cards (the paragraph is in the
wording enforced from 1 January 2006 by the Federal act of 22 July 2005 N 119-FZ, - see the previous wording);

  making settlements by order of organizations and natural persons, including correspondent banks, on their bank
accounts;

  cash services to organizations and natural persons;

  purchase and sale of foreign currency in cash and non-cash forms (as well as rendering intermediary services on
operations of purchase and sale of foreign currency);

  performance of operations with precious metals and precious stones in accordance with the RF legislation;

   upon execution of bank guarantees (issuance and cancellation of bank guarantee, confirmation and change
conditions of the specified guarantee, payment on such guarantee, making and checking the documents on such
guarantee), as well as performance by banks of the following operations (the paragraph is in the wording enforced
from 1 January 2006 by the Federal act of 22 July 2005 N 119-FZ, - see the previous wording):

  issuance of guarantees for the third parties, providing meeting of pecuniary obligations;

   rendering services connected with installation and operation of the “client-bank” system, including provision of the
software and training for the personnel maintaining this system;

  Reception from borrowers of the sums at the account of compensation of insurance premiums (insurance
payments), paid by bank under insurance contracts in case of death or approach of physical inability of the specified
borrowers in whom the bank is the insurant and beneficiary (the paragraph has been added since 1 May 2006 by the
Federal act N 28-FZ, the effect shall apply to the relations arising from 1 January 2006);
  (The subclause is in the wording enforced from 1 January 2001 by the Federal act N 166-FZ of 29 December 2000)

   3_1) the services connected with service of bank cards (the subclause has been added since 1 January 2006 by
the Federal act N 119-FZ of 22 July 2005);

  4) operations performed by organizations providing information and technological cooperation between the
participants of settlements, including rendering of services on collection, processing and sending of information
concerning operations with bank cards to participants of settlements;

   5) performance of certain banking operations by organizations, which according to the RF legislation have the right
to perform them without a license of the RF Central Bank;

  6) distribution of articles of folk craft of recognized artistic value (except goods liable to excise duty), samples of
which are registered according to the procedure established by the RF Government;
   7) rendering of services on insurance, co-insurance and reinsurance by insurance organizations, as well as
rendering of services on non-governmental pension security by non-governmental pension funds.

   Or purposes of this article, insurance, co-insurance and reinsurance operations shall be those as a result of which
the insurance organization obtains (the paragraph has been added to from 1 January 2001 by the Federal act No 166-
FZ of 29 December 2000):

   Insurance payments (remuneration) under insurance, co-insurance and reinsurance contracts, including insurance
fees, paid reinsurance commission (the paragraph has been added to from 1 January 2001 by the Federal act No
166-FZ of 29 December 2000);

   Interest charged on depot premiums under contracts of reinsurance and transferred by the reinsurant to the
reinsurer;

   Insurance fees obtained by the authorized insurance organization, which made a contract of insurance according to
the established procedure on behalf and by order of the insurers;

   Funds obtained by the insurer in the order of subrogation from the person responsible for the damage inflicted on
the insurant, at the amount of insurance compensation paid to the insurant (the paragraph is in the wording enforced
from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000);

   8) arrangement of totes and other games based on risk (as well as those involving gambling machines) by
gambling business organizations or sole proprietors (the subclause is in the wording enforced from 1 January 2006 by
the Federal act N 119-FZ of 22 July 2005, - see the previous wording);

   8_1) arrangement of lotteries, held under the decision of the authorized body of executive power, including
rendering of services for realization of lottery tickets (the subclause has been added since 1 January 2006 by the
Federal act N 119-FZ of 22 July 2005);

   9) sale of ores, concentrates and other industrial products containing precious metals, scrap and wastes of
precious metals for production of precious metals and affinities; sale of precious metals and precious stones by
taxpayers (except those specified in subclause 6 of clause 1 of article 164 of this Code) to the RF State Fund of
precious metals and precious stones, funds of precious metals and precious stones of components of the Russian
Federation, the RF Central Bank and banks; sale of precious stones in raw materials (except unprocessed diamonds)
for processing by enterprises regardless of the forms of ownership for further selling for export, sale of precious
stones in raw materials and cut stones to specialized foreign trade organizations, RF State Fund of precious metals
and precious stones, funds of precious metals and precious stones of components of the Russian Federation, the RF
Central Bank and banks; sale of precious metals from the RF State Fund of precious metals and precious stones,
funds of precious metals and precious stones of components of the Russian Federation to specialized foreign trade
organizations, the RF Central Bank and banks, as well as precious metals in ingots by the RF Central Bank and
banks, provided these ingots stay in one of the certified repositories (State repository of valuables, repository of the
RF central Bank or repositories of banks) (the subclause is in the wording enforced from 1 January 2003 by the
Federal act No 110-FZ of 24 July 2002, - see the previous wording).

  10) sale of unprocessed diamonds to processing enterprises of all forms of ownership (the subclause is in the
wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000);

   11) inter-system sale (transfer, performance, rendering for internal purposes) by organizations and institutions of
criminal-procedural system of goods (works, services) produced (performed, rendered) by them;

  12) transfer of goods (performance of works, rendering of services) on a gratuitous basis within the framework of
charitable activity in accordance with the Federal act “On charitable activity and charitable organizations”, except for
goods liable to excise duty;

    13) sale of entrance tickets, the form of which is approved according to the established procedure as a form of
strict accountability, by organizations of physical culture and sport to sport and show events arranged by them,
rendering of services on giving in rent of sport constructions for holding these events;

  14) rendering of services by lawyers, as well as rendering of services of the bars, lawyers bureaus, lawyers
chambers of components of the Russian Federation or the Federal lawyers chamber to their members in connection
with performance by them of their professional activity (the subclause is in the wording enforced from 1 February 2003
by the Federal act No 187-FZ of 31 December 2002, - see the previous wording);

   15) operations on granting of loans in pecuniary form, as well as rendering of financial services on provision of
loans in pecuniary form (the subclause is in the wording enforced from 1 January 2006 by the Federal act N 119-FZ of
22 July 2005, - see the previous wording);

   15_1) performance of notarial actions by the notaries, engaged in private practice, and rendering of services of
legal and technical character according to the legislation of the Russian Federation on notariate (the subclause has
been added from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005);

   16) carrying out of research and development works at the expense of budget funds, as well as funds of the
Russian fund of fundamental researches, Russian fund of technological development and extrabudgetary funds of
ministries, departments, associations formed for these purposes according to the RF legislation; carrying out of
research and development works by institutions of education and science organizations on the basis of economic
contracts (the subclause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29
December 2000; is in the wording enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see
the previous wording);

   17) the subclause has lost its force from 1 January 2002 by the Federal act No 118-FZ of 5 August 2000, - see the
previous wording;

   18) services of sanatorium-resort, health improving organizations and organizations of rest, organizations of rest
and health improvement of children, including children’s health improving camps, located on the territory of the
Russian Federation, executed by means of vouchers or entitlements to treatment and board at sanatoriums and
outside accommodation, as forms of strict accountability (the subclause has been added from 1 July 2002 by the
Federal act No 57-FZ of 29 May 2002; the effect shall apply to relations arising from 1 January 2002; is supplemented
from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous wording);

  19) carrying out of works (rendering services) on extinguishing forest fires;

   20) sale of products of internal production of organizations involved in agricultural production, where the specific
weight of proceeds on sales in the total amount of incomes is not less than 70%, for the account of remuneration of
labour in kind, give outs in kind as remuneration of labour, as well as for public catering of labourers attracted to
agricultural works (the subclause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29
December 2000);

   21) the subclause has lost its force from 1 January 2002 by the Federal act No 118-FZ of 5 August 2000, - see the
previous wording.

  22) sale of dwelling houses, rooms and parts of those (the subclause has been added since 1 January 2005 by the
Federal act N 109-FZ on 20 August 2004);

  23) transfer of share in right of common property in the block of flats while selling apartments (the subclause has
been added since 1 January 2005 by the Federal act N 109-FZ on 20 August 2004);

  24) realization of a breakage and waste of black and nonferrous metals (the subclause has been added from 1
January 2006 by the Federal act N 119-FZ of 22 July 2005);

   25) transfer of the goods (works, services) with the advertising purposes, expenses for purchase of which not
exceed 100 roubles per unit (the subclause has been added from 1 January 2006 by the Federal act N 119-FZ of 22
July 2005)

   4. If the taxpayer performs operations which are subject to taxation and operations which are not subject to taxation
(exempted from taxation) in accordance with the provisions of this article, the taxpayer must keep separate records of
these operations (the subclause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29
December 2000).

  5. The taxpayer performing sales operations of goods (works, services) provided by clause 3 of this article shall
have the right to refuse from exemption of these operations from taxation, providing a certain application to the fiscal
agency at the place of their registration as a taxpayer within the period not later than the 1-st day of the tax period,
beginning from which the taxpayer is going to refuse from exemption or suspend use thereof.
  Such refusal or suspension is possible only referring to all the operations performed by the taxpayer, provided by
one or several subclauses of clause 3 of this article. It is not admitted that these operations could be exempted or not
exempted from taxation subject to the buyer (acquirer) of certain goods (works, services) (the subclause has been
added from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relations arising from 1
January 2002, - see the previous wording).

  Refusal or suspension from exemption from taxation of operations for the period less than a year shall not be
admitted (the subclause has been added from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect
shall apply to relations arising from 1 January 2002, - see the previous wording).

   6. Operations listed in this article shall not be subject to taxation (shall be exempted from taxation) if the taxpayers
performing these operations have certain licenses for performance of the activities licensed in accordance with the RF
legislation.

   7. Exemption from taxation in accordance with the provisions of this article shall not be applied in performance of
entrepreneurial activity in the interest of another person under contracts of commission, agency or agent agreements,
unless otherwise provided by this Code (the subclause has been added to from 1 January 2001 by the Federal act No
166-FZ of 29 December 2000).

   8. If the wording of clauses 1-3 of this article is amended (cancellation of exemption from taxation or referring
taxable operations to operations which are not subject to taxation), the taxpayers shall apply the procedure for
determining the taxable base (or exemption from taxation), which was effective as of the date of shipment of goods
(works, services), regardless of the date of payment (the subclause has been added from 1 July 2002 by the Federal
act No 57-FZ of 29 May 2002; the effect shall apply to relations arising from 1 January 2002).




                Article 150. Importation of goods that are not subject to taxation
              (exempted from taxation) into the territory of the Russian Federation
   Importation to the customs territory of the Russian Federation of the following goods shall not be subject to taxation
(shall be exempted from taxation) (the paragraph is in the wording enforced from 1 January 2004 by the Customs
Code N 61-FZ of 28 May 2003, - see the previous wording):

   1) goods (except those liable to excise duty) imported as gratuitous aid (assistance) to the Russian Federation, in
accordance with the procedure established by the RF Government, in accordance with the Federal act "On gratuitous
aid (assistance) to the Russian Federation and amendments and additions to certain legislative acts of the Russian
Federation on taxes and on setting privileges on payments to state extrabudgetary funds in connection with realization
of gratuitous aid (assistance) to the Russian Federation" (the clause has been added since 1 January 2001 by the
Federal law N 166-FZ from 29 December 2000, is in the wording enforced from 1 January 2004 by the Federal act No
117-FZ of 7 July 2003, - see the previous wording);

  2) goods specified in subclause 1 of clause 2 of article 149 of this Code, as well as raw materials and completing
parts for production thereof;

   3) materials for production of medical immunobioloogical medicines for diagnostics, prevention and (or) treatment
of diseases ( according to the list approved by the RF Government);

  4) art values given as gift to institutions considered to be especially valuable objects of culture and national
heritage of peoples of the Russian Federation, in accordance with the RF Legislation;

   5) all types of printed editions received by state and municipal libraries and museums by way of international book-
exchange, as well as works of the cinema, imported by specialized state organizations for purposes of performance of
international non-commercial exchanges;

   6) products manufactured as a result of economic activities of Russian organizations on plots of land, that are
territory of a foreign state with the right of using land by the Russian Federation on the basis of an international
contract (the subclause is in the wording from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the
previous wording);
   7) technological equipment and spare parts thereto, imported as a contribution in authorized capitals of
organizations;

  8) unprocessed natural diamonds;

   9) goods intended for official use of foreign diplomatic representative bodies and those equalled thereto, as well as
for personal use of diplomatic and administrative-technical personnel of these representative bodies, including
members of their families living together with them;

   10) currency of the Russian Federation and foreign currency, bank notes that are legal means of payment (except
for those intended for collection), as well as securities - stocks, bonds, certificates, bills (the clause is in the wording
enforced since 1 January 2001 by the Federal law N 166-FZ from 29 December 2000);

  11) products of sea trade, caught and (or) manufactured by fish industry enterprises (organizations) of the Russian
Federation (the clause is in the wording enforced since 1 January 2001 by the Federal law N 166-FZ from 29
December 2000).

  2. The clause has lost force since 1 January 2004 -Customs Code N 61-FZ of 28 May 2003. - See the previous
wording.




                  Article 151. Specific features of taxation in movement of goods
                      across the customs territory of the Russian Federation
   1. When importing goods into the customs territory of the Russian Federation subject to the selected customs
procedure, taxation shall be executed in accordance with the following procedure:

  1) when issue goods in free circulation, the tax shall be paid in full volume (the subclause is in the wording
enforced from 1 January 2004 by the Customs Code N 61-FZ of 28 May 2003, - see the previous wording);

  2) when putting goods under customs procedure of re-importation, a taxpayer shall pay sums of the tax he was
exempted from, or sums that were returned to him in connection with exportation of goods in accordance with this
Code, in accordance with the procedure provided by the RF customs legislation;

   3) when putting goods under customs procedures of transit, customs warehouse, re-export, duty-free, free
economic zone, free warehouse, liquidation and waiver in favour the state, transfer of provisions, the tax shall not be
paid (the subclause is supplemented from 1 July 2002 by the Federal act N 57-FZ of 29 May 2002; the effect shall
apply to the relations arising from 1 January 2002; is in the wording enforced from 1 January 2004 by the Customs
Code N 61-FZ of 28 May 2003, - see the previous wording);

   4) when putting goods under customs procedure of processing on the customs territory, the tax shall not be paid
under condition of export of results of processing over the customs territory of the Russian Federation in determined
period (the subclause is in the wording enforced from 1 January 2004 by the Customs Code N 61-FZ of 28 May 2003,
- see the previous wording);

   5) when putting goods under customs procedure of temporary importation, full or partial exemption of payment of
the tax shall be applied, in accordance with the procedure provided by the RF customs legislation;

   6) When importing results of processing of goods put under customs procedure of processing outside of the
customs territory, full or partial exemption of payment of the tax shall be applied, in accordance with the procedure
provided by the RF customs legislation;

   7) when goods are placed under the customs procedure of processing for internal consumption the tax shall be
paid in full volume (the clause is in the wording enforced from 1 January 2004 by the Customs Code N 61-FZ of 28
May 2003, - see the previous wording);

   importing breeding stock, agricultural machines, technological equipment supplied by leasing and intended only for
organization and procedure optimization of technological processes, the tax shall be paid with a delay up to the date
of registration of these goods by leasing recipient, but not longer than 6 months.
   2. When exporting goods from the territory of the Russian Federation, taxation shall be performed in accordance
with the following procedure:

  1) when exporting goods from the territory of the Russian Federation under exportation customs procedure, the tax
shall not be paid.

   Taxation procedure mentioned in this subclause shall also be applied, when putting goods under customs
procedures of customs warehouse, free warehouse or free customs zone for purposes of further exportation of these
goods (including products of processing thereof) in accordance with the customs export procedure;

   2) when taking goods outside the customs territory of the Russian Federation under customs procedure of re-
export, sums of the tax paid at the moment of exportation into the customs territory of the Russian Federation shall be
returned to taxpayer in accordance with the procedure provided by the RF customs legislation;

   3) when taking goods transferred through the customs boarder of the Russian Federation under customs
procedure of transferring of provisions the tax shall not be paid (the subclause has been added from 1 July 2002 by
the Federal act N 57-FZ of 29 May 2002; the effect shall apply to the relations arising from 1 January 2002);
   ____________________________________________________________________
   The subclause 3 of the previous wording is the clause 4 of the present wording since 1 July 2002 - the Federal act
N 57-FZ of 29 May 2002. The effect shall apply to the relations arising from 1 January 2002.
   ____________________________________________________________________

   4) when taking goods outside the customs territory of the Russian Federation under customs procedures other than
those specified in subclauses 1-3 of this clause, exemption from payment of the tax and (or) return of already paid
sums of the tax shall not be executed, unless other wise provided by the RF customs legislation (the subclause is in
wording enforced from 1 July 2002 by the Federal act N 57-FZ of 29 May 2002; the effect shall apply to the relations
arising from 1 January 2002, - see the previous wording).

   3. If it is natural persons who move goods intended for personal, family, household and other needs which are not
connected with entrepreneurial activity, the procedure for payment of the tax to be paid in connection with movement
of goods across the customs border of the Russian Federation shall be determined by the RF Customs Code (the
clause is in the wording enforced from 1 January 2004 by the Customs Code N 61-FZ of 28 May 2003, - see the
previous wording).




                 Article 152. Specific features of taxation in movement of goods
                     across the customs territory of the Russian Federation
                   in the absence of customs control and customs clearance
   1. If in accordance with an international agreement of the Russian Federation customs control and customs
clearance of goods moved across the customs border of the Russian Federation are cancelled, levy of the tax on
goods originating from this state and imported into the territory of the Russian Federation shall be performed by RF
fiscal authorities.

  2. The object of taxation in these cases shall be cost of acquired goods imported into the territory of the Russian
Federation, including costs of delivery thereof until the border of the Russian Federation.

  3. The tax shall be paid to the budget at the same time with payment of the cost of goods, but not later than 15
days from importation of the goods into the customs territory of the Russian Federation (the clause is in the wording
enforced since 1 January 2001 by the Federal law N 166-FZ from 29 December 2000).

   The procedure for payment of the tax on goods moved across the customs territory of the Russian Federation
without customs control and customs clearance shall be determined by the RF Government.




                                             Article 153. Tax base
   1. In selling goods (works, services) the tax base shall be determined by a taxpayer in accordance with this
chapter, subject to specific features of realization of goods works, services) manufactured or acquired by him from
other persons.

   In transfer of goods (performance of work, rendering of services) for internal purposes, considred to be an object of
taxation in accordance with article 146 of this Code, the tax base shall be determined by the taxpayer in accordance
with this chapter.

   When importing goods into the customs territory of the Russian Federation, the tax base shall be determined by the
taxpayer in accordance with this chapter and RF customs legislation

    When applying by taxpayers of different tax rates in selling (transfer, performance, rendering for own needs) goods
(works, services), the tax base shall be determined separately for each type of goods (works, services) taxed at
different rates. When applying similar rates the tax base shall be determined as a total sum of all types of operations
taxed at this rate (the clause has been added since 1 January 2001 by the Federal law N 166-FZ from 29 December
2000).

   The tax base shall be determined with account of the features established by the present chapter when transfer of
the property rights (the paragraph has been added from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005).

   2. When determining the tax base, proceeds on sales of goods (works, services), transfer of the property rights
shall be determined proceeding from all the incomes of a taxpayer, connected with payments for these goods (works,
services), the property rights, drawn by him in cash and (or) in kind, including payment by securities (the paragraph is
supplemented from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous wording).

  Incomes specified in this clause shall be taken into account, if it is possible to estimate them to the extent they may
be estimated.

   3. When determining the tax base, proceeds (expenses) of a taxpayer in foreign currency shall be recalculated in
rubles at the rate of the RF Central Bank on the date corresponding the moment of determination of the tax base
when realization (transfer) of the goods (works, services), the property rights, established by article 167 of the present
Code, or the date when the expenses were actually made. Thus proceeds from realization of the goods (works,
services), stipulated by subclauses 1-3, 8 and 9 of clause 1 of article 164 of the present Code, obtained in foreign
currency shall be recalculated in roubles at the rate of the RF Central bank on the date of payment of the shipped
goods (performed works, rendered services) (the clause is in the wording enforced from 1 January 2006 by the
Federal act N 119-FZ of 22 July 2005, - see the previous wording).




                       Article 154. Procedure for determining the taxable base
                                   in selling goods (works, services)
   1. Unless otherwise provided by this article, when the taxpayer sells goods (works, services), the taxable base shall
be determined as the cost of these goods (works, services) calculated on the basis of the prices determined in
accordance with article 40 of this Code, with the account of excise duties (for goods liable to excise duty) and without
the tax (the clause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December
2000, is in the wording enforced from 1 January 2004 by the Federal act No 117-FZ of 7 July 2003, - see the previous
wording).

   When reception of payment, partial payment by the taxpayer for the account the future deliveries of the goods
(performance of works, rendering of services) the taxable base shall be determined proceeding from the sum of the
received payment with the account of the tax, except for the payment, partial payment obtained by the taxpayer,
applying the moment of determination of the tax base in conformity clause 13 of article 167 of this Code (the
paragraph has been added from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005)

   Taxable base when shipment of the goods (works, services) for the account of the earlier obtained payment, partial
payment included earlier in the tax base shall be determined by the taxpayer according to the procedure established
by the first paragraph of this clause (the paragraph has been added from 1 January 2006 by the Federal act N 119-FZ
of 22 July 2005).
   2. In the event of selling goods (works, services) in barter operations, on a gratuitous basis, transfer of the right of
ownership as a mortgage to the owner of the mortgage in case of non-performance of an obligation secured by a
mortgage, transfer of goods (results of works performed, services rendered) in case of remuneration of labour in kind,
the taxable base shall be determined as cost of these goods (works, services) calculated on the basis of the price
determined according to the procedure similar to the one provided by article 40 of this Code with the account of excise
duties (for goods liable to excise duty) and without the tax (the clause is in the wording enforced from 1 January 2001
by the Federal act No 166-FZ of 29 December 2000 is in the wording enforced from 1 January 2004 by the Federal
act No 117-FZ of 7 July 2003, - see the previous wording).

   In the event of selling goods (works, services) with the account of subventions (subsidies) provided by budgets of
various levels in connection with application by the taxpayer of state regulated prices or with the account of privileges
provided to certain consumers in accordance with the legislation, the taxable base shall be determined as the cost of
sold goods (works, services) calculated on the basis of actual sales prices (the paragraph has been added from 1
January 2001 by the Federal act No 166-FZ of 29 December 2000; is in the wording enforced from 1 January 2006 by
the Federal act N 119-FZ of 22 July 2005, - see the previous wording).

   Sums of the subventions (subsidies) granted by budgets of a various level in connection with application by the
taxpayer of the state controlled prices, or the privileges given to separate consumers according to the legislation shall
not be taken into account when determination of the taxable base (the paragraph has been added from 1 January
2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous wording).

   3. In the event of selling property, which is subject to registration according to the cost with the account of the tax,
the taxable base shall be determined as the difference between the price of the property to be sold determined with
the account of provisions of article 40 of this Code, with the tax, excise duties (for goods liable to excise duty) and the
cost of the property to be sold (balance cost with the account of revaluation) (the clause is in the wording enforced
from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000, is in the wording enforced from 1 January
2004 by the Federal act No 117-FZ of 7 July 2003, - see the previous wording).

   4. In the event of selling agricultural products and products of processing thereof, purchased from natural persons
(which are not taxpayers), according to the list approved by the RF Government (goods liable to excise duty), the
taxable base shall be determined as the difference between the price determined according to article 40 of this Code
with the tax and the price of acquisition of these products (the clause is in the wording enforced from 1 January 2001
by the Federal act No 166-FZ of 29 December 2000, is in the wording enforced from 1 January 2004 by the Federal
act No 117-FZ of 7 July 2003, - see the previous wording).

   5. In the event of selling services referring to production of goods from give-and-take raw materials (materials), the
taxable base shall be determined as the cost of processing thereof, processing or other transformation thereof with
the account of excise duties (for goods liable to excise duties) and without the tax (the clause is in the wording
enforced from 1 January 2004 by the Federal act No 117-FZ of 7 July 2003, - see the previous wording).

   6. In the event of selling goods (works, services) under futures deals (deals implying supply of goods (performance
of work, rendering services) upon expiration of a term provided by the contract, at the price specified directly in this
contract), the taxable base shall be determined as the cost of these goods (works, services) specified directly in the
contract, but not lower than their cost calculated on the basis of the prices determined according to the procedure
similar to the one provided by article 40 of this Code, which are effective as of the date corresponding the moment of
determination of the taxable base established by article 167 of this Code, with the account of excise duties (for goods
liable to excise duty) and without the tax (the clause is in the wording enforced from 1 January 2001 by the Federal
act No 166-FZ of 29 December 2000, is in the wording enforced from 1 January 2004 by the Federal act No 117-FZ of
7 July 2003; is in the wording enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the
previous wording).

   7. In the event of selling goods in reusable tare, having mortgage prices, mortgage prices of this tare shall not be
included in the taxable base, if this tare is to be returned by the seller (the clause is in the wording enforced from 1
January 2001 by the Federal act No 166-FZ of 29 December 2000).
   ____________________________________________________________________
   Clause 7 of the previous wording shall be clause 8 of the present wording from 1 January 2001 - Federal act N
166-FZ of 29 December 2000.
   ____________________________________________________________________

   8. Subject to specific features of sales of goods (works, services), the taxable base shall be determined according
to articles 155-162 of this chapter.
   9. Till the moment of determination of the taxable base with account of the features stipulated by article 167 of this
Code, the sums of payment, partial payment, obtained for the account of the future deliveries of the goods
(performance of works, rendering of services), imposed at the tax rate according to clause 1 of article 164 of this Code
shall not be included to the taxable base (the clause has been added from 1 January 2006 by the Federal act N 119-
FZ of 22 July 2005).




                       Article 155. Specific features of determining of tax base
                                 in case of transfer of property rights
  1. In case of concession of requirement resulting from a contract of sales of goods (works, services), where selling
operations are subject to taxation (are not exempted from taxation in accordance with article 149 of this Code), or in
case of transfer of this requirement to another person on the basis of law, the tax base for operations on sales of the
above goods (works, services) shall be determined in accordance with the procedure provided by article 154 of this
Code.

   2. In realization by a new creditor who obtained the monetary requirement, of financial services, connected with
concession of requirement resulting from a contract of sales of goods (works, services), where selling operations are
subject to taxation, the tax base shall be determined as the sum of surplus of sums of incomes obtained by the new
creditor in case of subsequent concession of the requirement or in case of termination of the corresponding obligation
over the sum of expenditures for acquisition of this requirement.

  3. In case of transfer of property rights by taxpayers, including participants of share construction, for dwelling
houses or premises, shares in dwelling houses or premises, garages or car-places the tax base shall be determined
as a difference between cost on which property rights are transferred, with account of the tax and charges on
purchase of the specified rights.

   4. In case of purchase of the monetary requirement at the third parties the tax base shall be determined as the sum
of surplus of sums of incomes obtained from the debtor and (or) in case of subsequent concession, over the sum of
charges on purchase of the specified requirement.

   5. In case of transfer of the rights connected to the right of conclusion of the contract, and the rent rights the tax
base shall be determined in the procedure stipulated by article 154 of this Code.
   (The article is in the wording enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the
previous wording).




                     Article 156. Specific features of determining of tax base
               by taxpayers drawing incomes on the basis of contracts of agency,
                                 commission or agency contracts
   1. When performing entrepreneur activity in the interests of another person on the basis of contracts of agency,
commission or agency contracts, taxpayers shall determine the tax base as the sum of income drawn by them in the
form of remunerations (any other incomes) as a result of performance of any of these contracts.

   The tax base shall be determined in the similar procedure in case of realization by a pawnee of a subject of the
unclaimed pledge belonging to a depositor in the procedure established by the legislation of the Russian Federation
(the paragraph has been added from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005).

   2. Exemption from taxation shall not apply to operations on realization of services rendered on the basis of
contracts of agency, commission or agency contracts connected with realization of goods (works, services) which are
not subject to taxation (exempted from taxation) in accordance with article 149 of this Code, except for intermediary
services on realization of goods (works, services) specified in clause 1, subclauses 1 and 8 of clause 2 and subclause
6 of clause 3 of article 149 of this Code (the clause is in wording enforced since 1 January 2001 by the Federal law N
166-FZ from 29 December 2000).
                    Article 157. Specific features of determining of tax base
         and specific features of payment of the tax in performance of transportations
                   and realization of international communication services
   1. In performance of transportations (except local transportations in accordance with paragraph three of subclause
7, clause 2 of article 149 of this Code) of passengers, baggage, cargoes, cargo baggage or post by railway, motor, air,
sea or river transport, the tax base shall be determined as the cost of transportation (without tax). In performance of
air transportations limits of the territory of the Russian Federation shall be determined according to the initial and final
points of the air flight (the clause has been added since 1 January 2001 by the Federal law N 166-FZ from 29
December 2000, is in the wording enforced from 1 July 2002 by the Federal act N 57-FZ of 29 May 2002; the effect
shall apply to the relations arising from 1 January 2002; is in the wording enforced from 1 January 2004 by the
Federal act No 117-FZ of 7 July 2003, - see the previous wording).

   2. When selling travel documents at reduced rates, the tax base shall be calculated basing on these reduced rates.

   3. Provisions of this article shall be applied taking into account provisions of clause 1, article 164 of this Code and
shall not be applied to transportations specified in subclause 7, clause 2 of article 149 of this Code, nor to
transportations provided by international contracts (agreements).

   4. In case of return of money for non-used travel documents to buyers, the sum to be returned shall include the
whole sum of the tax. In case of return of travel documents by passengers on their way of travel in connection with
termination of the travel, the sum to be returned shall include the sum of the tax at the amount corresponding to the
distance which is left for passengers to run. In this case, sums actually returned to the passengers shall not be taken
into account on determination of the tax base. (the clause is in wording enforced since 1 January 2001 by the Federal
law N 166-FZ from 29 December 2000).

   5. In realization of international communication services, sums received by communication companies from
realization of this services to foreign buyers shall not be taken into account on determination of the tax base (the
clause is in wording from 1 July 2002 by the Federal act N 57-FZ of 29 May 2002; the effect shall apply to the
relations arising from 1 January 2006, - see the previous wording).




             Article 158. Specific features of determining the tax base in realization
                     of an enterprise as a whole unit, as a property complex
  1. in realization of an enterprise as a whole unit, as a property complex, the tax base shall be determined
separately for each type of assets of the enterprise (the clause is in wording since 1 January 2001 by the Federal law
N 166-FZ from 29 December 2000).

  2. If the price at which the enterprise was sold became lower than the book cost of the sold property, then for
purposes of taxation a correction coefficient shall be applied, calculated as a ratio of the price of selling of the
enterprise to the book cost of the above property (the clause is in wording since 1 January 2001 by the Federal law N
166-FZ from 29 December 2000).

   If the price at which the enterprise was sold became higher than the book cost of the sold property, then for
purposes of taxation a correction coefficient shall be applied, calculated as a ration of the price of selling of the
enterprise, reduced by the book cost of debtors indebtedness (and by the cost of securities, if there is no decision on
revaluation thereof) to the book cost of the sold property, reduced by the book cost of debtors indebtedness (and by
the cost of securities, if there is no decision on revaluation thereof). In this case the correction coefficient to the sum of
debtors indebtedness (and cost of securities) shall not be applied (the clause is in the wording since 1 January 2001
by the Federal law N 166-FZ from 29 December 2000).

  3. For purposes of taxation the price for each type of property shall be taken as equal to the product of the balance
cost and the correction coefficient.

   4. The seller of an enterprise makes up a consolidated invoice, specifying in the column "Total including VAT" the
price at which the enterprise was sold. Besides, fixed assets, intangible assets, other property of production and non-
production types, sum of debtor’s indebtedness, cost of securities and other positions of assets of the balance sheet
shall be organized in the consolidated invoice as independent positions. An inventory act shall be enclosed with the
consolidated invoice (the clause is in the wording since 1 January 2001 by the Federal law N 166-FZ from 29
December 2000).

  In a consolidated invoice the price for each type of property shall be taken as equal to the product of its book cost
and the correction coefficient.

   For each type of property, realization of which is subject to taxation, in the columns "VAT rate" and "VAT amount"
respectively there are calculated rate at the amount of 15-25% and the sum of the tax determined as according to
calculated rate at the amount of 15,25% percent share of the tax base (the paragraph is in the wording enforced from
1 January 2004 by the Federal act No 117-FZ of 7 July 2003, -see the previous wording).




    Article 159. Procedure for determining the tax base in performance of operations
on transfer of goods (performance of works, rendering of services) for internal purposes
         and performance of civil and erection works for personal consumption
   1. In case of transfer by a taxpayer of goods (performance of works, rendering of services) for internal purposes, on
which expenses are not taken to be deduced (as well as by means of depreciation deductions) in calculation of the tax
on profits of organizations, the tax base shall be determined as the cost of these goods (works, services) calculated
basing on the sales prices for similar (or uniform - in the absence thereof) goods (similar works, services), that were
effective in the previous tax period, and in the absence thereof - basing on market prices including excise duties (for
goods liable to excise duty) and without inclusion of the tax (the clause is in the wording enforced since 1 January
2001 by the Federal law N 166-FZ from 29 December 2000; is in the wording enforced from 1 January 2002 by the
Federal act N 110-FZ of 6 August 2001, is in the wording enforced from 1 January 2004 by the Federal act No 117-FZ
of 7 July 2003, - see the previous wording).

   2. In performance of construction and erection works for personal consumption, the tax base shall be determined
as the cost of performance of works, calculated basing on all actual taxpayer’s expenses on performance thereof
including expenses of the reorganized (reorganizing) organization (the clause is supplemented from 1 September
2005 by the Federal act N 118-FZ of 22 July 2005; the effect shall apply to the legal relations arising from 1 January
2005, - see the previous wording).




                Article 160. Procedure for determining the tax base in case of
            importation of goods to the customs territory of the Russian Federation
   1. In case of importation of goods (except goods specified in clauses 2 and 4 of this article and taking into account
articles 150-152 of this Code) into the customs territory of the Russian Federation, the tax base shall be determined
as the sum of (the clause is in the wording enforced from 1 Mat 2006 by the Federal act N 28-FZ of 28 February 2006,
the effect shall apply to the relations arising from 1 January 2006, - see the previous wording):

  1) customs cost of these goods (the clause is in the wording enforced since 1 January 2001 by the Federal law N
166-FZ from 29 December 2000; is in the wording enforced from 1 July 2002 by the Federal act N 57-FZ of 29 May
2002, the effect shall apply to the relations arising from 1 January 2002, - see the previous wording);

  2) customs duty to be paid;

   3) excise duties to be paid (for goods liable to excise duties) (the clause has been added since 1 January 2001 by
the Federal law N 166-FZ from 29 December 2000, is in the wording enforced from 1 January 2004 by the Federal act
No 117-FZ of 7 July 2003, - see the previous wording).

  2. The clause has been excluded since 1 July 2002 by the Federal act N 57-FZ of 29 May 2002; the effect shall
apply to the relations arising from 1 January 2002. - See the previous wording.
  ____________________________________________________________________
  Clause 3 of the previous wording is clause 2 of the present wording since 1 July 2002 - the Federal act N 57-FZ of
29 May 2002. The effect shall apply to the relations arising from 1 January 2002.
  ____________________________________________________________________
   2. When importing into the territory of the Russian Federation of results of processing of goods previously exported
out of it for processing outside the territory of the Russian Federation in accordance with the customs procedure of
processing outside of the customs territory, the tax base shall be determined as the cost of this processing (the clause
has been added from 1 July 2002 by the Federal act N 57-FZ of 29 May 2002; the effect shall apply to the relations
arising from 1 January 2002, - see the previous wording).
   ____________________________________________________________________
   Clause 4 of the previous wording is clause 3 of the present wording since 1 July 2002 - the Federal act N 57-FZ of
29 May 2002. The effect shall apply to the relations arising from 1 January 2002.
   ____________________________________________________________________

   3. The tax base shall be determined separately for each group of goods of one name, type and make imported into
the customs territory of the Russian Federation (the clause is in the wording enforced since 1 January 2001 by the
Federal law N 166-FZ from 29 December 2000).

    In a lot of goods imported into the customs territory of the Russian Federation includes both goods liable and non-
liable to excise duty, the tax base shall be determined separately with respect to each group of the above goods. The
tax base shall be determined in accordance with the similar procedure, if a lot of goods imported into the customs
territory of the Russian Federation includes results of processing of goods previously exported out of the customs
territory of the Russian Federation for processing outside the customs territory of the Russian Federation (the
paragraph is in the wording enforced since 1 January 2001 by the Federal law N 166-FZ from 29 December 2000; is
in the wording enforced from 1 July 2002 by the Federal act N 57-FZ of 29 May 2002, is in the wording enforced from
1 January 2004 by the Federal act No 117-FZ of 7 July 2003, - see the previous wording).
    ____________________________________________________________________
    Clause 5 of the previous wording is clause 4 of the present wording since 1 July 2002 - the Federal act N 57-FZ of
29 May 2002. The effect shall apply to the relations arising from 1 January 2002.
    ____________________________________________________________________

   4. If in accordance with an international agreement of the Russian Federation customs control and customs
clearance of goods imported into the territory of the Russian federation are cancelled, the tax base shall be
determined as the sum of:

  cost of acquired goods, including costs of delivery of the above goods to the frontier of the Russian Federation;

  excise duties to be paid (for goods liable to excise duty) (the paragraph is in the wording enforced from 1 January
2004 by the Federal act No 117-FZ of 7 July 2003, - see the previous wording).

  The paragraph has been excluded by the Federal law N 166-FZ from 29 December 2000.

   5. The tax base shall be determined according to clause 1 of this article with account of the specific features
stipulated by the customs legislation of the Russian Federation in case of importation of the Russian goods placed
under a customs procedure of a free customs area, on the other part of customs territory of the Russian Federation or
in case of their transfer within the territory of specific economic zone to the persons who are not being residents of
such zone (the clause has been added from 1 January 2006 by the Federal act N 117-FZ of 22 July 2005).




                   Article 161. Specific features of determining the taxable base
                                           by fiscal agents
   1. When goods (works, services) are sold on the territory of the Russian Federation by foreign persons that are not
registered in fiscal agencies as taxpayers, the taxable base shall be determined as the sum of proceeds on sales of
these goods (works, services) including the tax.

   Taxable base shall be determined in performance of each operation of selling goods (works, services on the
territory of the Russian Federation with the account of this chapter.

   2. The taxable base specified in clause 1 of this article shall be determined by fiscal agents. Fiscal agents shall be
organizations and sole traders registered in fiscal agencies, acquiring on the territory of the Russian Federation goods
(works, services) from foreign persons specified in clause 1. Fiscal agents must calculate, deduct from the taxpayer
and pay to the budget certain sum of the tax regardless of the fact whether they have taxpayer’s obligations
connected with calculation and payment of the tax, and other obligations established by this chapter (the clause is in
the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000; in the wording
enforced from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relationships arising
from 1 January 2002, - see the previous wording).

   3. When sate authorities and local self-management bodies give in rent federal property, property of components of
the Russian Federation and municipal property on the territory of the Russian Federation, the taxable base shall be
determined as the sum of the rent including the tax. The taxable base shall be determined by the fiscal agent
separately for each rented object of property. In this case the leaseholder of this property shall be fiscal agents. These
persons must calculate, deduct from the incomes paid to the lessor and pay to the budget the corresponding sum of
the tax (the clause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect
shall apply to relationships arising from 1 January 2002, - see the previous wording).

   4. When confiscated property, unmanaged valuables, hidden treasures and bought valuables are sold on the
territory of the Russian Federation, as well as valuables transferred on the right of inheritance to the state, the taxable
base shall be determined on the bases of the price of sold property (valuables) determined with the account of
provisions of article 40 of this Code, with the account of the excise duties (for goods liable to excise duties). In this
case tax agents shall be bodies, organizations or sole traders empowered to sell this property (the clause has been
added from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relationships arising
from 1 January 2002, is in the wording enforced from 1 January 2004 by the Federal act No 117-FZ of 7 July 2003; is
in the wording enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous
wording).

   5. In case of selling of the goods within the territory of the Russian Federation of the foreign persons who are not
registered in tax bodies as taxpayers, organizations and sole traders effecting the entrepreneur activity with
participation in settlements on the basis of assignment contracts, commission contracts or agency contracts with the
specified foreign persons admit as tax agents. In this case the tax base shall be determined by the tax agent as a cost
of such goods with account of excises duties (for goods liable to excise duties) and without inclusion the sums of tax
therein (the clause has been added from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005).

   6. In case within ten years from the moment of registration of a vessel in the Russian international register of
vessels it is excluded from the specified register, except for exclusion owing to recognition of a vessel to have lost,
have disappeared without a trace, structurally have dead, have lost qualities of a vessel as a result of reorganization
or any other changes or if within 45 days from the moment of transfer of the property right to a vessel from the
taxpayer to the customer, registration of a vessel in the Russian international register of vessels is not carried out, the
tax base shall be determined by the tax agent as a cost on which this vessel has been sold to the customer with
account of the tax.

   Thus the tax agent is the person in which property there is a vessel at the moment of its exclusion of the Russian
international register of vessels if a vessel is excluded from the specified register or if within 45 days from the moment
of transfer of the property right to a vessel from the taxpayer to the customer, registration of a vessel in the Russian
international register of vessels is not carried out, the person in which property there is a vessel upon expiration of 45
days from the moment of such transfer of the property rights.

   The tax agent is obliged to estimate the corresponding sum of the tax, to keep it at the taxpayer and to transfer into
the budget under the tax rate stipulated by clause 3 of article 164 of this Code.
   (The clause has been added from 23 January 2006 by the Federal act N 168-FZ of 20 December 2005).



       Article 162. Specifics of determining the taxable base with the account of sums
                     connected with payment for goods (works, services)
   1. Taxable base determined in accordance with articles 153-158 of this Code shall be increased by the sums (the
paragraph is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000; in the
wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relationships
arising from 1 January 2002, - see the previous wording):

  1) the subclause has lost its force from 1 January 2006 - Federal act N 119-FZ of 22 July 2005. - See the previous
wording.

   Provisions of this subclause shall not apply to advance payments or other payments or rendering services taxed at
the rate of 0% in accordance with subclauses 1 and 5 of clause 1 of article 164 of this Code, for which duration of the
production cycle is more than 6 months (according to the list and procedure determined by the RF Government) (the
paragraph is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000; in the
wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relationships
arising from 1 January 2002, - see the previous wording);

   2) payments received for sold goods (works, services) in the form of financial aid for replenishment of specialized
funds, for the account of increase of incomes or otherwise connected with payment for sold goods (works, services);

   3) received in the form of interest (discount) on bonds and bills received for the account of payment for sold goods
(works, services), interest on commodity credit in the part exceeding the size of interest calculated in accordance with
the RF Central Bank interest rates effective during the periods in which the interest was calculated (the subclause is in
the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000);

   4) received insurance payments under contracts of insurance for the account risk of non-performance of contract
obligations by the counteragent of the creditor insurant, if the insured contract obligations provide supply by the
insurant of goods (works, services), sale of which is considered an object of taxation in accordance with article 146 of
this Code;

  5) the subclause is excluded from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000.

   2. Provisions of clause 1 of this article shall not be applied referring to operations of selling goods (works, services),
which are not subject to taxation (are exempted from taxation) as well as referring to goods (works, services), whose
place of sale is not the territory of the Russian Federation in accordance with articles 147 and 148 of this Code (the
clause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply
to relationships arising from 1 January 2002, - see the previous wording).



                       Article 162_1. Specific features of the taxation in case of
                                    reorganization of organizations
   1. In case of reorganization of the organization in the form of allocation at the reorganized (reorganizing)
organization, sums of the tax estimated and paid thereby from the sums of advance or other payments for the account
of the future deliveries of the goods (performance of works, rendering of services), sold within the territory of the
Russian Federation are subject to deductions, in case of transfer of the debt by reorganization to the assignee
(assignees) under the obligations connected to selling goods (works, services) or transfer of property rights.

  Deductions of sums of the tax specified in the present clause shall be made in full after transfer of the debt to the
assignee (assignees) under the obligations connected to selling goods (works, services) or transfer of property rights.

   2. In case of reorganization of the organization in the form of allocation, the tax base of the assignee (assignees)
increases for the sums of advance or other payments for the account of future deliveries of the goods (performance of
works, rendering of services), obtained by way of assignment from the reorganized (reorganizing) organization and
subject to the account at the assignee (assignees).

   3. In case of reorganization in the form of merge, joining, division, transformation the sums of the tax duties
estimated and paid by the reorganized organization from the sums of advance or other payments, obtained for the
account of future deliveries of goods (performance of works, rendering of services) are subject to deductions at the
assignee (assignees).

   4. Deductions of the sum of the tax estimated and paid from the sums of advance or other payments, stipulated by
clause 2 of the present article, and also the sums of the tax specified in clause 3 of the present article shall be made
by the assignee (assignees) after date of realization of the corresponding goods (works, services) or after reflection in
the account at the assignee (assignees) of operations in case of cancellation or change of conditions of the
corresponding contract and return of the corresponding sums of advance payments, but not later than one year from
the moment of such return.

   5. In case of reorganization of the organization irrespective of the form of reorganization the sums of the tax duties
subjected to the registration at the assignee (assignees) and presented to the reorganized (reorganizing) organization
and (or) paid by this organization when purchase (importation) of the goods (works, services), but not presented
thereby to a deduction, are subject to deduction by the assignee (assignees) of this organization in the procedure
stipulated by this chapter.
  Deductions of the sums of the tax duties specified in the first paragraph of this clause shall be made by the
assignee (assignees) of the reorganized (reorganized) organization on the basis of invoices (copies of invoices),
made by the reorganized (reorganizing) organization, or the invoices, presented to the assignee (assignees) by sellers
when purchase of the goods (works, services), and also on the basis of copies of the documents confirming actual
payment by the reorganized (reorganizing) organization of the sums of the tax duties to sellers when purchase of the
goods (works, services), and (or) the documents confirming actual payment of the sums of the tax duties to sellers
when purchase of the goods (works, services) by the assignee (assignees) of this organization.

   6. With the purposes of the this chapter, transfer by the taxpayer of the right of requirement to the to the assignee
(assignees) in case of reorganization of the organization does not admit as a payment of the goods (works, services).
In case of transfer of the right of requirement from the reorganized (reorganizing) organization to the assignee
(assignees) the tax base shall be determined by the assignee (assignees), obtaining the right of the requirement, at
the moment of determination of the tax base according to the procedure established by article 167 of this Code with
account of the provisions, stipulated by subclauses 2-4 of clause 1 and clause 2 of article 162 of this Code.

   7. In case of reorganization of the organization the provisions stipulated by subclauses 2 and 3 of clause 5 of article
169 of this Code for acceptance of the sums of the tax duties to deduction or compensation by the assignee
(assignees) of the reorganized (reorganizing) organization shall be considered to have executed in the presence of
essential elements of the reorganized (reorganizing) organization in invoice.

   8. In case of transfer to the assignee (assignees) of the goods (works, services, property rights), including the fixed
assets and non-material actives, when purchase (importation) of which, the sums of the tax duties have been
accepted by the reorganized (reorganizing) organization to deduction in the procedure stipulated by this chapter the
corresponding sums of the tax duties are not subject to restoration and payment into the budget of the reorganized
(reorganizing) organization.

   9. In case of reorganization of the organization irrespective of the form of reorganization the sums of the tax duties
subject to the registration at the assignee (assignees) and which are subject to compensation according to article 176
of the present Code, but which have not been compensated by the reorganized (reorganizing) organization till the
moment of completion of reorganization, shall be compensated to the assignee (assignees) in the procedure
established by this chapter.

  10. In the presence of several assignees the share of each of the assignees when performance of operations shall
be determined on the basis of the transfer act or dividing balance according to the present article

   11. With a view of the present chapter the reorganized organization is the organization which reorganization shall
be carried out in the form of allocation, till the moment of completion of its reorganization (before the date of the state
registration of the last from the newly created organizations).
   (The article has been added from 1 September 2005 by the Federal act N 118-FZ of 22 July 2005; the effect shall
apply to relationships arising from 1 January 2002, - see the previous wording).



                                              Article 163. Tax period
   1. Tax period (as well as for taxpayers performing obligations of agents, hereinafter referred to as fiscal agents)
shall be established as the calendar month, unless otherwise provided by clause 2 of this article (the clause has been
added from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relationships arising
from 1 January 2002, - see the previous wording).

   2. For taxpayers (fiscal agents) with monthly, during the quarter, proceeds on sales of goods (works, services)
without the tax, which exceed two million rubles the tax period shall be established as a quarter (the clause has been
added to from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relationships arising
from 1 January 2002, is in the wording enforced from 1 January 2004 by the Federal act No 117-FZ of 7 July 2003; is
in the wording enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous
wording).
   (The article is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000)



                                               Article 164. Tax rates
  1. Taxation shall be carried out at the tax rate of 0% in the case of selling:

   1) goods exported under the customs procedure of export and also goods placed under the customs procedure of
free customs procedure subject to submission to fiscal agencies of documents provided by article 165 of this Code
(the subclause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000; in
the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to
relationships arising from 1 January 2002, is in the wording enforced since 1 January 2005 by the Federal act N 102-
FZ on 18 August 2004; is supplemented from 1 January 2006 by the Federal act N 117-FZ of 22 July 2005, - see the
previous wording);

  2) works, services directly connected with production and sales of goods specified in clause 1 of this clause.

   The provisions of this subclause shall apply to works (services) on organization and accompanying, transportation,
loading and reloading of goods exported outside the territory of the Russian Federation or imported into the territory of
the Russian Federation, performed (rendered) by Russian organization or sole traders (except for Russian
transporters on a railway transport) and other similar works (services), as well as works (services) on processing of
goods placed under the customs procedure of processing on the customs territory (the paragraph is in the wording
enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous wording);

   3) works (services) directly connected with transportation of the goods placed under the customs procedure of
international customs transit (the subclause is in the wording enforced from 1 January 2006 by the Federal act N 119-
FZ of 22 July 2005, - see the previous wording);

   4) services on transportation of passengers and baggage, provided the point of departure or destination of the
passengers and the baggage are located outside the territory of the Russian Federation, in the case of execution of
transportation on the basis of uniform international transportation documents (the subclause is in the wording enforced
from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000);

   5) works (services) performed (rendered) directly in the cosmic space, as well as the complex of preparatory land
works (services), which is technically substantiated and closely connected with performance of works (rendering of
services) directly in the cosmic space;

   6) precious metals by taxpayers involved in extraction thereof or production from the scrap and wastes containing
precious metals, to the RF State Fund of precious metals and precious stones, funds of precious metals and precious
stones of components of the Russian Federation, the RF Central Bank, banks (the subclause is in the wording
enforced from 1 January 2003 by the Federal act No 110-FZ of 24 July 2002, - see the previous wording);

   7) goods (works, services) for official use by foreign diplomatic representative offices and those equaled thereto or
for personal use by diplomatic or administrative-technical personnel of these representative offices, including
members of their families staying with them.

   Sales of goods (performance of works, rendering of services) specified in this subclause shall be subject to taxation
at the 0% rate, if the legislation of the respective foreign state has established similar procedure referring to diplomatic
representative offices of the Russian Federation and those equaled thereto, diplomatic or administrative-technical
personnel of these representative offices (including members of their families staying with them), or if this norm is
provided in the international contract of the Russian Federation. The list of foreign states, which representative offices
the norms of this subclause apply to shall be determined by the federal executive authority in the field of international
affairs in cooperation with the RF Ministry of finance (paragraph is in the wording enforced since 2 August 2004 by
the Federal act N 58-FZ on 29 June 2004; is in the wording enforced since 1 January 2005 by the Federal act N 127-
FZ on 2 November 2004, - see the previous wording).

  The procedure for application of this subclause shall be determined by the RF Government.

   8) stores exported from the territory of the Russian Federation under the customs procedure of store movement.
For purposes of this article stores shall be fuel and combustible and lubricant materials, which are necessary for
normal operation of air and sea vessels, vessels of mixed (river-sea) navigation (the clause has been added to from 1
July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relationships arising from 1 January
2002, - see the previous wording).

  9) performed by Russian transporters on a railway transport of works (services) on transportation of the exported
goods outside the territory of the Russian Federation, and exportation from the territory of the Russian Federation of
the processing products, and also connected to such transportation or transportation of works (services), including
works (services) on organization of transportations, accompanying, loading, reloading (the subclause has been added
from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005; is supplemented from 1 May 2006 by the Federal
act N 28-FZ of 28 February 2006, the effect shall apply to relationships arising from 1 January 2006, - see the
previous wording),

   10) the constructed vessels which are subjected to registration in the Russian international register of vessels,
under the condition of submission of the documents stipulated by article 165 of this Code to the tax authorities (the
subclause has been added from 23 January 2006 by the Federal act N 168-FZ of 20 December 2005, - see the
previous wording);

  2. Taxation shall be provided at the 10% tax rate in case of selling:

  1) the following food products:

  Cattle and birds in body weight;

   Meat and meat products (except for the delicacy ones: fillet, veal, tongues, sausage products - uncooked smoked
high quality products, uncooked smoked semi-dry high quality products, uncooked jerked, stuffed high quality
products, smoked products of pork, mutton, beef, veal, fowl meat - balyk, carbonade, neck, ham, pastroma, fillet; pork
and beef baked; canned foods - ham, bacon, carbonade, and tongue jellied):

   Milk and diary products (including ice-cream produced on the basis thereof, except for ice-cream produced from
fruit and berries, fruit and food ice);

  eggs and egg products

  oil

  margarine

  sugar, including raw sugar

  salt

  grain, mixed feed, fodder mixtures, grain wastes

  oily seeds and products of their processing (shrots, oilcakes)

  bread and bakery products (including buns, rusks and barankas)

  cereals

  flour

  macaroni products

   fresh fish (except for valuable breeds: bielorybitsa, Baltic and Far East salmon, sturgeons (beluga, bester,
sturgeon, sevruga, sterlet), salmon, trout (except for the sea trout), white salmon, Siberian and Chinook salmon,
kizhuch, muksun, omul, Siberian and Amour white fish, chir);

   Sea and fish products including cooled, frozen fish and other ways of processing, herring, canned food, preserves
(except for the delicacy ones: caviar of sturgeons and salmon; bielorybitsa, Baltic salmon, sturgeons - beluga,
sturgeon, sevruga, sterlet; salmon; cold smoked upper parts and carcasses of white salmon, Siberian and Chinook
salmon of slight, medium or standard salmon salting; cold smoked upper parts of Siberian, Chinook salmon and
kizhuch, cold smoked carcasses of Siberian salmon and side parts of Chinook salmon; cold smoked upper parts of
muksun, omul, Siberian and Amur lake white fish, ÷èð; preserves of fillet - slices of Baltic and Far East salmon ; meat
of crabs and sets of separate limbs of boiled-frozen crabs; langust)

  Products of children’s and diabetic diet

  Vegetables (including potatoes)
  2) the following goods for children:

   Knitted goods for new-born children, children of nursery, preschool, primary and junior school age groups: top
knitted goods, knitted underwear, hosiery, other knitted goods: gloves, mittens, head gear.

   Clothing including those made of natural sheepskin and rabbit (including products made of natural sheepskin and
rabbit with leather inserts) for new born children and children of nursery, pre-school, primary and junior school age
groups: top clothes (including dresses and suits), underwear, head gear, clothes and items for new-born children and
children of nursery group. Provisions of this paragraph do not apply to the clothing made of natural leather and natural
fur, except for natural sheepskin and rabbit (the paragraph is in the wording enforced from 1 July 2002 by the Federal
act N 57-FZ of 29 May 2002, the effect shall apply to the relationships arising from 1 January 2002, - see the previous
wording);

   Footwear (except for sport wear): bootees, preschool, school, felt boots, rubber footwear: infant, children’s, school
footwear;

  Children’s beds;

  Children’s mattresses.

  Baby carriages.

  Exercise-books;

  Toys;.

  Plasticine;

  Pencil-boxes;

  Counting sticks;

  Abacus;

  Pupil’s mark books;

  Books for painting;

  Sketch-books.

  Drawing books.

  Files for exercise-books.

  Covers for text-books, pupil’s mark-books, exercise-books.

  Digit and Letter pockets;

  Paper nappies.

  3) printed periodicals except advertising and erotic ones;

  book products connected with education, science and culture, except advertising and erotic book products (the
paragraph is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall
apply to relationships arising from 1 January 2002, - see the previous wording);

   the paragraph has lost its force since 1 January 2005 - article 3 of the Federal act N 179-FZ of 28 December 2001
(with amendments made by the Federal act N 195-FZ of 31 December 2002), - see the previous wording;

   the paragraph has lost its force since 1 January 2005 - article 3 of the Federal act N 179-FZ of 28 December 2001
(with amendments made by the Federal act N 195-FZ of 31 December 2002), - see the previous wording;
   the paragraph has lost its force since 1 January 2005 - article 3 of the Federal act N 179-FZ of 28 December 2001
(with amendments made by the Federal act N 195-FZ of 31 December 2002), - see the previous wording;

   the paragraph has lost its force since 1 January 2005 - article 3 of the Federal act N 179-FZ of 28 December 2001
(with amendments made by the Federal act N 195-FZ of 31 December 2002), - see the previous wording;

  For purposes of this subclause the printed periodical shall mean a newspaper, a magazine, an almanac, a bulletin,
another edition having permanent title, current number and coming out not less than once a year.

   For purposes of this subclause advertising printed periodicals include printed periodicals where advertisements
exceed 40% of the volume of one number thereof;
   (Subclause 3 has been added since 1 February 2002 by the Federal act No 179-FZ of 28 December 2001. The
effect of the Federal act No 179-FZ of 28 December 2001 shall apply to legal relations arising since 1 January 2002)

  4) the following medical goods of domestic and foreign production:

  medicines including medical substances, as well as those produced in drug-stores;

   medical purpose articles.
   (Subclause 4 has been added since 1 February 2002 by the Federal act No 179-FZ of 28 December 2001. The
effect of the Federal act No 179-FZ of 28 December 2001 shall apply to legal relations arising since 1 January 2002)

   Codes of types of products specified in this clause in accordance with the All-Russian classifier of products, as well
as Commodity nomenclature of foreign trade activity shall be determined by the RF Government (the paragraph is in
the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000).

   3. Taxation shall be provided at the 18% tax rate in the cases, which are not specified in clauses 1, 2 and 4 of this
article (the clause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December
2000, is in the wording enforced from 1 January 2004 by the Federal act No 117-FZ of 7 July 2003, - see the previous
wording).

   4. If pecuniary funds are obtained connected with payment for the goods (works, services) provided by article 162
of this Code, and also when obtaining of payment, partial payment for the account of future deliveries of the goods
(performance of works, rendering of services), transfer of the property rights stipulated by clauses 2-4 of article 155 of
this Code, if the tax is deducted by fiscal agents in accordance with clauses 1-3 of article 161 of this Code, if property
is sold which is acquired elsewhere and registered according to clause 3 of article 154 of this Code, if agricultural
products and products of processing thereof are sold according to clause 4 of article 154 of this Code, in case of
transfer of property rights according to clauses 2-4 of article 155 of this Code, as well as in other cases, when
according to this Code the sum of the tax must be calculated, the tax rate shall be determined as a percentage ratio of
the tax rate provided by clause 2 or clause 3 of this article to the tax base taken as 100 and increased by the certain
size of the tax rate (the subclause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 May
2002; the effect shall apply to relationships arising from 1 January 2002; is in the wording enforced from 1 January
2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous wording).

  5. Clause 5 shall be excluded from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000.

  ____________________________________________________________________
  Clauses 6 and 7 of the previous wording shall be clauses 5 and 6 of the present wording since 1 January 2001 -
Federal act No 166-FZ of 29 December 2000.
  ____________________________________________________________________

   5. In the case of importation of goods into the customs territory of the Russian Federation tax rates specified in
clauses 2 and 3 of this article shall be applied.

  6. A separate tax declaration shall be submitted to the fiscal agencies by the taxpayers for operations of sale of
goods (works, services) provided by subclauses 1-7, 9 of clause 1 of this article (the clause is supplemented from 1
January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous wording).



                   Article 165. Procedure for confirmation of the right to receive
                      A compensation in the case of taxation at the 0% tax rate
    1. In the case of selling goods provided by subclause 1 and (or) subclause 8 of clause 1 of article 164 of this Code,
in order to confirm expediency of application of 0% tax rate (or peculiarities of taxation) and tax deductions, the
following documents shall be submitted to fiscal agencies, unless otherwise provided by clauses 2 and 3 of this article
(the paragraph is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000; in
the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to
relationships arising from 1 January 2002, - see the previous wording):

   1) contract (copy of the contract) of the taxpayer with a foreign person for supply of goods (stocks) outside the
territory of the Russian Federation. If the contracts contain data of state secrecy, then instead of copies of the full text
an extract thereof shall be provided, containing information necessary for carrying out customs control (in particular,
information on terms of supply, dates, price, type of product) (the subclause has been added to from 1 July 2002 by
the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relationships arising from 1 January 2002, - see the
previous wording);

   2) extract of the bank (copy of the extract) confirming actual arrival of the proceeds from selling of the specified
goods (stocks) to the foreign person to the taxpayer’s account in the Russian bank (the paragraph is in the wording
enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000; in the wording enforced from 1
July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relationships arising from 1 January
2002; is in the wording enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous
wording).

   If the contract provides cash settlements, the taxpayer shall submit to the fiscal agencies an extract of the bank
(copy of the extract) confirming placement by the taxpayer of the received sums onto their account in the Russian
bank, as well as copies of credit cash orders confirming actual arrival of the proceeds from the foreign person - buyer
of these goods (stocks) (the paragraph is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ
of 29 December 2000; in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the
effect shall apply to relationships arising from 1 January 2002, - see the previous wording).

   If non-crediting of currency proceeds on sales of goods (works, services) on the territory of the Russian Federation
is carried out according to the procedure provided by the RF legislation on currency regulation and currency control,
the taxpayer shall submit to fiscal agencies documents (copies thereof) confirming the right to non-placement of
currency proceeds on the territory of the Russian Federation (the paragraph is in the wording enforced from 1 January
2001 by the Federal act No 166-FZ of 29 December 2000; is in the wording enforced from 31 July 2005 by the
Federal act N 90-FZ of 18 July 2005, - see the previous wording).

  In the case of foreign trade exchange (barter) operations the taxpayer shall submit to fiscal agencies documents
confirming importation of goods (performance of works, rendering of services) obtained as a result of these
operations, into the territory of the Russian Federation and crediting thereof;

   In the case of the proceeds from selling goods (stocks) to the foreign person have arrived on the account of
taxpayer from the third party, the contract of assignment on payment for the specified goods (stocks), concluded
between a foreign person and an organization (person), performed the payment alongside with an extract of bank (its
copy) shall be submitted to the fiscal agencies (the paragraph has been added from 1 January 2006 by the Federal
act N 119-FZ of 22 July 2005).

   3) customs declaration (its copy) with the marks of the Russian customs agency, which provided release of goods
under the procedure of export, and Russian customs agency in whose region the crossing point is located across
which the goods were exported outside the customs territory of the Russian Federation (hereinafter referred to as
border customs agency) (the paragraph is in the wording enforced from 1 January 2006 by the Federal act N 119-FZ
of 22 July 2005, - see the previous wording).

   When goods are exported under the customs procedure of export by pipeline transport or along the power supply
lines, the full cargo customs declaration (its copy) shall be submitted with marks of the Russian customs agency
confirming the fact of the goods’ placement under the customs procedure of export (the paragraph is in the wording
enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous wording).

   When goods are exported under the customs procedure of export across the border of the Russian Federation with
a state - member of the Customs union, where the customs control is cancelled, a customs declaration (its copy) shall
be submitted with notes of the customs agency of the Russian Federation which performed customs clearance of the
above mentioned exportation of the goods (the paragraph has been added to from 1 July 2002 by the Federal act No
57-FZ of 29 May 2002; the effect shall apply to relationships arising from 1 January 2002; is in the wording enforced
from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous wording).

   In the cases and according to the procedure determined by Russian Federation Ministry of Finances as agreed
with federal executive body authorized in area of economic development and trade, in case of exportation of certain
types of goods it is admitted to submit by the exporters of a customs declaration (its copy) with notes of the customs
agency of the Russian Federation which performed customs clearance of the exported goods and a special register of
actually exported goods with notes of the border customs agency of the Russian Federation (the paragraph has been
added to from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relationships arising
from 1 January 2002, is in the wording enforced since 2 August 2004 by the Federal act N 58-FZ on 29 June 2004; is
in the wording enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous
wording).

   In the case of exportation from the territory of the Russian Federation of stocks in accordance with the customs
procedure of transfer of stocks, a customs declaration for stocks (its copy) shall be submitted with notes of the
customs agency, in whose region of action the port (airport) open for international communication is located, on
exportation of the stocks from the customs territory of the Russian Federation (the paragraph has been added to from
1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relationships arising from 1 January
2002, - see the previous wording);

    In the case of exportation of the goods which are not origin from the territory of the Russian Federation, the
following documents shall be submitted to the fiscal agencies under the customs procedure of export on the territory
of the state-participant of the Customs union, on border with which the customs control is cancelled (the paragraph
has been added from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005):

   customs declaration (its copy) with notes of the Russian customs agency confirming the fact of the goods’
placement under a customs procedure of export (the paragraph has been added from 1 January 2006 by the Federal
act N 119-FZ of 22 July 2005);

   copy of the application for tax payment when importation of the goods on the territory of state-participant of the
Customs union, on border with which the customs control is cancelled, with a note of fiscal agencies of this state,
confirming the fact of tax payment (the paragraph has been added from 1 January 2006 by the Federal act N 119-FZ
of 22 July 2005);

  4) copies of transport, consignment and (or) other documents with notes of border customs agencies confirming
exportation of goods outside the territory of the Russian Federation. The taxpayer may submit any of the specified
documents with the account of the following peculiarities (the paragraph is in the wording enforced from 1 January
2001 by the Federal act No 166-FZ of 29 December 2000).

   In exportation of goods under the customs procedure of export by vessels via sea ports, the following documents
shall be submitted to fiscal agencies by the taxpayer to confirm exportation of the goods outside the customs territory
of the Russian Federation:

  A copy of an order for shipment of exported cargoes, specifying the port of unloading and a note “loading
permitted” made by the RF border customs house;

   A copy of the bill of lading, sea waybill or any other document confirming the fact of reception to transportation of
the exported goods, where the column “Port of unloading” specifies the place located outside the customs territory of
the Russian Federation (the paragraph is in the wording enforced from 1 January 2006 by the Federal act N 119-FZ of
22 July 2005, - see the previous wording);

   When goods are exported under the customs procedure of export across the RF border with a state - participant of
the Customs union, where the customs control is abolished, copies of transport and consignment documents shall be
submitted with notes of the RF customs agency which carried out customs clearance of the specified export of goods
(the paragraph has been added from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000).

   When goods are exported under the customs procedure of export by air transport, to confirm exportation of the
goods outside the customs territory of the Russian Federation, the taxpayer shall submit to the customs agencies a
copy of the international cargo consignment note specifying the airport of unloading located outside the customs
territory of the Russian Federation.
   Copies of transport, consignment and (or) other documents confirming exportation of goods outside the customs
territory of the Russian Federation may not be submitted, if goods are exported under the customs procedure of
export by pipeline transport or along the electric power supply lines (the paragraph has been added from 1 January
2001 by the Federal act No 166-FZ of 29 December 2000).

   If stocks are exported from the territory of the Russian Federation in accordance with the customs procedure of
stock movement, copies of transport, consignment or other documents confirming exportation of the stocks outside
the territory of the Russian Federation by air and sea vessels, vessels of mixed (river - sea) navigation (the paragraph
has been added from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relationships
arising from 1 January 2002, - see the previous wording).

   The following documents shall be submitted by taxpayers to the tax agencies in case of loading of the goods and
their customs registration when exportation of the goods under a customs procedure of export shall be carried out by
vessels outside the region of activity of the boundary customs agency, for acknowledgement of exportation of the
goods outside the customs territory of the Russian Federation (the paragraph has been added from 1 January 2006
by the Federal act N 119-FZ of 22 July 2005):

  copy of the assignment on shipment of the exported cargoes with a mark "Loading is allowed" of the Russian
customs agency making customs clearance of the specified exportation of the goods, and also with a mark of
boundary customs agency confirming exportation of the goods outside the territory of the Russian Federation (the
paragraph has been added from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005);

   copy of the bill of lading, sea waybill or any other document confirming the fact of reception to transportation of the
exported goods in which in the column "Port of unloading" the place is specified which is located outside the customs
territory of the Russian Federation (the paragraph has been added from 1 January 2006 by the Federal act N 119-FZ
of 22 July 2005).

  copies of transport and goods’ covering documents with notes of the customs agency of the Russian Federation,
confirming the fact of the goods’ placement under a customs procedure of export shall be submitted within the
customs procedure of exportation on the territory of state-participant of the Customs union, on border with which the
customs control is cancelled in case of exportation of the goods which are not origin from the territory of the Russian
Federation (the paragraph has been added from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005).

    5) in case the goods are placed under a customs procedure of the free customs zone, the contract (a copy of the
contract) with resident of a specific economic zone, payment documents on payment of the goods, a copy of the
certificate on registration of the person as a resident of the specific economic zone, given out by the federal executive
agency, authorized to perform functions for management of specific economic zones, or by its territorial agency, and
also the customs declaration with notes of the customs agency on issue of the goods in accordance with the customs
procedure of free customs zone (the subclause has been added from 1 January 2006 by the Federal act N 117-FZ; is
in the wording enforced from 1 May 2006 by the Federal act N 28-FZ of 28 February 2006, the effect shall apply to the
relationships arising from 1 January 2006, - see the previous wording).

   2. If goods provided by subclause 1 or 8 of clause 1 of article 164 of this Code are sold via a commissioner or
agent under a contract of agency or commission, the following documents shall be submitted to fiscal agencies to
confirm feasibility of application of 0% tax rate (or peculiarities of taxation) and tax deductions (the paragraph is in the
wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relationships
arising from 1 January 2002, - see the previous wording):

  1) contract of commission or agency (copies of the contracts) of the taxpayer with the commissioner or agent;

   2) contract (copy of the contract) of the person carrying out supply of goods for export or supply of stocks by the
order of the taxpayer (according to the contract of commission or agency), with the foreign person for supply of goods
(stocks) outside the territory of the Russian Federation (the paragraph is in the wording enforced from 1 July 2002 by
the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relationships arising from 1 January 2002, - see the
previous wording);

   3) extract of the bank (its copy) confirming actual arrival of the receipts from selling of the goods (stocks) to the
foreign person onto the account of the taxpayer or commissioner (agent) in the Russian bank (the paragraph is in the
wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000; in the wording enforced
from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relationships arising from 1
January 2002; is in the wording enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the
previous wording).
   If the contract provides cash settlements, extracts from the bank (its copy) confirming placement by the taxpayer or
commissioner (agent) of sums onto their account in the Russian Bank, as well as copies of cash credit slips
confirming actual arrival of the receipts from the foreign person - buyer of the goods (stocks) (the paragraph is in the
wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000; in the wording enforced
from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relationships arising from 1
January 2002, - see the previous wording).

  If non-placement of currency proceeds of sales of goods (works, services) on the territory of the Russian
Federation is provided in accordance with the procedure implied by the RF currency legislation, the taxpayer shall
submit to fiscal agencies documents (copies thereof) confirming the right to non-placement of the currency proceeds
on the territory of the Russian Federation (the paragraph is in the wording enforced from 1 January 2001 by the
Federal act No 166-FZ of 29 December 2000; is in the wording enforced from 31 July 2005 by the Federal act N 90-
FZ of 18 July 2005, - see the previous wording).

   In the case of foreign trade exchange (barter) operations the taxpayer shall submit to fiscal agencies documents
(copies thereof) confirming importation of goods (performance of works, rendering of services) obtained as a result of
these operations, into the territory of the Russian Federation and crediting thereof (the paragraph has been added to
from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relationships arising from 1
January 2002, - see the previous wording);

   In case the proceeds from selling goods (stocks) to the foreign person have arrived on the account of taxpayer
from the third party, the contract of assignment on payment for the specified goods (stocks), concluded between the
foreign person and the organization (person), performed payment alongside with an extract of bank (copy thereof)
shall be submitted to the fiscal agencies (the paragraph has been added from 1 January 2006 by the Federal act N
119-FZ of 22 July 2005).

   4) documents provided by subclauses 3-5 of clause 1 of this article (the paragraph is in the wording enforced from
1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous wording).

   3. The following documents shall be submitted to fiscal agencies in selling goods provided by subclause 1 of clause
1 of article 164 of this Code for the account of repayment of the indebtedness of the Russian Federation and former
USSR or for the account of state credits to foreign states to confirm feasibility of application of the 0% tax rate (or
taxation peculiarities) and tax deductions (the paragraph has been added to from 1 January 2001 by the Federal act
No 166-FZ of 29 December 2000):

   1) a copy of an agreement between the RF Government and the government of the respective foreign state on
regulation of the indebtedness of the former USSR (Russian Federation) or for the account of state credits to foreign
states (the subclause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December
2000);

   2) a copy of an agreement between the RF Ministry of Finance and the taxpayer on financing of supplies of goods
for the account of repayment of the state indebtedness or for the account of state credits to foreign states (the
subclause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000);

   3) an extract from the bank confirming actual arrival of the proceeds of sales of goods for export from the budget in
the currency of the Russian Federation onto the account of the taxpayer in the Russian bank (the subclause is in the
wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000);

  4) documents provided by subclauses 3 and 4 of clause 1 of this article.

  4. The following documents shall be submitted to fiscal agencies in selling works (services) provided by subclause
2 and 3 of clause 1 of article 164 of this Code to confirm feasibility of application of the 0% tax rate (or taxation
peculiarities) and tax deductions, unless otherwise provided by clause 5 of this article:

   1) a contract (copy thereof) of the taxpayer with the foreign or Russian person for performance of these works
(rendering services);

   2) an extract from the bank confirming actual arrival of the proceeds from the foreign or Russian person - buyer -
onto the account of the taxpayer in the Russian bank (the subclause is in the wording enforced from 1 January 2001
by the Federal act No 166-FZ of 29 December 2000).
   If the contract provides cash settlement, an extract from the bank shall be submitted to the fiscal agency confirming
placement of the sums obtained by the taxpayer onto his account, as well as copies of cash credit slips confirming
actual arrival of the proceeds from the foreign or Russian person - buyer of the above mentioned works (services) (the
subclause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000).

   If non-placement of currency proceeds from realization of works (services) on the territory of the Russian
Federation is provided according to the procedure implied by the RF currency legislation, the taxpayer shall submit to
the fiscal agencies documents (copies thereof) confirming the right to non-placement of currency proceeds on the
territory of the Russian Federation (the subclause is in the wording enforced from 1 January 2001 by the Federal act
No 166-FZ of 29 December 2000; is in the wording enforced from 31 July 2005 by the Federal act N 90-FZ of 18 July
2005, - see the previous wording).

   3) the customs declaration (copy thereof) with notes of the Russian customs agency which has released the goods
under the customs procedure of export and (or) import, and of the border customs agency via which the goods were
exported outside the customs territory of the Russian Federation and (or) imported into the customs territory of the
Russian Federation. The specified declaration (copy thereof) shall be submitted in case of transportation of the goods
by pipeline transport or by electric transmission lines, rendering of the services directly connected to transportation of
the goods, placed under a customs procedure of the international customs transit, with the account of specific features
provided by subclause 3 of clause 1 of this article (the subclause has been added to from 1 January 2001 by the
Federal act No 166-FZ of 29 December 2000; in the wording enforced from 1 July 2002 by the Federal act No 57-FZ
of 29 May 2002; the effect shall apply to relationships arising from 1 January 2002; is in the wording from 1 January
2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous wording).

   4) copies of transport, consignment and (or) other documents confirming exportation of goods outside the customs
territory of the Russian Federation according to subclauses 2 and 3 of clause 1 of article 164 of this Code). The
provisions of this subclause shall be applied with the account of specific features provided by subclause 4 of clause 1
of this article (the subclause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29
December 2000; in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect
shall apply to relationships arising from 1 January 2002, - see the previous wording).

  5. To prove application of tax at a rate of 0 per cent (or peculiarities of taxation) and tax deductions, railway carriers
while rendering carriage (transportation) services for the goods placed under the export customs procedure and the
goods placed under the transit customs procedure shall provide tax bodies with following documents:

   register of banking extracts to confirm actual income of proceeds from Russian or foreign person for works
performed (rendered services) to the Russian taxpayer’s account at Russian bank. In case the works (services),
specified in this Clause, are paid under the contracts concluded by Russian railway carriers with railways of foreign
states, or under international agreements of the Russian Federation, the documents, stipulated by the said contracts
(agreements), shall be submitted to tax bodies;

   register of shipping documents, being made up for international transportation of goods, with indicated names or
codes of entrance and exit frontier and (or) port railway stations, costs of works (services), dates of notes of the
customs agencies on the transportation documents testifying to placement of the goods under a customs procedure of
export or a customs procedure of the international customs transit or testifying to placement of the products of
processing exported from the customs territory of the Russian Federation under procedure of internal customs transit
(the paragraph is supplemented from 1 May 2006 by the Federal act N 28-FZ of 28 February 2006; the effect shall
apply to relationships arising from 1 January 2006, - see the previous wording).

   In case tax agency requires individual transportation documents or banking extracts, incorporated into the register,
carriers on railway transport shall submit the copies of specified documents within 30 days since the day of receipt of
an appropriate request of the tax agency. Transportation documents incorporated in the register, should have records
of customs agencies testifying about transportation of the goods, placed under a customs procedure of export or a
customs procedure of the international customs transit, or testifying about placement of the products of processing
under procedure of internal customs transit from the customs territory of the Russian Federation (the paragraph is
supplemented from 1 May 2006 by the Federal act N 28-FZ of 28 February 2006; the effect shall apply to relationships
arising from 1 January 2006, - see the previous wording).

   For rendering railway transport services, stipulated by subclause 4 of clause 1 of article 164 of this Code, to
confirm feasibility of application of the 0% tax rate (or taxation peculiarities) and tax deduction registers of uniform
transportation documents, being made up at passenger and luggage international through service, defining the route
and indicating the place of departure and place of destination, or other documents, stipulated by agreements,
concluded by Russian carriers on railway transport with railways of foreign states, or by international agreements of
the Russian Federation shall be submitted to the tax agencies.
   (The clause is in the wording enforced since 1 January 2006 by the Federal act N 119-FZ on 22 July 2005, - See
the previous wording).

   6. The following documents shall be submitted to fiscal agencies in rendering services provided by subclause 4 of
clause 1 of article 164 of this Code to confirm feasibility of application of the 0% tax rate (or taxation peculiarities) and
tax deduction unless otherwise stipulated by Clause 5 of this Articles (the paragraph is in the wording enforced since 1
January 2005 by the Federal act N 122-FZ on 22 August 2004, - see the previous wording):

   1) an extract of the bank (copy thereof) confirming actual arrival of the proceeds from the Russian or foreign person
for the rendered services onto the account of the Russian taxpayer in the Russian bank with the account of
peculiarities provided by subclause 2 of clause 1 and subclause 3 of clause 2 of this article (the subclause is in the
wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000; added to from 1 July
2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relationships arising from 1 January 2002,
- see the previous wording);

   2) register of uniform international transportation documents for transporting passengers and baggage, determining
the route of transportation, specifying the points of departure and destination (the subclause is in the wording enforced
from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000).

  7. The following documents shall be submitted to the fiscal agency in selling works (services) provided by
subclause 5 of clause 1 of article 164 of this Code to confirm feasibility of application of the 0% tax rate (or taxation
peculiarities) and tax deductions:

   1) contract (copy of the contract) of the taxpayer with foreign or Russian persons for performance of works
(rendering services) (the subclause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of
29 December 2000);

   2) an extract of the bank (copy thereof) confirming actual arrival of the proceeds from the Russian or foreign person
for the performed works (rendered services) onto the account of the taxpayer in the Russian bank with the account of
peculiarities provided by subclause 2 of clause 1 and subclause 3 of clause 2 of this article (the subclause is in the
wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000; added to from 1 July
2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relationships arising from 1 January 2002,
- see the previous wording);

   3) deeds and other documents (copies thereof) confirming performance of works (rendering of services) directly in
the cosmic space, as well as performance of works (rendering of services) technologically provided and closely
connected with performance of works directly in the cosmic space (an extract of the bank (copy thereof) confirming
actual arrival of the proceeds from the Russian or foreign person for the rendered services onto the account of the
Russian taxpayer in the Russian bank with the account of peculiarities provided by subclause 2 of clause 1 and
subclause 3 of clause 2 of this article (the subclause has been added to from 1 July 2002 by the Federal act No 57-FZ
of 29 May 2002; the effect shall apply to relationships arising from 1 January 2002, - see the previous wording).

   8. The following documents shall be submitted to fiscal agencies in selling goods provided by subclause 6 of clause
1 of article 164 of this Code to confirm feasibility of application of the 0% tax rate (or taxation peculiarities) and tax
deductions:

   1) contract (copy thereof) for selling precious metals or precious stones (the subclause is in the wording enforced
from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000);

   2) documents (copies thereof) confirming transfer of precious metals or precious stones to the RF State fund of
precious metals and precious stones, the RF Central Bank, banks (the subclause is in the wording enforced from 1
January 2001 by the Federal act No 166-FZ of 29 December 2000; added to from 1 July 2002 by the Federal act No
57-FZ of 29 May 2002; the effect shall apply to relationships arising from 1 January 2002, - see the previous wording);

   9. Documents (copies thereof) specified in clauses 1-4 of this article shall be submitted by taxpayers to confirm
feasibility of application of the 0% tax rate in selling goods (works, services) specified in subclauses 1-3 and 8 of
clause 1 of article 164 of this Code within 180 days following the date of goods’ placement under the customs
procedure of export, international customs transit, free customs zone, movement of stocks. The specified order shall
not be applied to the taxpayers, who does not submit the tax declarations to the fiscal agencies in accordance with
clause 4 of this article (the paragraph is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of
29 December 2000; in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect
shall apply to relationships arising from 1 January 2002; is in the wording enforced since 1 January 2005 by the
Federal act N 122-FZ on 22 August 2004; is supplemented from 1 January 2006 by the Federal act N 117-FZ on 22
July 2005; is in the wording enforced from 1 January 2006 by the Federal act N 119-FZ on 22 July 2005; is in the
wording enforced from 1 May 2006 by the Federal act N 28-FZ of 28 February 2006, the effect shall apply to the
relationships arising from 1 January 2006, - see the previous wording).

   If upon expiration of 180 calendar days following the date of release of the goods by customs agencies under the
customs procedure of export, free customs zone, international customs transit, movement of stocks, the taxpayer has
not submitted the specified documents (copies thereof), these operations of selling goods (performance of works,
rendering services) shall be subject to taxation at the rates provided by causes 2 and 3 of article 164 of this Code. If
the taxpayer submits the documents (copies thereof) explaining application of the 0% tax rate to the fiscal agencies,
the sums of the tax paid shall be returned to the taxpayer according to the procedure and on terms provided by article
176 of this Code (the subclause has been added to from 1 January 2001 by the Federal act No 166-FZ of 29
December 2000; in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect
shall apply to relationships arising from 1 January 2002, is supplemented from 1 January 2006 by the Federal act N
117-FZ on 22 July 2005; is in the wording enforced from 1 January 2006 by the Federal act N 119-FZ on 22 July
2005, - see the previous wording).

   Taxpayers shall submit the documents, specified in clause 5 of this article to substantiate application of tax at a
rate of 0 per cent when performance of works (rendering of services) stipulated by subclauses 3 and 9 of clause 1 of
article 164 of this Code within 180 days at the latest since the later record of tax agencies on transportation
documents testifying to placement of the goods under a customs procedure of export or transit international customs
procedure. If on expiration of 180 days, a taxpayer has not submitted the documents, specified in clause 5 of this
article, transactions for realization of works (services) are subject to taxation at a rate of 18 per cent. If a taxpayer
further provided tax agencies with the documents in confirmation of application of tax at a rate of 0 per cent, tax
amounts paid are subject to return to a taxpayer in the procedure and under conditions, stipulated by article 176 of
this Code (the paragraph is in the wording enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July
2005; is supplemented from 1 January 2006 by the Federal act N 28-FZ of 28 February 2006, the effect shall apply to
relationships arising from 1 January 2006, - see the previous wording).

  Provisions of this clause shall not apply to the taxpayers exempted from performance of taxpayer’s duties
according to article 145 of this Code.

   9_1. In case of reorganization of the organization the assignee (assignees) shall submit to the tax agency at a
place of tax registration the documents, including with requisites of the reorganized (being reorganized) organization
provided by this article with respect to the operations on realization specified in clause 1 of article 164 of this Code of
the goods (works, services) which have been carried out by the reorganized (being reorganized) organization if at the
moment of completion åðó reorganization the right to apply of the 0% tax rate on such operations is not confirmed (the
clause has been added since 1 September 2005 by the Federal act N 118-FZ of 22 July 2005; the effect shall apply to
legal relationships arising from 1 January 2005).

   10. The documents specified in this article shall be submitted by the taxpayers to substantiate application of the 0%
tax rate along with submission of the tax declaration. Procedure for determination of the tax amount concerning to the
goods (works, services), the property rights got for manufacture and (or) selling the goods (works, services),
operations on which realization are implied under the 0% tax rate, shall be established with the registration policy
adopted by taxpayer for the purposes of taxation (the paragraph is supplemented from 1 January 2006 by the Federal
act N 119-FZ of 22 July 2005, - see the previous wording).

   11. The procedure for confirmation of the right to obtain sums of the tax with application of the 0% tax rate referring
to goods moved across the RF border without customs control and customs clearance shall be determined by the RF
Government (the subclause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29
December 2000).

   12. Procedure for application of the 0% tax rate established by international contracts of the Russian Federation,
when selling goods (works, services) for official use by the international organizations and their representations
effecting activity within the territory of the Russian Federation shall be determined by the Government of the Russian
Federation (the paragraph has been added from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005).

   13. When selling the goods stipulated by subclause 10 of clause 1 of article 164 of this Code, for confirmation of
the feasibility for application of the 0% tax rate and tax deductions to the tax agencies the following documents shall
be submitted:
   1) contract (copy thereof) on selling a vessel, made by the taxpayer with the customer and containing a provision
on obligatory registration of the constructed vessel in the Russian international register of vessels within 45 days from
the moment of transfer the property right to a vessel from the taxpayer to the customer;

  2) an extract from the register of the constructing vessels with the indication, that upon termination of the
construction, a vessel is subject to registration in the Russian international register of vessels;

  3) documents confirming the fact of transfer the property right to a vessel from the taxpayer to the customer;

  4) documents confirming capacity of the main engines and capacity of a vessel.
  (Clause 13 has been added since 23 January 2006 by the Federal act N 168-FZ of 20 December 2005)




                            Article 166. Procedure for calculation of the tax
   1. In determining the tax base in accordance with articles 154 - 159 and 162 of this Code, the sum of the tax shall
be calculated as an interest share of the tax base, corresponding to the tax rate, and in case of separate accounting -
as the sum of the tax drawn as a result of addition of sums of taxes calculated separately as interest shares of the
respective tax bases, corresponding to the tax rates.

  2. Total amount of the tax in realization of goods (works, services) shall represent a sum obtained as a result of
addition of sums of the tax calculated in accordance with the procedure established by clause 1 of this article.

   3. The total sum of the tax shall not be calculated by taxpayers - foreign institutions that are not registered in tax
agencies as taxpayers. The amount of the tax in this case shall be calculated by fiscal agencies separately for each
operation of realization of goods (works, services) on the territory of the Russian Federation, in accordance with the
procedure established by clause 1 of this article (the clause is in the wording enforced since 1 January 2001 by the
Federal law N 166-FZ from 29 December 2000).

   4.The total amount of the tax shall be calculated according to the results of each tax period with reference to all
operations recognized as subject of taxation in accordance with subclauses 1-3 of clause 1 of article 146 of present
Code, for which the moment of determination the tax base established by article 167 refers to a certain tax period,
taking into account all amendments which decrease or increase the tax base in this tax period (the clause is in
wording enforced since 1 January 2001 by the Federal law N 166-FZ from 29 December 2000; is in the wording
enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous wording).

   5. When importing goods into the customs territory of the Russian Federation, the total sum of the tax shall be
calculated as the interest share of the tax base corresponding to the tax rate, calculated in accordance with article 160
of this Code.

   If in accordance with the requirements established by clause 3 of article 160 of this Code the tax base is
determined separately for each group of imported goods, then for each of the mentioned tax bases the amount of the
tax shall be calculated separately, in accordance with the procedure established by paragraph one of this clause. The
total amount of the tax shall be calculated as the sum obtained as a result of addition of sums of the tax calculated
separately for each of these tax bases (the paragraph is in the wording enforced from 1 July 2002 by the Federal act
N 57-FZ of 29 May 2002, the effect shall apply to legal relationships arising from 1 January 2002, - see the previous
wording).

   6. The amount of the tax on operations of realization of goods (works, services) taxed in accordance with clause 1
of article 164 of this Code at the rate of 0%, shall be calculated separately for each of these operations in accordance
with the procedure established by clause 1 of this article.

   7. In the absence of book-keeping or accounting of objects of taxation of a taxpayer, fiscal agencies shall have the
right to calculate amounts of the tax to be paid on the bases of the data on other similar taxpayers.



                         Article 167. Moment of determining the taxable base
                 (title of the article is in the wording enforced from 1 January 2006 by the Federal act
                                 N 119-FZ of 22 July 2005, - see the previous wording)

   1. For purposes of this chapter the moment of determining the taxable base, unless otherwise provided by clauses
3, 7-11, 13-15 of this article shall be the earliest of the following dates:

  1) day of shipping (transfer) of the goods (works, services), property rights;

   2) day of payment, partial payment for the account the future deliveries of the goods (performance of works,
rendering of services), transfer of the property rights.
   (The clause is in the wording enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005. - See the
previous wording).

  2. The clause has lost its force since 1 January 2006 - Federal act N 119-FZ of 22 July 2005. - See the previous
wording.

   3. If the goods are not shipped or transported but transfer of the right of ownership for these goods takes place, this
transfer of the right of ownership for purposes of this chapter shall be equaled to shipping thereof (the clause is in the
wording enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous wording).

  4. The clause has lost its force since 1 January 2006 - Federal act N 119-FZ of 22 July 2005. - See the previous
wording.

  5. The clause has lost its force since 1 January 2006 - Federal act N 119-FZ of 22 July 2005. - See the previous
wording.

  6. The clause has lost its force since 1 January 2006 - Federal act N 119-FZ of 22 July 2005. - See the previous
wording.

  7. If taxpayers sell goods transferred thereto for storage under a contract of warehouse storage with issuance of a
warehouse storage certificate, the moment of determination of taxable base for the specified goods shall be
determined as the date of realization of the warehouse storage certificate (the clause is in the wording enforced from 1
January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous wording).

   8. When transfer of the property rights in the case stipulated by clause 2 of article 155 of this Code, the moment for
determining the taxable base shall be determined as the day of concession of the pecuniary claim or the day of
termination of the corresponding obligation, in the cases stipulated by clauses 3 and 4 of article 155 of this Code, - as
the day of concession (the subsequent concession) of the claim or the day of performance by the debtor of this claim,
and in the case stipulated by clause 5 of article 155 of this Code, - as the day of transfer of the property rights (the
clause is in the wording enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the
previous wording).

   9. In the event of selling goods (works, services) provided by subclause 1-3, 8 and 9 of clause 1 of article 164 of
this Code, the moment of determining the taxable base for the above mentioned goods (works, services) shall be the
last day of the month where the complete portfolio of documents was collected, provided by article 165 of this Code
(the clause is in the wording enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the
previous wording).

   If the complete portfolio of the documents provided by article 165 of this Code is not collected on the 181-th
calendar day following the date of placement of goods under the customs procedures of export, international customs
transit, free customs zone, movement of stocks, the moment of determining the taxable base for the above mentioned
goods (works, services) shall be determined according to subclause 1 of clause 1 of this article, unless otherwise
stipulated by this Clause. In case a full packet of documents, stipulated by Clause 5 of Article 165 of this Code, has
not been completed to 181(st) calendar day since the day of later tax bodies’ record on transportation documents
testifying about placement of goods under the customs procedure of export or the customs procedure of international
customs transit or testifying about placement of the exported from the RF territory products of processing under
procedure of internal customs transit, the moment of definition of the taxable basis for works and services aforesaid
shall be determined according to Subclause 1 of Clause 1 of this Article.

   In case of reorganization of the organization if 181-st day coincides with the date of completion of reorganization or
comes after the specified date, the moment for determining the taxable base shall be determined by the assignee
(assignees) as the date of completion of the reorganization (date of the state registration for each again created
organization, and in case of reorganization in the form of joining - the date of entering a record about termination of
activity of each joined organization into the unified state register of legal entities (the paragraph has been added since
1 January 2005 by the Federal act N 122-FZ on 22 August 2004; is supplemented from 1 September 2005 by the
Federal act N 118-FZ of 22 July 2005, the effect shall apply to legal relationships arising from 1 January 2005; is in
the wording enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005; is in the wording enforced
from 1 May 2006 by the Federal act N 28-FZ of 28 February 2006, the effect shall apply to legal relationships arising
from 1 January 2006, - see the previous wording).
   (The clause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect
shall apply to relationships arising from 1 January 2002, - see the previous wording).

   9_1. The day of entering of the corresponding record into the specified register is the moment for determining the
taxable base by the tax agent when exception of a vessel of the Russian international register of vessels.

  In case of within 45 days from the moment of transfer of the property right to a vessel registration of a vessel in the
Russian international register of vessels is not carried out from the taxpayer to the customer, the moment for
determining the taxable base shall be determined by the tax agent according to subclause 1 of clause 1 of this article.
  (The clause has been added from 23 January 2006 by the Federal act N 168-FZ of 20 December 2005).

   10. For purposes of this chapter the date the moment for determining the taxable base in case of performance of
construction and erection works for personal consumption is the last day of the month of each tax period (the clause is
in the wording enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous
wording).

   11. For purposes of this chapter the date for determining the taxable base in case of transfer of goods
(performance of works, rendering of services) for personal needs, considered the object of taxation according to this
chapter shall be determined as the date of the above transfer of the goods (performance of works, rendering of
services) (the clause is in the wording enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, -
see the previous wording).

   12. For purposes of taxation the accounting policy adopted by the organization shall be approved by certain orders,
directions of the manager of the organization.

   The accounting policy for the purposes of taxation shall be applied since 1 January following the year of approval
thereof by certain order, direction of the manager of the organization.

   The accounting policy for the purposes of taxation shall be obligatory for all the independent subdivisions of the
organization.

   The accounting policy for the purposes of taxation adopted by a newly created organization shall be approved not
later than termination of the first tax period. The accounting policy for the purposes of taxation adopted by a newly
created organization shall be considered applicable since the date of creation of the organization.

  The clause has lost its force from 1 January 2006 - Federal act N 119-FZ of 22 July 2005. - See the previous
wording.

  The clause has lost its force from 1 January 2006 - Federal act N 119-FZ of 22 July 2005. - See the previous
wording.

   13. In case of reception by the taxpayer - manufacturer of the goods (works, services) of the payment, partial
payment for the account the future deliveries of goods (performance of works, rendering of services), duration of
which production cycle of manufacturing makes over six months (under the list determined by the Government of the
Russian Federation), the taxpayer - manufacturer of the specified goods (works, services) has the right to determine
the moment for determining the taxable base as the day of shipment (transfer) of the specified goods (performance of
works, rendering of services) in the presence of the separate accounting of the performed operations and the tax
amounts on the got goods (works, services), including on fixed assets and non-material assets, the property rights
used for realization of operations on manufacture of goods (works, services) of a long production cycle and other
operations.

   When reception of payment, partial payment by the taxpayer - manufacturer of goods (works, services) a contract
with the buyer (a copy thereof certified by signature of the head and chief accountant) shall be submitted to the tax
agencies simultaneously with the tax declaration, and also the document confirming duration of a production cycle of
goods (works, services), with the indication of their name, term of manufacturing, name of the organization -
manufacturer, given to the specified taxpayer - manufacturer by the federal executive body effecting the functions on
elaboration of a state policy and normative-legal regulation in the sphere of industrial, defense-industrial and fuel-
energy complexes, signed by the authorized person and certified with a seal of this body.
   (The clause has been added from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005).

   14. In case the moment for determining the taxable base is the day of payment, partial payment of the future
deliveries of goods (performance of works, rendering of services) or the day of transfer of the property rights, than on
the date of shipment of the goods (performance of works, rendering of services) or on the date of transfer of the
property rights for the account of the earlier arrived payment, partial payment also there is a moment of definition of
tax base (the clause has been added from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005).

   15. For the tax agents specified in clauses 4 and 5 of article 161 of this Code, the moment for determining the
taxable base shall be determined in the procedure established by clause 1 of this article (the clause has been added
from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005).




                     Article 168. Amount of tax presented to a buyer by a seller
   1. When selling goods (works, services), transfer of the property rights a taxpayer (tax agent specified in clauses 4
and 5 of article 161 of this Code) shall be obliged to present for payment to a buyer an appropriate sum of the tax in
addition to the price (tariff) of sold goods (works, services), transferred property rights (the clause is supplemented
from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous wording).

   2. The amount of the tax presented by a taxpayer to a buyer of goods (works, services), property rights shall be
calculated for each type of these goods (works, services) as the interest share of the prices (tariffs) stated in clause 1
of this article, corresponding to the tax rate (the clause is supplemented from 1 January 2006 by the Federal act N
119-FZ of 22 July 2005, - see the previous wording).

   3. When selling goods (works, services), transfer of property rights appropriate invoices are making out not later
than 5 days from the date of shipment of the goods (performance of works, rendering of services) or from the date of
transfer of the property rights (the clause is in wording enforced since 1 January 2001 by the Federal law N 166-FZ
from 29 December 2000; is supplemented from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see
the previous wording).

   4. In settlement documents, including registers of checks and registers for obtaining funds from letters of credit,
basic accounting documents and invoices the corresponding sum of the tax shall be presented as a separate line.
   ____________________________________________________________________
   Amendments shall be introduced into the clause 4 of this article since 1 January 2007 by the Federal act N 119-FZ
of 22 July 2005.
   ____________________________________________________________________

   5. When selling goods (works, services) for which operations on realization thereof are not subject to taxation (are
exempted from taxation) and when exempting a taxpayer from performance of obligations of a taxpayer in accordance
with article 145 of this Code, settlement documents, basic accounting documents shall be executed and invoices shall
be made out without allocating corresponding amounts of the tax. A certain inscription or a stamp "Without tax (VAT)"
shall be made on the above documents (the clause is in wording enforced since 1 July 2002 by the Federal act N 57-
FZ of 29 May 2002, the effect shall apply to relationships arising from 1 January 2002, - see the previous wording).

   6. When selling goods (works, services) to population at retail prices (tariffs), an appropriate amount of the tax shall
be included in the above prices (tariffs). On labels of goods and price labels put out by sellers, as well as receipts and
other documents given to buyers the sum of the tax shall not be specified.

   7. When selling goods for cash by organizations (enterprises) and sole traders of retail trade and public catering,
and also other organizations, sole traders carrying out works and rendering paid services directly to the population,
claims established by clauses 3 and 4 of this article for execution of settlement documents and making out of invoices
shall be considered met, if a seller has given a buyer a receipt or another document of the established form (the
clause is in wording enforced since 1 January 2001 by the Federal law N 166-FZ from 29 December 2000, has been
added since 1 July 2002 by the Federal act N 57-FZ of 29 May 2002, the effect shall apply to relationships arising
from 1 January 2002, - see the previous wording).
                                                  Article 169. Invoice
   1. An invoice is a document being the basis for acceptance by the buyer of the presented goods (works, services),
property rights (including commission agent, agent who sell the goods (works, services), property rights on their own
behalf by the seller, amounts of the tax for deduction or repayment in accordance with the procedure provided by this
chapter (the clause is in the wording enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see
the previous wording).

   2. Invoices made up and made out with violation of the procedure established by clauses 5 and 6 of this article may
not be the basis for acceptance of amounts of the tax presented to a buyer for deduction or repayment. non-
performance of requirements to invoices that are not provided by clauses 5 and 6 of this article may not be the
grounds for refusal to accept for deduction of sums of the tax presented by a seller.

  3. A taxpayer shall be obliged to make up an invoice, keep registers of received and made out invoices, purchase
books and sales books, unless otherwise provided by clause 4 of this article:

  1) when performing operations being an object of taxation in accordance with this chapter, including those that are
not subject to taxation (are exempted from taxation) in accordance with article 149 of this Code;

   2) in other cases established in accordance with the established procedure.

   4. Invoices shall not be made out by taxpayers for operations of selling securities (except broker and intermediary
services), as well as banks, insurance organizations and non-governmental pension funds for operations which are
not subject to taxation (are exempted from taxation) in accordance with article 149 of this Code (the clause is in
wording enforced since 1 January 2001 by the Federal law N 166-FZ from 29 December 2000).

   5. An invoice should contain:

   1) serial number and the date the invoice was made out;

   2) name, address and identification numbers of taxpayer and buyer;

   3) name and address of the consignor and consignee;

  4) number of payment -settlement document in case of receiving advance or other payments for account of future
supplies of goods (performance of works, rendering of services);

  5) name of goods to be supplied (shipped) (description of works performed, services rendered) and the unit of
measurement (in possibility of it’s indication) (the clause is supplemented since 1 July 2002 by the Federal act N 57-
FZ of 29 May 2002, the effect shall apply to the relationships arising from 1 January 2002, - see the previous
wording);

   6) amount (volume) of goods (works, services) supplied (shipped) according to the invoice, basing on the units of
measurement adopted thereon (in possibility of it’s indication) (the clause is supplemented since 1 July 2002 by the
Federal act N 57-FZ of 29 May 2002, the effect shall apply to the relationships arising from 1 January 2002, - see the
previous wording);

   7) price (tariff) per unit of measurement (in possibility of it’s indication) under contract without the tax, and in case of
application of government regulated prices (tariffs) which include the tax - with the tax (the clause is supplemented
since 1 July 2002 by the Federal act N 57-FZ of 29 May 2002, the effect shall apply to the relationships arising from 1
January 2002, - see the previous wording);

   8) cost of goods (works, services), property rights for all the amount of goods supplied (shipped) (works performed,
services rendered), transferred property rights according to the invoice without the tax (the subclause is supplemented
from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous wording);

   9) the amount of excise duty for goods liable to excise duty;

   10) tax rate;
  11) amount of the tax presented to a buyer of goods (works, services), property rights determined basing on
applied tax rates (the subclause is supplemented from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, -
see the previous wording);


   12) cost of the whole amount of goods supplied (shipped) (works performed, services rendered), transferred
property rights according to the invoice including the tax (the subclause is supplemented from 1 January 2006 by the
Federal act N 119-FZ of 22 July 2005, - see the previous wording);

  13) the subclause is excluded since 1 January 2001 by the Federal law N 166-FZ from 29 December 2000;
  ____________________________________________________________________
  The subclauses 14 and 15 of the previous wording are the subclauses 13 and 14 of the present wording since 1
January 2001 - the Federal act N 166-FZ of 29 December 2000.
  ____________________________________________________________________

  13) country of origin for goods;

  14) number of the customs declaration (the subclause is in the wording enforced from 1 January 2006 by the
Federal act N 119-FZ of 22 July 2005, - see the previous wording).

   Information provided by subclauses 13 and 14 of this clause shall be given with respect to goods for which the
country of origin is the Russian Federation. A taxpayer selling the above goods shall bear responsibility only for
compliance of the above information in invoices presented by them to information contained in invoices and shipment
documents received by him (the paragraph is in wording enforced since 1 January 2001 by the Federal law N 166-FZ
from 29 December 2000).

   6. An invoice shall be signed by the manager and the chief accountant of the organization, or another persons
authorized with the order (or another administrative document) for organization or proxy from the name of
organization. If an invoice is made out by a sole proprietor, the invoice shall be signed by the sole proprietor,
specifying requisites of the certificate of the state registration of this sole proprietor (the clause is supplemented since
1 July 2002 by the Federal act N 57-FZ of 29 May 2002, the effect shall apply to the relationships arising from 1
January 2002, - see the previous wording).

  7. In case, if with conditions of transaction the obligation is expressed in a foreign currency, amounts specified in
an invoice may be expressed in foreign currency (the clause is in wording enforced since 1 January 2001 by the
Federal law N 166-FZ from 29 December 2000).

   8. The procedure for keeping a book of received and made out invoices, purchase and sale books shall be
established by the RF Government.




           Article 170. Procedure for referring sums of the tax to costs of production
                              and sale of goods (works, services)
   1. Unless otherwise established by the provisions of this chapter, sums of the tax for the taxpayer to pay when
acquiring goods (works, services), property rights or actually paid by them in the case of importation of goods into the
customs territory of the Russian Federation shall not include costs to be deducted when calculating the tax of profit of
organizations clause is in the wording enforced from 1 January 2002 by the Federal act No 110-FZ of 6 August 2002;
is supplemented from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous wording).

   2. Sums of the tax for the taxpayer to pay when acquiring goods (works, services), including fixed assets and
intangible assets, or actually paid in the case of importation of the fixed assets and intangible assets into the territory
of the Russian Federation shall be accounted in the cost of these goods (works, services), including fixed assets and
intangible assets in the following cases:

   1) acquisition (importation) of goods (works, services) including fixed assets and intangible assets, used for
operations of production and (or) sale (as well as transfer, performance, rendering for internal needs) of goods (works,
services) which are not subject to taxation (exempted from taxation);
   2) acquisition (importation) of goods (works, services) including fixed assets and intangible assets, used for
operations of production and (or) sale of goods (works, services), for which the Russian Federation is not considered
the place of sale;

   3) acquisition (importation) of goods (works, services) including fixed assets and intangible assets by persons who
are not taxpayers on the added cost, or exempted from performance of taxpayer’s duties concerning calculation and
payment of the tax (the subclause is in the wording enforced from 1 January 2006 by the Federal act N 119-FZ of 22
July 2005, - see the previous wording);

   4) acquisition (importation) of goods (works, services) including fixed assets and intangible assets, property rights
for production and (or) sale (transfer) of goods (works, services), when operations of sale (transfer) thereof are not
considered sale of goods (works, services) according to clause 2 of article 146 of this Code unless otherwise
stipulated by the present chapter (the subclause is in the wording enforced from 1 January 2006 by the Federal act N
119-FZ of 22 July 2005, - see the previous wording).
   (The clause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect
shall apply to relationships arising from 1 January 2002, - see the previous wording).

   3. If the taxpayer accepts the sums of the tax for deduction of goods (works, services) including fixed assets and
intangible assets, property rights according to the procedure provided by this chapter, the respective sums of the tax
shall be restored by the taxpayer in the following cases:

  1) transfer of the property, intangible assets and property rights as a contribution in the authorized capital of
economic societies and companies or shares in share funds of cooperative societies.

   The sums of the tax in the size earlier accepted for deduction are subject to restoration, and with respect to the
fixed assets and intangible assets - at a rate of the sum proportional to residual (balance) cost without taking into
account of reassessment.

   The sums of the tax subject to restoration according to this subclause shall not be included into cost of property,
intangible assets and property rights and are subject to tax deduction at the accepting organization in the procedure
established by this chapter. Thus the sum of the restored tax is underlined in the documents which transfer of the
specified property, intangible assets and property rights are specified;

   2) further usage of such goods (works, services), including the fixed assets both intangible assets and property
rights for realization of the operations specified in clause 2 of this article, except for the operation stipulated by
subclause 1 of this clause, and also transfer of the fixed assets, intangible assets and (or) other property, property
rights to the assignee (assignees) in case of reorganization of legal entities (the paragraph is in the wording enforced
from 1 May 2006 by the Federal act N 28-FZ of 28 February 2006, the effect shall apply to relationships arising from 1
January 2006, - see the previous wording).

   Sums of the tax in the size earlier accepted for deduction are subject to restoration, and concerning the fixed
assets and intangible assets - at a rate of the sum proportional to residual (balance) cost without taking into account
reassessment.

   Sums of the tax subject to restoration according to this subclause shall not be included into cost of the specified
goods (works, services), including the fixed assets and intangible assets, property rights, and shall be registered in
structure of the other expenses according to article 264 of this Code.

   Restoration of the sums of the tax shall be made in that tax period in which the goods (works, services), including
fixed assets both intangible assets and property rights have been transferred or begin to be used by taxpayer for
performance of the operations specified in clause 2 of this article.

   In case of transition of the taxpayer to special tax modes according to chapters 26_2 and 26_3 of this Code the
sums of the tax, accepted for deduction by the taxpayer for goods (works, services), including for fixed assets both
intangible assets, and property rights in the procedure stipulated by this chapter are subject to restoration within the
tax period previous to transition to the specified modes.

   Provisions of this clause shall not be applied concerning the taxpayers passing to a special tax mode according to
chapter 26_1 of this Code.
   (The clause is in the wording enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005. - See the
previous wording).
   4. Sums of the tax presented by sellers of goods (works, services), property rights to taxpayers performing both
taxable and non-taxed operations (the paragraph is supplemented from 1 January 2006 by the Federal act N 119-FZ
of 22 July 2005, - see the previous wording):

   Shall be accounted in the cost of these goods (works, services), property rights according to clause 2 of this article
- for goods (works, services), including fixed assets and intangible assets, property rights used for performance of
operations which are not taxed by means of the value-added tax (the paragraph is supplemented from 1 January 2006
by the Federal act N 119-FZ of 22 July 2005, - see the previous wording);

   Shall be accepted for deduction according to article 172 of this Code - for goods (works, services), including fixed
assets and intangible assets, property rights used for performance of operations taxed by means of the value-added
tax (the paragraph is supplemented from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the
previous wording);

   Shall be accepted for deduction or shall be accounted in the proportion in which they are used for production and
(or) sale of goods (works, services), property rights for which sales operations are subject to taxation (exempted from
taxation) - for goods (works, services), including fixed assets and intangible assets, property rights used for
performance of both taxable and non-taxed (exempted from taxation) operations in the procedure established by the
accounting policy accepted by taxpayer for taxation purposes (the paragraph is supplemented from 1 January 2006 by
the Federal act N 119-FZ of 22 July 2005, - see the previous wording).

   The above mentioned proportion is determined basing on the cost of shipped goods (works, services), property
rights which sales operations are subject to taxation (exempted from taxation) in the total cost of goods (works,
services) shipped for the tax period (the paragraph is supplemented from 1 January 2006 by the Federal act N 119-FZ
of 22 July 2005, - see the previous wording).

   Similar procedure is applied for separate accounting by the taxpayers of sums of the tax transferred to payment of
the uniform tax on imputed income for certain types of activities.

   The taxpayer must carry out separate accounting of the sums of the tax on acquired goods (works, services),
including fixed assets and intangible assets, property rights used for both taxable and non-taxed (exempted from
taxation) operations (the paragraph is supplemented from 1 January 2006 by the Federal act N 119-FZ of 22 July
2005, - see the previous wording).

   If the taxpayer does not provide separate accounting, the sum of the tax on acquired goods (works, services),
including fixed assets and intangible assets, property rights shall not be deducted and shall not be included in the
costs to be deducted in calculation of the tax on profit of organizations (tax on income of natural persons) (the
paragraph is supplemented from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous
wording).

   The taxpayer shall have the right not to apply provisions of this clause to the tax periods where the share of the
aggregate costs of production of good (works, services), property rights which sales operations are not subject to
taxation, does not exceed 5% of the total value of the aggregate production costs. All the tax sums presented to
taxpayers by sellers of the goods (works, services), property rights used in production in the specified tax period shall
be subject to deduction according to the procedure provided by article 172 of this Code (the paragraph is
supplemented from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous wording).
   (The clause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect
shall apply to relationships arising from 1 January 2002, - see the previous wording).

   5. Banks, insurance organizations, non-governmental pension funds have the right to include in costs to be
deducted in calculation of the tax on profit of organizations the sums of the tax paid to suppliers on acquired goods
(works, services). The sum of the tax received by them on taxable operations shall be paid to the budget (the clause is
in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000; in the wording
enforced from 1 January 2002 by the Federal act No 110-FZ of 6 August 2002; the effect shall apply to relationships
arising from 1 January 2002, - see the previous wording).

  6. The clause has been excluded from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall
apply to relationships arising from 1 January 2002. - See the previous wording.



                                          Article 171. Tax deductions
   1. The taxpayer shall have the right to reduce the total sum of the tax calculated in accordance with article 166 of
this Code by tax deductions established by this article.

   2. Deductions shall apply to the sums of the tax presented to the taxpayer in acquiring goods (work, services) and
also property rights on the territory of the Russian Federation or paid by the taxpayer in importation of goods into the
customs territory of the Russian Federation under the customs procedures of release for internal consumption,
temporary importation and processing outside the customs territory referring to or in case of importation of the goods
moved through the customs border of the Russian Federation without customs control and customs registration (the
paragraph is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000; is in
the wording enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous wording):

   1) good (works, services) and also property rights acquired for performance of operations considered to be the
object of taxation in accordance with this chapter, except goods provided by clause 2 of article 170 of this Code (the
subclause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000; in the
wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relationships
arising from 1 January 2002; is supplemented from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, -
see the previous wording);

  2) goods (works, services) acquired for reselling.

  The paragraph has been excluded from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000.

  3. deductions shall apply to sums of the tax paid according to article 173 of this Code by buyers - fiscal agents (the
paragraph is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000).

    The right to the above mentioned tax deductions shall belong to buyers - fiscal agents registered in fiscal agencies
and performing duties of taxpayers in accordance with this chapter. Fiscal agents carrying out operations specified in
clauses 4 and 5 of article 161 of this Code shall not have the right to include the sums of the tax on these operations
in tax deductions (the paragraph is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29
December 2000; added to from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to
relationships arising from 1 January 2002; is in the wording enforced from 1 January 2006 by the Federal act N 119-
FZ of 22 July 2005, - see the previous wording).

   Provisions of this clause shall apply, provided the goods (works, services) have been acquired by the taxpayer
being a fiscal agent for purposes specified in clause 2 of this article, the tax from the taxpayer’s incomes having been
deducted and paid in acquisition thereof (the paragraph is in the wording enforced from 1 January 2001 by the
Federal act No 166-FZ of 29 December 2000).

   4. Deduction shall apply to sums of the tax presented by sellers to the taxpayer - a foreign person, who has not
been registered in fiscal agencies of the Russian Federation, in acquisition by this taxpayer of goods (works,
services), property rights or paid by them in importation of the goods into the customs territory of the Russian
Federation for production purposes or carrying out other activities (the paragraph is in the wording enforced from 1
January 2001 by the Federal act No 166-FZ of 29 December 2000; is supplemented from 1 January 2006 by the
Federal act N 119-FZ of 22 July 2005, - see the previous wording).

   The above mentioned sums shall be deducted or returned to the taxpayer - a foreign person after payment by the
fiscal agent of the tax withheld from the incomes of this taxpayer, and only in the part in which the acquired or
imported goods (works, services), property rights were used in production of goods (carrying out of works, rendering
services) sold to the fiscal agent who withheld the tax. These sums of the tax shall be deducted or returned subject to
registration of the taxpayer- a foreign person in fiscal agencies of the Russian Federation (the paragraph is in the
wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000; is supplemented from 1
January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous wording).

   5. Deductions shall apply to sums of the tax presented by the seller to the buyer and paid by the seller to the
budget when selling goods, in the case of return of these goods (as well as during the guarantee period) to the seller
or rejection thereof. Sums of the tax paid in performance of works (rendering services) in the case of rejection of these
works (services) shall be subject to deductions.

   Deductions shall apply to sums of the tax calculated by sellers and paid by them to the budget on sums of payment
or partial payment for the account of future supplies of goods (performance of works, rendering services), sold on the
territory of the Russian Federation, in the case of changing provisions or cancellation of the respective contract and
return of certain sums of advance payments (the paragraph is in the wording enforced from 1 January 2006 by the
Federal act N 119-FZ of 22 July 2005, - see the previous wording).

   6. Deductions shall apply to sums of the tax presented to the taxpayer by contract organizations (customer
builders) in the case of carrying out by them capital construction, assembling (erection) of fixed assets, sums of the
tax presented to the taxpayer on goods (works, services) acquired by them for performance of construction and
erection works and sums of the tax presented to the taxpayer in acquiring by them of incomplete capital construction
projects.

   Deductions shall apply to sums of the tax at the assignee (assignees) presented by reorganized (reorganizing)
organization on goods (works, services), obtained by the reorganized (reorganizing) organization in performance of
construction and erection works for personal consumption, accepted to deduction, but not accepted by the
reorganized (reorganizing) organization to deduction at the moment of reorganization termination in case of
reorganization.

   Deductions shall apply to sums of the tax presented to the taxpayer calculated by taxpayers according to clause 1
of article 166 of this Code in performance of construction and erection works for personal consumption, connected to
the property intended for realization of operations taxable according to this chapter, the cost of which is included in the
costs to be deducted (as well as via depreciation deductions) in calculation of the tax on profit of organizations.

    Sums of the tax, presented to the taxpayer in case of carrying out capital construction of objects of real estate
(fixed assets) by contractors, when acquiring of real estate (except for air, sea vessels and vessels of internal
navigation, and also space objects), calculated by taxpayer in performance of construction and erection works for
personal consumption, accepted to deduction in the procedure stipulated by this chapter are subject to restoration in
case the specified objects of real estate (fixed assets) shall be used further for realization of the operations specified
in clause 2 of article 170 of this Code, except for the fixed assets, which completely depreciated or from the moment
of which input to operation has passed not less than 15 years at this taxpayer.

   In case specified in the fourth paragraph of this clause, the taxpayer is obliged upon termination of each calendar
year within ten years since the year in which the moment has occurred specified in the second paragraph of clause 2
of article 259 of this Code, to reflect of the restored sum of tax in the tax declaration submitted to tax agencies at a
place of registration for the last tax period of each calendar year from ten thereof. Calculation of the sum of tax subject
to restoration and payment in the budget shall be made proceeding from the one tenth sum of tax accepted to
deduction in the corresponding share. The specified share shall be determined proceeding from cost of the shipped
goods (executed works, rendered services), transferred property rights not taxable and specified in clause 2 of article
259 of this Code, in a total cost of the goods (works, services), property rights, shipped (transferred) for a calendar
year. Sum of the tax subject to restoration is not included in cost of this property and is registered in structure of the
miscellaneous costs according to article 264 of this Code.
   (The clause is in the wording enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005. - See the
previous wording).

  7. Deductions shall apply to sums of the tax paid on travel costs (costs of travel to the place of destination of the
business trip and back, including use of bed linen and rent of dwelling premises) and representative costs to be
deducted in calculated of the tax on profits of organizations (the paragraph is in the wording enforced from 1 January
2002 by the Federal act No 110-FZ of 6 August 2002, - see the previous wording)

   If according to chapter 25 of this Code costs are taken for purposes of taxation according to the norms, the sums of
the taxes on these costs shall be deducted at the amount corresponding to these norms (the paragraph is in the
wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relationships
arising from 1 January 2002, - see the previous wording)

   8. Deductions shall apply to the sums of the tax calculated and paid by taxpayers on sums of payment, part
payment received for the account of future supplies of goods (works, services) (the clause is in the wording enforced
from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000; is supplemented from 1 July 2002 by the
Federal act No 57-FZ of 29 May 2002; the effect shall apply to relationships arising from 1 January 2002; is in the
wording enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous wording).

  9. The clause has been excluded from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000.

   10. Deductions shall apply to the sums of the tax calculated by taxpayer in case of absence of the documents,
stipulated by article 165 of this Code for operations on realization of the goods (works, services), specified in clause 1
of article 164 of this Code (the clause has been added from 1 January 2006 by the Federal act N 119-FZ of 22 July
2005).

   11. Deductions shall apply to the sums of the tax which have been restored by stockholder (participant,
shareholder) in the procedure established by clause 3 of article 170 of this Code, in case of their use for realization of
the operations recognized as a taxation objects according to this chapter at the taxpayer who has obtained as a
contribution (payment) in authorized capital (fund) property, intangible assets and property rights (the clause has been
added from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005).




                       Article 172. Procedure for application of tax deductions
   1. Tax deductions provided by article 171 of this Code shall be made on the basis of invoices made out by sellers
in acquisition by buyers of goods (works, services), property rights documents confirming actual payment amount of
tax when importation of the goods on customs territory of the Russian Federation, documents confirming payment
amount of tax, deducted by fiscal agencies, or on the basis of other documents in the cases provided by clauses 3, 6-
8 of article 171 of this Code (the paragraph is in the wording enforced since 1 January 2001 by the Federal law N 166-
FZ from 29 December 2000; is supplemented from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see
the previous wording).

   Unless otherwise provided by this article, amounts of the tax that are subject to deduction shall be only those
presented to taxpayer and paid by him in acquisition of goods (works, services), property rights on the territory of the
Russian Federation or actually paid by them in importation of goods into the customs territory of the Russian
Federation, after registration of these goods (works, services), property rights taking into account specific features
provided by this article and in availability of appropriate basic documents (the paragraph is in wording enforced since
1 January 2001 by the Federal law N 166-FZ from 29 December 2000; is in the wording enforced from 1 January
2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous wording).

   Deductions of amounts of the tax presented by sellers to a taxpayer in acquisition or paid in importation into the
customs territory of the Russian Federation of fixed assets, installation equipment and (or) intangible assets specified
in clauses 2 and 4 of article 171 of this Code shall be made in full volume after registration of these fixed assets,
installation equipment and (or) intangible assets (the paragraph is supplemented from 1 January 2006 by the Federal
act N 119-FZ of 22 July 2005; is in the wording enforced from 1 May 2006 by the Federal act N 28-FZ of 28 February
2006, effect shall apply to the relationships arising from 1 January 2006, - see the previous wording).

  Foreign currency shall be recalculated in roubles at a rate of the Central bank of the Russian Federation on the
date of registration of the goods (works, services), property rights in acquisition for a foreign currency of the goods
(works, services), property rights (the paragraph has been added from 1 January 2006 by the Federal act N 119-FZ of
22 July 2005).

   2. If a taxpayer uses his own property (including promissory notes of a third party) in payment for goods (works,
services) acquired by him, deductions shall apply to the sums of the tax actually paid by the taxpayer, which are
calculated on the basis of the book cost of the above property (taking into account its revaluation and depreciation
which are performed in accordance with the legislation of the Russian Federation) passed for account of payment
thereof (the clause has been added since 1 January 2001 by the Federal law N 166-FZ from 29 December 2000; is in
the wording enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005; is in the wording enforced
from 1 May 2006 by the Federal act N 28-FZ of 28 February 2006, effect shall apply to the relationships arising from 1
January 2006, - see the previous wording).

   If a taxpayer-promisor uses his own promissory note (or promissory notes of a third party obtained in exchange for
his own promissory note) in payments for goods (works, services) acquired by him, the amounts of the tax actually
paid by the taxpayer-promisor in acquisition of the above goods (works, services) shall be calculated on the basis of
sums actually paid by them for his promissory note.

  3. Deductions of sums of the tax provided by article 171 of this Code with respect to operations on realization of
goods (works, services) specified in clause 1 of article 164 of this Code shall be made only upon submission to fiscal
agencies of the appropriate documents provided by article 165 of this Code.

  Deductions of amounts of the tax provided by this clause shall be made on the basis of a separate tax declaration
mentioned in clause 7 of article 164 of this Code.
  ____________________________________________________________________
  Amendments will be made into clause 3 of this article from 1 January 2007 by the Federal act N 119-FZ of 22 July
2005.
  ____________________________________________________________________

   4. Deductions of amounts of the tax specified in clause 5 of article 171 of this Code shall be made in full volume
after showing the appropriate correction operations in connection with return of goods or refusal of goods (works,
services), but not later than one year from the moment of return of refusal.

   5. Deductions of sums of the tax specified in paragraph one and two of clause 6 of article 171 of this Code shall be
made according to the procedure established by paragraphs one and two of clause 1 of this article (the paragraph is
in the wording enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous
wording).

   Deductions of sums of the tax specified in paragraph three of clause 6 of article 171 of this Code shall be provided
as soon as the tax calculated by the taxpayer in performance of construction and erection works for internal
consumption have been paid to the budget in accordance with article 173 of this Code (the paragraph is in the
wording enforced from 1 September 2005 by the Federal act N 118-FZ of 22 July 2005, the effect shall apply to legal
relationships arising from 1 January 2005, - see the previous wording).

   Deduction of sums of the tax specified in paragraph three of clause 6 of article 171 of this Code which have not
been accepted by reorganized (reorganizing) organization to a deduction till the moment of reorganization termination
shall be made by the assignee (assignees) in process of payment in the budget of the tax calculated by reorganized
(reorganizing) organization in performance of construction and erection works for personal consumption in conformity
with article 173 of this Code in case of reorganization of the organization (the paragraph has been added from 1
September 2005 by the Federal act N 118-FZ of 22 July 2005, the effect shall apply to legal relationships arising from
1 January 2005).
   (The clause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect
shall apply to relationships arising from 1 January 2002, - see the previous wording).

   6. Deductions of amounts of the tax specified in clause 8 of article 171 of this Code shall be made from the date of
shipment of the appropriate goods (performance of works, rendering of services) (the paragraph is in the wording
enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous wording).

   7. When determining the moment of determination of tax base in the procedure stipulated by clause 13 of article
167 of this Code, deductions of the sums of the tax shall be carried out at the moment of determination of the tax base
(the clause has been added from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005).

   8. Deductions of the sums of the tax specified in clause 11 of article 171 of this Code shall be made upon
registration of the property, including the fixed assets both intangible assets, and the property rights obtained as a
payment of contribution (payment) in authorized capital (fund) (the clause has been added from 1 January 2006 by
the Federal act N 119-FZ of 22 July 2005).



                        Article 173. Sum of the tax to be paid into the budget
   1. The sum of the tax to be paid to the budget shall be calculated according to the results of each tax period as the
total sum of the tax calculated according to article 166 of this Code, reduced by the sum of tax deductions provided by
article 171 of this Code (except tax deductions provided by clause 3 of article 172 of this Code) and increased on the
sum of the tax restored according to this chapter (the paragraph is supplemented from 1 January 2006 by the Federal
act N 119-FZ of 22 July 2005, - see the previous wording).
   ____________________________________________________________________
   Amendments will be made into clause 1 of this article from 1 January 2007 by the Federal act N 119-FZ of 22 July
2005.
   ____________________________________________________________________

   The sum of the tax to be paid to the budget on operations of selling goods (works, services) specified in clause 1 of
article 164 of this Code shall be determined according to the results of each tax period, as the sum of the tax
calculated according to clause 6 of article 166 of this Code reduced by the sum of tax deductions provided by clause 3
of article 172 of this Code (the paragraph is in the wording enforced from 1 July 2002 by the Federal act N 57-FZ of 29
May 2002; the effect shall apply to relationships arising since 1 January 2002; is in the wording enforced from 1
January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous wording).
   2. If the sum of tax deductions in some tax period exceeds the total sum of the tax calculated according to article
166 of this Code and increased on the sum of the tax restored according to clause 3 of article 170 of this Code, the
positive difference between the sum of tax deductions and the sum of the tax calculated on operations considered the
object of taxation according to clauses 1 and 2 of clause 1 of article 146 of this Code shall be subject to
reimbursement to the taxpayer in accordance with the procedure and on the terms provided by article 176 of this
Code, except the cases when the tax declaration was submitted by the taxpayer upon expiration of three years after
termination of the certain tax period (the paragraph is in the wording enforced from 1 July 2002 by the Federal act N
57-FZ of 29 May 2002; the effect shall apply to relationships arising since 1 January 2002; is supplemented from 1
January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous wording).

  The paragraph has been excluded from 1 July 2002 by the Federal act N 57-FZ of 29 May 2002; the effect shall
apply to relationships arising since 1 January 2002. - See the previous wording.

   Surplus of sums of tax deductions provided by clause 3 of article 172 of this Code over the sums of the tax
calculated in accordance with clause 6 of article 166 of this Code shall be subject to reimbursement to the taxpayer in
accordance with the procedure and on the terms provided by article 176 of this Code, except the cases when the tax
declaration was submitted by the taxpayer upon expiration of three years after termination of the certain tax period
(the paragraph has been added to from 1 July 2002 by the Federal act N 57-FZ of 29 May 2002; the effect shall apply
to relationships arising since 1 January 2002, - see the previous wording).

  3. The sum of the tax to be paid in case of importation of goods into the customs territory of the Russian Federation
shall be calculated in accordance with clause 5 of article 166 of this Code.

   4. In the case of selling goods (works, services) specified in article 161 of this Code, the sum of the tax to be paid
into the budget shall be calculated and paid in full volume by fiscal agents specified in article 161 of this Code (the
clause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000; is in the
wording enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see the previous wording).

   5. The sum of the tax to be paid to the budget shall be calculated by the following persons, if they make up the
invoice to the buyer specifying the sum of the tax (the paragraph is in the wording enforced from 1 July 2002 by the
Federal act N 57-FZ of 29 May 2002; the effect shall apply to relationships arising since 1 January 2002, - see the
previous wording):

   1) persons that are not taxpayers or taxpayers exempted from execution of taxpayers’ obligations connected with
calculation and payment of the tax (the paragraph is in the wording enforced from 1 July 2002 by the Federal act N
57-FZ of 29 May 2002; the effect shall apply to relationships arising since 1 January 2002, - see the previous
wording);

    2) taxpayers selling goods (works, services), where operations of selling are not subject to taxation (the paragraph
is in the wording enforced from 1 July 2002 by the Federal act N 57-FZ of 29 May 2002; the effect shall apply to
relationships arising since 1 January 2002, - see the previous wording).

   The sum of the tax to be paid into the budget shall be determined as the sum of the tax specified in the certain
invoice given to the buyer of the goods (works, services).



             Article 174. Procedure and terms of payment of the tax into the budget
   1. Payment of the tax on operations considered the object of taxation according to subclauses 1-3 of article 146 of
this Code, on the territory of the Russian Federation shall be made according to the results of each tax period on the
basis of actual sale (transfer) of goods (performance, as well as for personal purposes, of works, rendering, as well as
for personal purposes, of services) for the expired tax period not later the 20-th day of the month following the expired
tax period, unless otherwise provided by this chapter (the paragraph is in the wording enforced from 1 January 2001
by the Federal act No 166-FZ of 29 December 2000).

  If goods are imported into the customs territory of the Russian Federation, the sum of the tax to be paid into the
budget shall be paid in accordance with the customs legislation.

  2. The sum of the tax to be paid into the budget on operations of selling (transfer, execution, rendering for internal
purposes) of goods (works, services) on the territory of the Russian Federation shall be paid at the place of
registration of the taxpayer in fiscal agencies (the paragraph is in the wording enforced from 1 July 2002 by the
Federal act N 57-FZ of 29 May 2002; the effect shall apply to relationships arising since 1 January 2002, - see the
previous wording).

   3. Fiscal agents (organizations and sole proprietors) shall pay sums of the tax at the place of their location (the
paragraph is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000; added
to from 1 July 2002 by the Federal act N 57-FZ of 29 May 2002; the effect shall apply to relationships arising since 1
January 2002, - see the previous wording).

   4. Payment of the tax by the persons specified in clause 5 of article 173 of this Code shall be made according to
the results of each tax period, basing on certain sale of goods (works, services) for the expired tax period, not later
than the 20-th day of the month following the expired tax period.

   When selling works (services), where the place of selling is the territory of the Russian Federation taxpayers -
foreign persons not registered in fiscal agencies as taxpayers shall pay the tax by means of fiscal agents at the same
time with payment (transfer) of pecuniary funds to these taxpayers (the paragraph is has been added since 1 January
2004 by the Federal act No 163-FZ of 8 December 2003).

   The bank rendering services to the fiscal agent shall not have the right to take order from them in favour of the
above mentioned taxpayers, if the fiscal agent has not also submitted to the bank an order for payment of the tax from
the account opened in this bank, with sufficiency of pecuniary funds for payment of the total sum of the tax (the
paragraph is has been added since 1 January 2004 by the Federal act No 163-FZ of 8 December 2003).

   5. Taxpayers (fiscal agents), as well as those stated in clause 5 of article 173 of this Code, must submit certain tax
declaration to fiscal agencies at the place of their registration not later than the 20-th day of the month following the
expired tax period, unless otherwise provided by this chapter (the clause has been added to from 1 January 2001 by
the Federal act No 166-FZ of 29 December 2000).

   6. Taxpayers with monthly sums of proceeds on sales of goods (works, services) without the tax not exceeding two
million rubles shall have the right to pay the tax on the basis of actual sale (transfer) of goods (performance, as well as
for personal purposes, of works, rendering, as well as for personal purposes, of services) for the expired tax period
not later the 20-th day of the month following the expired tax period (the clause is in the wording enforced from 1
January 2004 by the Federal act No 117-FZ of 7 July 2003; is in the wording enforced from 1 January 2006 by the
Federal act N 119-FZ of 22 July 2005, - see the previous wording).

    Taxpayers paying the tax quarterly shall submit the tax declaration not later than the 20-th day of the month
following the expired quarter.




                    Article 174_1. Specific features of calculation and payment
                of the tax into the budget in performance of operations according
                 to the contract of special partnership (contract on joint activity)
                        or contract of confidential management of property
                            within the territory of the Russian Federation
   1. With the purposes of this chapter keeping of the general registration of the operations subject to taxation
according to article 146 of this Code shall be assigned to the participant of a partnership which is the Russian
organization or sole trader (hereinafter in this article - the participant of partnership).

   In performance of operations according to the contract of special partnership (contract on joint activity) or contract
of confidential management of property, obligations of the taxpayer established by this chapter shall be assigned to
the participant of partnership or to the confidential manager.

   2. In performance of the goods (works, services), transfer of property rights according to the contract of special
partnership (contract on joint activity) or contract of confidential management of property the participant of a
partnership or a confidential manager is obliged to expose the corresponding invoices in the procedure established by
this Code.

   3. The tax deduction on goods (works, services), including fixed assets and intangible assets, and on the property
rights obtained for manufacture and (or) realization of the goods (works, services), recognized as a object of the
taxation according to this chapter, according to the contract of special partnership (contract on joint activity) or
contract of confidential management of property shall be granted only to participant of the partnership or to
confidential manager in the presence of the invoices exposed by sellers to these persons according to the procedure
established by this chapter.

   Right to deduction of sums of the tax arises in the presence of the separate account of the goods (works, services),
including fixed assets both intangible assets, and property rights used in performing operations according to the
contract of special partnership (contract on joint activity) or contract of confidential management of property and used
thereby in realization of other activity when performing by participant of the partnership of the general registration of
operations with a purpose of the taxation, or other activity by confidential manager.
   (The article has been added since 1 January 2006 by the Federal act N 119-FZ of 22 July 2005).




               Article 175. Specific features of calculation and payment of the tax
            At the place of location of independent subdivisions of the organization
                     (the article has been excluded from 1 July 2002 by the Federal act N 57-FZ
                 of 29 May 2002; the effect shall apply to relationships arising since 1 January 2002.
                                             - See the previous wording)




                          Article 176. Procedure for compensation of the tax
   1. If according to the results of the tax period the sum of tax deductions exceeds the total amount of the tax
calculated on operations considered the object of taxation according to subclauses 1-3 of clause 1 of article 146 of
this Code, then the obtained difference shall be reimbursed (setoff, returned) to the taxpayer according to the
provisions of this article (the paragraph has been added from 1 January 2001 by the Federal act No 166-FZ of 29
December 2000; is in the wording enforced from 1 January 2006 by the Federal act N 119-FZ of 22 July 2005, - see
the previous wording).

   2. The above mentioned sum shall be sent within three calendar months following the expired tax period, to
execution of taxpayer’s duties on payment of taxes or fees including taxes paid in connection with movement of goods
across the customs territory of the Russian Federation, to payment of penalties, repayment of the arrears, sums of tax
sanctions charged on the taxpayer to be paid to the same budget.

   Fiscal agencies shall make setoff independently, and as for taxes paid in connection with transfer of goods across
the customs territory of the Russian Federation, as agreed with customs agencies and inform the taxpayer thereabout
within ten days after the setoff.
   (The clause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000).
   ____________________________________________________________________
   Amendments will be made into clause 2 of this article from 1 January 2007 by the Federal act N 119-FZ of 22 July
2005.
   ____________________________________________________________________

   3. Upon expiration of three calendar months following the expired tax period, the sum which was not set off shall be
returned to the taxpayer at his written request (the paragraph is in the wording enforced from 1 January 2001 by the
Federal act No 166-FZ of 29 December 2000).

   Within two weeks after the receipt of the above mentioned request, the fiscal agency shall make a decision on
return of this sum to the taxpayer from the corresponding budget, and send this decision within the same period to
execution to the certain Federal treasury body. These sums shall be returned by the Federal treasury bodies (the
paragraph is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000l; is in
the wording enforced from 1 January 2005 by the Federal act N 183-FZ of 28 December 2004, - see the previous
wording).

   The sums shall be returned by the Federal treasury bodies within two weeks following the date of receipt of this
decision of the fiscal agency. If this decision was not received by the certain Federal treasury body upon expiration of
seven days following the date of sending by the fiscal agency, the date of receipt of this decision shall be the eighth
date following the date of sending of this decision by the fiscal agency (the paragraph is in the wording enforced from
1 January 2005 by the Federal act N 183-FZ of 28 December 2004, - see the previous wording).
   In case of violation of terms established by this clause, interest shall be charged on the sum to be returned to the
taxpayer on the basis of one three hundred sixtieth of the RF central Bank interest rate for each day of arrears (the
paragraph is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000).

   4. The sums provided by article 171 of this Code referring to operations of sale of goods (works, services) provided
by subclauses 1-6 and 8 of clause 1 of articlen164 of this Code, as well as sums of the tax calculated and paid in
accordance with clause 6 of article 166 of this Code shall be reimbursed by means of setoff (return) on the basis of a
separate tax declaration specified in clause 6 of article 164 of this Code and documents provided by article 166 of this
Code (the paragraph is in the wording enforced from 1 July 2002 by the Federal act N 57-FZ of 29 May 2002, - see
the previous wording).

   Reimbursement shall be provided not later than three months following the date of submission by the taxpayer of
the tax declaration specified in clause 6 of article 164 of this Code and documents provided by article 165 of this Code
(the paragraph is in the wording enforced from 1 July 2002 by the Federal act N 57-FZ of 29 May 2002. - See the
previous wording).

   During the above mentioned period the fiscal agency shall make an inspection of expediency of application of 0%
tax rate and tax deductions and make a decision on reimbursement by way of set off or return of certain sums or
refusal (fully or partly) of the reimbursement.

   If the fiscal agency makes a decision on refusal (fully or partly) of the reimbursement, it must provide a motivated
report to the taxpayer within 10 days following the decision making.

   If the fiscal agency has not made a decision on refusal within the established period, and (or) the report thereabout
has not been provided to the taxpayer, the fiscal agency must make a decision on reimbursement of the sum on which
the decision on refusal was not made, and notify the taxpayer on the decision made within ten days.

   If the taxpayer has arrears or penalties on the tax, arrears or penalties on other taxes and fees, as well as debts
under charged tax sanctions to be placed into the same budget from which the sums are to be returned, they shall be
set off in the first place, according to the decision of the fiscal agency (the paragraph is in the wording enforced from 1
January 2001 by the Federal act No 166-FZ of 29 December 2000).

  Fiscal agencies shall provide this set off independently and inform the taxpayer thereabout within 10 days.

   If the fiscal agency has made a decision on reimbursement in the availability of an arrears on the tax, which
appeared during the period between the date of submission of the declaration and date of reimbursement of the
corresponding sums, which does not exceed the sum to be reimbursed according to the decision of the fiscal agency,
no penalties shall be charged on the sum of arrears.

   If the taxpayer does not have arrears or penalties on the tax, arrears or penalties on other taxes, as well as debts
under charged tax sanctions to be placed into the same budget from which the sums are to be returned, the sums to
be reimbursed shall be set off for the account of the current payments of the tax and (or) other taxes and fees to be
paid into the same budget, as well as of taxes paid in connection with movement of goods across the customs border
of the Russian Federation and in connection with realization of works (services), which are directly linked with
production and selling of these goods, as agreed with the customs agencies, or shall be returned to the taxpayer at
their request (the paragraph is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29
December 2000).

  The fiscal agency shall make a decision on return of sums of the tax from the not later than the last day of the
period specified in paragraph two of this clause, and send this decision within the same period to the respective
Federal treasury body for execution (the paragraph is in the wording enforced from 1 January 2005 by the Federal act
N 183-FZ of 28 December 2004, - see the previous wording).

   Return of the sums shall be provided by Federal treasury bodies within two weeks following the receipt of the
decision of the fiscal agency. If this decision has not been received by certain Federal treasury body upon expiration
of seven days counting from the date of sending by the fiscal agency, the date of receipt shall be considered the
eighth day following the date of sending of this decision by the fiscal agency (the paragraph is in the wording enforced
from 1 January 2005 by the Federal act N 183-FZ of 28 December 2004, - see the previous wording).

   In case of violation of terms established by this clause, interest shall be charged on the sum to be returned to the
taxpayer on the basis of the RF central Bank interest rate.
             Article 177. Terms and procedure for payment of the tax in the case of
           Importation of goods into the customs territory of the Russian Federation
  Terms and procedure for payment of the tax in the case of importation of goods into the customs territory of the
Russian Federation shall be established by the RF customs legislation with the account of the provisions of this
chapter.



                      Article 178. Taxation procedure in executing product share
                                              agreements
                                     (the article has lost its force since 10 June 2003 -
                                           Federal act N 65-FZ of 6 June 2003. -
                                                  See the previous wording)




                                              Chapter 22. Excise duties


                                                 Article 179. Taxpayers
  1. Taxpayers of an excise duty (hereinafter in this chapter - the taxpayers) shall be (the clause is in wording
enforced since 1 January 2001 by the Federal law N 166-FZ from 29 December 2000):

  1) organizations;

  2) sole proprietors;

  3 ) persons considered taxpayers in connection with movement of goods across the customs territory of the
Russian Federation, determined in accordance with the RF Customs Code (the clause is in wording enforced since 1
January 2001 by the Federal law N 166-FZ from 29 December 2000).

  2. Organizations and other persons specified in this article shall the taxpayers, if they make operations which are
subject to taxation in accordance with this chapter (the clause is in wording enforced since 1 January 2001 by the
Federal law N 166-FZ from 29 December 2000).



                          Article 179_1. Certificates of registration of a person
                                 Performing operations with oil products

   1. Certificates of registration of a person performing operations with oil products (hereinafter in this chapter referred
to as certificates) shall be issued to organizations and sole traders involved in the following types of activities:

  Production on oil products - certificate for production;

  Wholesale trade in oil products - certificate for wholesale trade;

  Wholesale and retail trade in oil products - certificate for wholesale and retail trade;

  Retail trade in oil products - certificate for retail trade.

    Production of oil-chemistry products at which directly distilled petrol is used as a raw material, - the certificate for
processing of directly distilled petrol. Production obtained as a result of processing (chemical transformations)
components of oil (including directly distilled petrol) and natural gas in organic substances and fractions which are
finished-products and (or) waste products obtained in processing of directly distilled petrol during manufacture of the
specified production is used further for release on their basis of other products shall be understood as a oil-chemistry
products (the paragraph has been added from 1 January 2006 by the Federal act N 107-FZ of 21 July 2005).
   ____________________________________________________________________
   The sixth paragraph of the previous wording is considered the seventh paragraph of this wording since 1 January
2006 - Federal act N 107-FZ of 21 July 2005.
   ____________________________________________________________________

   If organizations and sole traders perform operations on wholesale or wholesale-retail trade in oil products produced
by them from their own raw materials (including oil products liable to excise duty) or received for the account of
payment for services of production of oil products from give-and-take raw materials and materials (subject to the type
of activity performed), this person shall be given a certificate for wholesale trade or certificate for wholesale and retail
trade. The certificate for production shall not be given to organizations and sole traders.

  2. The certificate shall specify:

  The name of the fiscal agency that issued the certificate;

   Full or contracted name of the organization (surname, name, patronymic of the sole trader), location of the
organization (place of residence of the sole trader) and address (place of actual activity) where the organization (sole
trader) performs the types of activities specified in clause 1 of this article;

  Taxpayer’s identification number (INN);

  Type of activity and brands (nomenclature) of the oil products;

  Requisites of the documents confirming the right of ownership (right of economic management and (or) operative
management) for the production capacities and location of these capacities;

  Requisites of the documents confirming the right of ownership (right of economic management and (or) operative
management) for the capacities for storage of the oil products and location of these capacities;

    Location and number of unmovable fuel stations, requisites of the documents confirming the right of ownership
(right of economic management and (or) operative management) for the unmovable fuel stations;

  Requisites of the contract for rendering services on processing of oil, gas condensate, casing-head oil gas, natural
gas, bituminous shale, coal and other raw materials, as well as products of processing thereof with an organization
performing this processing (in the availability of the above mentioned contract);

   Requisites of the contract for rendering services on processing of directly distilled petrol with the organization
performing production of oil-chemistry (in the presence of the specified contract) (the paragraph has been added from
1 January 2006 by the Federal act N 107-FZ of 21 July 2005);
   ____________________________________________________________________
   Paragraphs ten-twelve of the previous wording is considered paragraphs eleven-thirteen of this wording since 1
January 2006 - Federal act N 107-FZ of 21 July 2005.
   ____________________________________________________________________

  Effective period of the certificate (up to one year);

  Conditions of performance of these types of activity;

  Registration number of the certificate and the date of issuance thereof;

  3. The procedure for issuance of the certificate shall be determined by the RF Ministry of finance (clause is in the
wording enforced since 2 August 2004 by the Federal act N 58-FZ on 29 June 2004, - see the previous wording).

  4. Certificates shall be given out to organizations and sole traders subject to meeting the following requirements:

   1) certificate for production - in the availability of capacities for production, storage and sale of oil products in the
ownership (on the right of economic management and (or) operative management) of the organization or the sole
trader (organization where the applying organization holds more than 50% of the authorized capital (fund) of the
limited company or voting stocks of the joint-stock company);
   2) certificate for wholesale trade (unless otherwise provided by this clause) - in the availability of capacities for
storage and sale of oil products in the ownership (on the right of economic management and (or) operative
management) of the organization or the sole trader (organization where the applying organization holds more than
50% of the authorized capital (fund) of the limited company or voting stocks of the joint-stock company), and (or) in
the availability of a contract on rendering services on processing of raw oil, gas condensate, casing-head oil gas,
natural gas, bituminous shale, coal and other raw materials belonging to this taxpayer, as well as products of
processing thereof, and (or) in the availability of a contract of leasing capacities being in the state ownership (for joint-
stock companies having the stake of the state in their authorized capital not less than 50%);

   3) certificate for wholesale and retail trade (unless otherwise provided by this clause) - in the availability of
capacities for storage and sale of oil products and unmovable fuel stations in the ownership (on the right of economic
management and (or) operative management) of the organization or the sole trader (organization where the applying
organization holds more than 50% of the authorized capital (fund) of the limited company or voting stocks of the joint-
stock company), and (or) in the availability of a contract of leasing capacities being in the state ownership (for joint-
stock companies having the stake of the state in their authorized capital not less than 50%);

   4) certificate for wholesale and retail trade - in the availability of capacities for storage and sale of oil products
(except motor oils for diesel and (or) carburetor (injector) engines) from unmovable fuel stations and (or) capacities
(premises) for storage and sale of motor oils in the ownership (on the right of economic management and (or)
operative management) of the organization or the sole trader (organization where the applying organization holds
more than 50% of the authorized capital (fund) of the limited company or voting stocks of the joint-stock company),
and (or) in the availability of a contract of leasing capacities being in the state ownership (for joint-stock companies
having the stake of the state in their authorized capital not less than 50%).

   5) certificate for processing of directly distilled petrol - in the availability of capacities in the ownership (on the right
of economic management and (or) operative management) of organization or sole proprietor (organization where the
applying organization holds more than 50% of the authorized capital (fund) of the limited company or voting stocks of
the joint-stock company) for manufacture, storage and sale of production of oil-chemistry and (or) in the availability of
a contract for rendering services on processing of the directly distilled petrol belonging to this taxpayer with the
organization effecting production of oil-chemistry (the paragraph has been added from 1 January 2006 by the Federal
act N 107-FZ of 21 July 2005).

    The fiscal agency must issue a certificate (notify the applicant on a refusal to issue the certificate) within 30 days
following the date of submission by the taxpayer of the application for issuance thereof and copies of the documents
provided by this article. The notification shall be sent to the taxpayer in the written form specifying the reasons for the
refusal. In order to get a certificate the taxpayer (unless otherwise established by this article) shall submit to the fiscal
agency an application for issuance thereof and data on the availability of the capacities necessary for performance of
the type of activity applied for, and copies of the documents confirming the right of ownership of the taxpayer to the
specified capacities (copies of documents confirming the right of economic management and (or) operative
management of the property assigned thereto).

   In order to get a certificate for wholesale trade, an organization or sole trader - owner of raw oil, gas condensate,
casing-head oil gas, natural gas, bituminous shale, coal and other raw materials, as well as products of processing
thereof, instead of the documents confirming the right of ownership (the right of economic management and (or)
operative management) to the capacities for storage and sale of oil products, may submit to the fiscal agency a
certified copy of the contract on rendering services on processing of oil, gas condensate, casing-head oil gas, natural
gas, bituminous shale, coal and other raw materials, as well as products of processing thereof. The above mentioned
note shall be made in the case of submission to the fiscal agency at the place of location of this organization of a copy
of the contract on rendering services on processing of oil, gas condensate, casing-head oil gas, natural gas,
bituminous shale, coal and other raw materials, as well as products of processing thereof.

   In order to get a certificate for processing of directly distilled petrol, an organization or sole trader - owner of raw oil
instead of the documents confirming the right of ownership (the right of economic management and (or) operative
management) to the capacities for production, storage and sale of oil-chemistry products, may submit to the fiscal
agency a certified copy of the contract on rendering services on processing of directly distilled petrol with the
organization effecting production of oil-chemistry, with a note of fiscal agency at a place of location of the organization
effecting production of oil-chemistry. The above mentioned note shall be made in the case of submission to the fiscal
agency at the place of location of this organization of a copy of the contract on rendering services on processing of oil-
chemistry (the paragraph has been added from 1 January 2006 by the Federal act N 107-FZ of 21 July 2005).
   ____________________________________________________________________
   Paragraph eight of the previous wording is considered paragraph nine of this wording since 1 January 2006 -
Federal act N 107-FZ of 21 July 2005.
   ____________________________________________________________________

   Certificates provided by this article shall also be issued to the organization or sole trader who applied for the
certificate, in the availability of the capacities necessary for getting thereof in the ownership of the organization where
the organization or the sole trader applying for the certificate hold more than 50% of the authorized capital (fund) of
the limited liability company or voting stocks of the joint stock company. In this case the organization or the sole trader
applying for a certificate shall submit to the fiscal agencies documents confirming the rights of the organization for
owning, use and disposal of this property and documents confirming holding the above mentioned stake (the
corresponding number of voting stocks) in the authorized capital (fund) of the organization.

   5. Fiscal agencies shall suspend the effect of the certificate in the following cases:

  The organization or sole trade have not followed the provisions of the effective legislation on taxes and fees in the
part of calculation and payment of excise duties;

   Non-submission by the organization or the sole trader - buyer (recipient) of oil products liable to excise duty during
three successive tax periods of registries of invoices, which should be submitted to fiscal agencies according to article
201 of this Code. In this case the effect of the certificate of the organization or the sole trader - buyer (recipient) of oil
products liable to excise duty shall be suspended;

   Use of technological equipment for production, storage and sale of oil products, if it is not equipped with control and
registration-measuring devices, violation of work and operation conditions of the control and registration-measuring
devices mounted onto this technological equipment.

    In the case of a suspension of the effect of the certificate the fiscal agency must establish the term for elimination of
the infringements which have caused suspension of the effect thereof. This term may not exceed six months. If the
infringements have not been eliminated within this period, the certificate shall be cancelled.

   The organization or sole trader having a certificate must notify the fiscal agency that issued the certificate in writing
on elimination by them of the infringements which caused the suspension of the effect of the certificate. The fiscal
agency that issued the certificate shall make a decision to restore the effect thereof and inform the organization or
sole trader thereabout in writing within three working days after checking the elimination of the infringements, which
caused the suspension of the effect of the certificate and the decision made to restore the effect thereof.

   The validity period of the certificate shall not be extended for the time of suspension.

   Fiscal agencies shall annul the certificate in the following cases:

   Submission by an organization or sole trader of a certain application;

  Transfer by an organization or sole trader of the certificate issued according to the established procedure in
compliance with clause 3 of this article to another person;

   Accomplishment of reorganization of the organization if as a result of the reorganization this organization has lost
the right of ownership for the capacities declared at the moment of getting the certificate;

   Accomplishment of reorganization of the organization in the form of demerge or separation;

   Change of the name of the organization (change of the surname, name, patronymic of the sole trader);

   Change of the location of the organization (residence of the sole trader);

   Termination of the right of ownership for the whole volume of capacities specified in the certificate.

   6. In the cases of annulment of the certificate specified by clause 5 of this article, as well as in case of a loss by the
organization or sole trader of the certificate the organization or sole trader shall have the right to submit an application
for getting a new certificate.

   7. The fiscal agency that issued the certificate must notify the organization or sole trader on suspension of the
effect or on annulment of this certificate within three days since the date of the decision making.
   (The article has been added since 31 August 2002 by the Federal act No 110-FZ of 24 July 2002; in the wording
enforced since 1 January 2003 by the Federal act No 191-FZ of 31 December 2002, - see the previous wording).
     Article 179_2 Certificates on registration of the organization performing operations
                               with the denaturized ethyl alcohol
   1. Certificates on registration of the organization performing operations with the denaturized ethyl alcohol
(hereinafter in this article - the certificate) shall be given out to the organizations effecting the following types of
activity:

   1) manufacture of the denaturized ethyl alcohol - the certificate on manufacture of the denaturized ethyl alcohol;

  2) manufacture of the non-alcohol production, for which manufacture the denaturized ethyl alcohol is used as a raw
material, - the certificate on manufacture of the non-alcohol production.

   2. The following shall be specified in the certificate:

   1) name of the fiscal agency which was giving out the certificate;

   2) full and reduced names of the organization, a place of location of the organization and address (a place of actual
activity) of the effecting a type of activity by the organization specified in clause 1 of this article;

   3) identification number of the taxpayer (INN);

   4) a type of activity;

  5) requisites of the documents confirming the property right (the right of economic management and (or) operative
management) for capacities, and a place of location of the specified capacities;

  6) requisites of the documents confirming the property right (the right of economic management and (or) operative
management) for capacities on storage of the denaturized ethyl alcohol, and a place of location of the specified
capacities;

   7) term of validity of the certificate (till one year);

   8) conditions on effectuation of the specified types of activity;

   9) registration number of the certificate and date of its issue.

   3. Procedure for issue of the certificate shall be determined by the Ministry of Finance of the Russian Federation.

   4. Certificates shall be issued to the organizations in observance of the following requirements:

   1) certificate on manufacture of the denaturized ethyl alcohol - in the availability of the capacities necessary for
getting thereof in the ownership of the organization (the organization applying for the certificate hold more than 50% of
the authorized capital (fund) of the limited liability company or voting stocks of the joint stock company) for
manufacture, storage and sale of the denaturized ethyl alcohol;

   2) certificate on manufacture of the non-alcohol production - in the availability of the capacities necessary for
getting thereof in the ownership of the organization (the organization applying for the certificate hold more than 50% of
the authorized capital (fund) of the limited liability company or voting stocks of the joint stock company) for
manufacture, storage and sale of the non-alcohol production.

   Fiscal agency is obliged to grant the certificate (to notify the applicant on refusal of the certificate’s issue) not later
30 days from the moment of submission by the taxpayer of the application for issue of the certificate and submission
of copies of the documents stipulated by this article. Notification shall direct to the fiscal agency in writing with the
indication of the reasons of refusal. For reception of the certificate the organization submits to the fiscal agency an
application for issue of the certificate, data on availability of the necessary capacities for realization of the declared
type of activity therein and a copy of the documents confirming the property right of the taxpayer to the specified
capacities (copies of the documents confirming the right of economic management and (or) operative management of
the property fixed thereof.
  5. Fiscal agencies shall suspend validness of the certificate in the following cases:

   default of the current legislation on taxes and duties in the part of calculation and payment of excises by the
organization;

   non-submission of registers of the invoices submitted to the fiscal agencies according to article 201 of this Code by
the organization. In the specified case validness of the certificate of the organization is suspended - the buyer
(addressee) of the denaturized ethyl alcohol;

   usage of the process equipment on manufacture, storage and realization of the denaturized ethyl alcohol which
has been not equipped with control devices of the volume registration, and also equipped with the failed control and
registration - measuring equipment, infringement of work and conditions of operation of the control and registration -
measuring equipment established on the specified process equipment.

   In case of suspension of the certificate validness the fiscal agency is obliged to establish the term of elimination of
the infringements following suspension of the certificate validness. The specified term cannot exceed six months. In
case when infringements have not been eliminated due hereunder, the certificate shall be cancelled.

   Organization having the certificate is obliged to notify in writing the fiscal agency issuing the certificate on
elimination of the infringements following suspension of the certificate validness. The fiscal agency issuing the
certificate makes a decision on renewal of its effect and informs in writing of the organization thereon having the
certificate, within three working days after inspection of elimination of the infringements following suspension of the
certificate validness, and decision-making on renewal of the certificate validness.

  Validity term of the certificate for the period of suspension of its effect is not prolonged.

  Fiscal agencies shall cancel the certificate in the following case:

   Manufacture of the alcohol-containing products by the organization having the certificate on manufacture of the
alcohol-containing products;

   transfer of the denaturized ethyl alcohol to other person by the organization having the certificate on manufacture
of the alcohol-containing products;

  submission of the corresponding application by the organization;

   transfer of the certificate to other person in the procedure established according to clause 3 of this article by the
organization;

   completion reorganization of the organization if as a result of reorganization this organization has lost the property
right to the capacities declared in obtaining of the certificate;

  completion reorganization of the organization in the form of allocation or division;

  changing the name of the organization;

  changing of a place of location of the organization;

  termination of the property right to the all volume of the capacities specified in the certificate.

   6. In case of cancellation of the certificate, stipulated by clause 5 of this article, and also in case of loss of the
certificate by the organization, the latter has the right to submit the application for reception of the new certificate.

  7. The fiscal agency issuing the certificate, is obliged to notify the organization on suspension of validness or on
cancellation of the corresponding certificate within three-days term from the date of making the corresponding
decision.

   8. The organization having the certificate, is obliged to report to the fiscal agency issuing the certificate on use of
the denaturized ethyl alcohol in the procedure established by the Ministry of Finance of the Russian Federation.
   (The article has been added since 1 January 2006 by the Federal act N 107-FZ of 21 July 2005).
          Article 180. Specific features for performance of the taxpayer’s obligations
                         of a simple partnership (joint activity contract)
                          (the name of the article is in wording enforced since 1 January 2001
                                 by the Federal law N 166-FZ from 29 December 2000)

   1. Organizations and sole proprietors - participants of a simple partnership agreement (joint activity contract) shall
bear joint responsibility on performance of an obligation on payment of the tax calculated in accordance with this
chapter (the clause is in the wording by the Federal act N 110-FZ of 24 July 2002, with amendments of the Federal
act N 191-FZ on 31 December 2002, - see the previous wording).

   2. For purposes of this chapter it is established that a person performing obligations on calculation and payment of
the whole sum of the excise duty, calculated for operations considered to be objects of taxation in accordance with
this chapter, that are performed under a simple partnership agreement (joint activity contract) shall be a person
managing the simple partnership (joint activity contract). If management of a simple partnership (joint activity contract)
is provided jointly by all participants of the simple partnership (joint activity contract), then the participants of the
simple partnership contract (joint activity contract shall independently determine the participant performing obligations
on calculation and payment of the whole sum of the excise duty on operations which are objects of taxation in
accordance with this chapter, that are performed under a simple partnership contract (joint activity contract) (the
paragraph is in wording enforced since 1 January 2001 by the Federal law N 166-FZ from 29 December 2000).

   This person shall have all the rights and performs obligations of a taxpayer provided by this Code with respect to
the state sum of the excise duty (the paragraph is in wording enforced since 1 January 2001 by the Federal law N
166-FZ from 29 December 2000).

   In accordance with this chapter the specified person must inform the fiscal agency about performance by them of
taxpayer’s duties within the framework of the contract of simple partnership (contract of joint activity) not later than the
date of performance of the first operation considered to be the object of taxation (the paragraph is in the wording
enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000).

   3. In case of full and prompt performance of an obligation on payment of the excise duty by a person performing
obligations on payment of the excise duty within a simple partnership (joint activity contract) in accordance with clause
2 of this article, obligations on payment of the excise duty by other participants of the simple partnership contract (joint
activity contract) shall be considered to be performed (the clause is in wording enforced since 1 January 2001 by the
Federal law N 166-FZ from 29 December 2000).




                                  Article 181. Liable to excise duty goods
                          (name of the article is in the wording enforced from 1 January 2004,
                                     by the Federal act N 117-FZ on 7 July 2003, -
                                                see the previous wording)

  1. The following goods shall be considered liable to excise duty:

  1) ethyl alcohol made of all types of raw materials except cognac alcohol;

  2) alcohol containing excise products (solutions, emulsions, suspensions and other types of products in liquid state
containing solid fraction of ethyl alcohol of more than 9%.

  For purposes of this chapter the following alcohol containing products shall not considered as liable to excise duty:

   medicinal, medical preventive, diagnostics means registered by an authorized federal executive authority and
included in the State register of medicines, medical products, medicinal, medical preventive means (including
homeopathy remedies), produced by drug stores according to individual prescriptions, and requirements of medical
institutions bottled in volumes in accordance with requirements of state standards of medicines (officinal articles)
approved by authorized federal executive authority (the paragraph is in wording enforced since 1 July 2002 by the
Federal act N 57-FZ of 29 May 2002, the effect shall apply to the relationships arising from 1 January 2002, - see the
previous wording);
   veterinary medicines, that have undergone state registration in authorized federal executive authorities, and
included in the State register of veterinary medicines developed for stock breeding on the territory of the Russian
Federation, bottled in volumes of not more than 100 ml;

    perfume-cosmetic products that have undergone state registration in authorized federal executive authorities,
bottled in volumes of not more than 100 ml with the volume share of ethyl alcohol till 80% including (the paragraph is
in the wording enforced from 1 January 2006 by the Federal act N 86-FZ of 28 July 2004, - see the previous wording);
    ____________________________________________________________________
    The fifth Subparagraph of Subclause 2, Clause 1 of Article 181 shall be amended as following by the Federal act N
86-FZ of 28 July 2004:
    ____________________________________________________________________

  perfume-cosmetic products that have undergone state registration in authorized federal executive authorities,
bottled into volumes of maximal 100 ml capacity with ethyl alcohol volume share up to 80 per cent inclusively;

   alcohol containing wastes subject to further processing, which are created in production of ethyl alcohol from food
raw materials, vodkas, liqueur and vodka products and liable to further processing, which correspond to normative
documentation approved (coordinated) by a federal executive authority, included in the State register of ethyl alcohol
made of food raw materials, alcohol and alcohol containing products in the Russian Federation;

   household chemical goods in metallic aerosol packing (the paragraph is in the wording enforced since 1 July 2002
by the Federal act N 57-FZ of 29 May 2002, the effect shall apply to the relationships arising from 1 January 2002, -
see the previous wording);

   perfume-cosmetic products in metallic aerosol packing (the paragraph has been added since 1 January 2006 by
the Federal act N 107-FZ of 21 July 2005);

   3) alcoholic products (drinking alcohol, vodka, liqueur and vodka products, cognacs, natural wine, special wine and
other foods products containing more than 1,5% of ethyl alcohol per a unit of volume of alcoholic products, except
wine materials);

  4) beer;

  5) tobacco products;

  6) the subclause is excluded since 1 January 2003 - the Federal act N 110-FZ of 24 July 2002, - see the previous
wording.
  ____________________________________________________________________
  Subclauses 7-10 of the previous wording are considered subclause 6-9 of the present wording - the Federal act N
110-FZ of 24 July 2002.
  ____________________________________________________________________

  6) cars and motor bikes with engine capacity over 112,5 kVt (150 l. s.) (the subclause is supplemented since 1
January 2001 by the Federal law N 166-FZ from 29 December 2000);

  7) automobile petrol;

  8) diesel fuel;

  9) motor oils or diesel and (or) carburetor (injector) engines;

   10) directly distilled petrol. For purposes of this chapter directly distilled petrol shall mean petrol fractions obtained
as a result of processing of oil, gas condensate, casing-head gas, natural gas, bituminous shale, coal and other raw
materials, as well as products of processing thereof, except automobile petrol and oil-chemistry products (the
subclause is supplemented since 1 January 2006 by the Federal act N 107-FZ from 21 July 2005 N 107-FZ, - see the
previous wording).

   For purposes of this chapter the petrol fraction is a mixture of carbohydrates boiling within the temperature interval
from 30 to 215 °Ñ at the atmospheric pressure of 760 millimeters.
   (The subclause has been added since 1 January 2003 by the Federal act No 110-FZ of 24 July 2002; with the
amendments made by the Federal act No 191-FZ of 31 December 2002, - see the previous wording)
  2. The clause lost force since 1 January 2004 - Federal act N 117-FZ on 7 July 2003. - See the previous wording.




                                        Article 182. Object of taxation
  1. The following operations shall be considered the object of taxation:

  1) sale of goods liable to excise duty on the territory of the Russian Federation by persons who produced them, as
well as sale of pledged objects and transfer of goods liable to excise duty under a smart-money or novation
agreement (except goods liable to excise duty specified in subclauses 7-10 of clause 1 of article 181 of this Code,
hereinafter referred to as oil products).

   For purposes of this chapter transfer of right of ownership to goods liable to excise duty by one person to another
on a paid and (or) gratuitous basis, as well as use thereof in payment in kind shall be considered sale of the goods
liable to excise duty (the paragraph is in the wording enforced from 1 January 2004 by the Federal act No 117-FZ of 7
July 2003, - see the previous wording);

   2) crediting by the organization or sole trader, who do not have a certificate, of oil products independently produced
from their own raw materials and materials (including oil products liable to excise duty), obtaining of oil products in
ownership for the account of payment for services on manufacturing of oil products from the give-and-take raw
materials and materials. For purposes of this chapter, crediting shall mean registering as a finished products of oil
products liable to excise duty that were manufactured from the own raw materials and materials (including oil products
liable to excise duty) (the subclause is supplemented since 5 August 2005 by the Federal act N 74-FZ of 30 June
2005, the effect shall apply to the relationships arising from 1 January 2003; is supplemented since 1 January 2006 by
the Federal act N 107-FZ from 21 July 2005 N 107-FZ, - see the previous wording);

   3) obtaining on the RF territory of oil products by the organization or sole trader having a certificate (the subclause
is supplemented since 5 August 2005 by the Federal act N 74-FZ of 30 June 2005, the effect shall apply to the
relationships arising from 1 January 2003, - see the previous wording).

  For purposes of this chapter obtaining oil products shall mean:

  Acquisition of oil product in ownership;

   Crediting of oil products, obtaining them for the account of payment for the services on manufacturing thereof from
the give-and-take raw materials and materials (including oil products liable to excise duty);

  Crediting of oil products liable to excise duty, which were independently manufactured from the own raw materials
and materials (including oil products liable to excise duty);

   Obtaining by the owner of raw materials and materials of oil products as a finished products manufactured from
this raw materials and materials under a contract of processing (the paragraph is supplemented since 1 January 2006
by the Federal act N 107-FZ from 21 July 2005 N 107-FZ, - see the previous wording);

  4) Transfer on the territory of the Russian Federation by the organization or sole trader of oil products
manufactured from the give-and-take raw materials and materials (including oil products liable to excise duty) to the
owner of these raw materials and materials, who does not have a certificate (the subclause is supplemented since 5
August 2005 by the Federal act N 74-FZ of 30 June 2005, the effect shall apply to the relationships arising from 1
January 2003, - see the previous wording);

  5) the subclause has lost its force since 1 January 2006 - Federal act N 107-FZ of 21 July 2005, - see the previous
wording.

  Sale of alcohol products from the excise-duty warehouse of one wholesale organization to the excise-duty
warehouse of another wholesale organization shall not be considered the object of taxation;

   6) sale by persons of confiscated and (or) unmanaged goods liable to excise duty, goods liable to excise duty
refused in favour of the state, which are to be converted into the state or municipal ownership, transferred thereto on
the basis of sentences or verdicts of courts, courts of arbitration or other state authorities empowered thereto;
  7) transfer by persons of goods liable to excise duty produced by them from give-and-take taw materials (materials)
on the territory of the Russian Federation, except operations on transfer of oil products, to the owner of these raw
materials (materials) or other persons, including obtaining of the above goods liable to excise duty in ownership for the
account of payment for the services on manufacturing of the goods liable to excise duty from the give-and take
materials;

   8) transfer of manufactured goods liable to excise duty (except oil products) within the organizational structure for
further manufacturing of goods that are not liable to excise duty, except for operations specified in subclauses 2 and 3
of clause 1 of article 183 of this Code;

   9) transfer on the territory of the Russian Federation of goods liable to excise duty by persons who produced them
(except oil products) for internal purposes;

   10) transfer on the territory of the Russian Federation by persons of goods liable to excise duty produced by them
(except oil products) to the authorized capital of the organizations, share trusts of cooperatives, as well as in the form
of a contribution under a contract of simple partnership (contract of joint activity);

   11) transfer on the territory of the Russian Federation by the organization (economic society or partnership) of
goods liable to excise duty produced by them (except oil products) to their participant (legal successor or heir), if he
exits (withdraws) from the organization (economic society or partnership), as well as transfer of goods liable to excise
duty (except oil products) produced under a contract of simple partnership (contract of joint activity) to the participant
(their legal successor or heir) of this contract in the case of separation of their share from the property staying in the
general ownership of the contract participants or division of this property (except for operations provided by subclause
4 of this clause);

  12) transfer of produced goods liable to excise duty to processing on a give-and-take basis (except oil products);

  13) importation of goods liable to excise duty into the customs territory of the Russian Federation;

  14) primary sale of goods liable to excise duty (except oil products) originating from the territory of the Republic of
Byelorussia and imported into the territory of the Russian Federation from the territory of the Republic of Byelorussia;

  15) subclause has lost its force since 1 January 2004 - Federal act No 117-FZ of 7 July 2003. - see the previous
wording;

  16) subclause has lost its force since 1 January 2004 - Federal act No 117-FZ of 7 July 2003. - see the previous
wording;

  17) subclause has lost its force since 1 January 2004 - Federal act No 117-FZ of 7 July 2003. - see the previous
wording;

  18) subclause has lost its force since 1 January 2004 - Federal act No 117-FZ of 7 July 2003. - see the previous
wording;

  19) subclause has lost its force since 1 January 2004 - Federal act No 117-FZ of 7 July 2003. - see the previous
wording.

  2. The clause has lost its force since 1 January 2004 - Federal act No 117-FZ of 7 July 2003. - See the previous
wording.

   3. For purposes of this chapter production shall include bottling of goods liable to excise duty performed as a part
of the general process of production of these goods in accordance with the requirements of state standards and (or)
other normative-technical documentation, which regulate the process of production of these goods and are approved
by empowered federal executive authorities, as well as any types of mixing goods in the places of storage and sale
thereof (except public catering organizations), as a result of which goods liable to excise duty appear.

   4. In the case of reorganization of an organization the rights and duties of payment of the excise duty shall be
delegated to its legal successor.
   (The article is in the wording enforced since 1 January 2003 by the Federal act No 110-FZ of 24 July 2002; as
amended by the Federal act No 191-FZ of 31 December 2002, - see the previous wording)
                      Article 183. Operations which are not subject to taxation
                                      (exempted from taxation)
  1. The following operations shall not be subject to taxation (shall be exempted from taxation):

   1) transfer of goods liable to excise duty by one structural subdivision of the organization, which is not an
independent taxpayer, to another similar structural subdivision of this organization for production of other goods liable
to excise duty (the subclause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29
December 2000; in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect
shall apply to relationships arising from 1 January 2002, - see the previous wording);

  2) the subclause has lost its force from 1 January 2006 - Federal act N 107-FZ of 21 July 2005, - see the previous
wording;

  3) the subclause has lost its force from 1 January 2006 - Federal act N 107-FZ of 21 July 2005, - see the previous
wording;

   4) sale of goods liable to excise duty (except oil products) placed under the customs procedure of export outside
the territory of the Russian Federation with the account of losses within the natural norms, as well as operations being
objects of taxation according to subclauses 2, 3 and 4 of clause 1 of article 182 of this Code, with oil products further
placed under the customs procedure of export.

  Exemption of the above mentioned operations from taxation shall be provided according to article 184 of this Code;
  (The subclause is in the wording enforced since 1 January 2003 by the Federal act No 110-FZ of 24 July 2002; as
amended by the Federal act No 191-FZ of 31 December 2002, - see the previous wording)

  5) sales of oil products by the taxpayer (the subclause has been added from 1 January 2003 by the Federal act No
110-FZ of 24 July 2002);
  ____________________________________________________________________
  Subclauses 5-12 of the previous wording shall be subclauses 6-13 respectively of the present wording from 1
January 2003 - Federal act N 110-FZ of 24 July 2002.
  ____________________________________________________________________

   6) primary distribution (transfer) of confiscated and (or) unmanaged goods liable to excise duty, goods liable to
excise duty which were refused from in favour of the state, and which are subject to transformation into the state and
(or) municipal property, to industrial processing under the control of customs and (or) fiscal agencies, or elimination;

  7) subclause has lost its force since 1 January 2004 - Federal act No 117-FZ of 7 July 2003. - see the previous
wording;

  8) subclause has lost its force since 1 January 2004 - Federal act No 117-FZ of 7 July 2003. - see the previous
wording;

  9) subclause has lost its force since 1 January 2004 - Federal act No 117-FZ of 7 July 2003. - see the previous
wording;

  10) subclause has lost its force since 1 January 2004 - Federal act No 117-FZ of 7 July 2003. - see the previous
wording;

  11) subclause has lost its force since 1 January 2004 - Federal act No 117-FZ of 7 July 2003. - see the previous
wording;

  12) subclause has lost its force since 1 January 2004 - Federal act No 117-FZ of 7 July 2003. - see the previous
wording;

  13) subclause has lost its force since 1 January 2004 - Federal act No 117-FZ of 7 July 2003. - see the previous
wording;

   13) subclause has been excluded since 1 January 2002 by the Federal act N 126-FZ of 8 August 2001 - see the
previous wording;
   14) subclause has been excluded since 1 January 2002 by the Federal act N 126-FZ of 8 August 2001 - see the
previous wording;

   15) subclause has been excluded since 1 January 2002 by the Federal act N 126-FZ of 8 August 2001 - see the
previous wording.

    2. Operations specified in clause 1 of this article shall not be subject to taxation (shall be exempted from taxation)
only in the case of keeping and in the presence of separate account of operation on production and distribution
(transfer) of these goods liable to excise duty (the clause is in the wording enforced from 1 January 2001 by the
Federal act No 166-FZ of 29 December 2000; in the wording enforced from 1 January 2004 by the Federal act No
117-FZ of 7 July 2003, - see the previous wording).

   3. Importation into the customs territory of goods liable to excise duty, which were refused from in favour of the
state, and which are subject to be transformed into the state and (or) municipal property shall not be subject to
taxation (shall be exempted from taxation).



                     Article 184. Specific features of exemption from taxation
               In the case of distribution of goods liable to excise duty outside the
                                Territory of the Russian Federation
   1. Operations provided by subclause 4 of clause 1 of article 183 of this Code shall be exempted from taxation only
in the case of exportation of goods liable to excise duty outside the territory of the Russian Federation within the
customs procedure of export.

    2. The taxpayer shall be exempted form payment of the excise duty in the case of distribution of goods liable to
excise duty, that were produced by them, (except oil products) and (or) transfer of goods liable to excise duty (except
oil products) manufactured from give-and-take raw materials, placed under the customs procedure of export, outside
the territory of the Russian Federation, if they submit to the fiscal agency a bank guarantee or warranty in accordance
with article 74 of this Code. This bank guarantee (warranty) must provide an obligation of the bank to pay the sum of
the excise duty and the respective penalties, if the taxpayer does not submit the documents confirming the fact of
export of goods liable to excise duty according to the procedure and within the terms established by clause 7 of article
198 of this Code, and non-payment by them of the excise duty and (or) penalties.

   In the absence of the bank guarantee (warranty) the taxpayer must pay excise duty according to the procedure
provided for operations of distribution of goods liable to excise duty on the territory of the Russian Federation.

   The taxpayer shall be exempted from payment of the excise duty charged on operations provided by subclauses 2-
4 of clause 1 of article 182 of this Code in the part of the excise duty referring to oil products, which are further placed
under the customs procedure of export, distributed outside the territory of the Russian Federation, in accordance with
the procedure provided by this article, in the submission to the fiscal agency of the bank guarantee according to article
74 of this Code or the bank warranty.

   This bank guarantee (warranty) must provide an obligation of the bank to pay the sum of the excise duty and the
respective penalties, if the taxpayer does not submit the documents confirming the fact of export of goods liable to
excise duty according to the procedure and within the terms established by clause 7 of article 198 of this Code, and
non-payment by them of the excise duty and (or) penalties.

   3. If the excise duty is paid because of absence of the bank guarantee (warranty) with the taxpayer, the paid sum
of the excise duty shall be subject to reimbursement after submission by the taxpayer of the documents confirming the
fact of export of the goods liable to excise duty to the fiscal agency.

  The sums of the excise duty shall be reimbursed according to the procedure provided by article 203 of this Code.
  (The article is in the wording enforced from 1 January 2003 by the Federal act No 110-FZ of 24 July 2002, with
amendments made by the Federal act No 191-FZ of 31 December 2002, - see the previous wording)



                Article 185. Specific features of taxation in movement of goods
         liable to excise duty across the customs territory of the Russian Federation
  1. When goods liable to excise duty are imported into the customs territory of the Russian Federation, taxation shall
be carried out depending on the selected customs procedure according to the following order:

   1) when goods liable to excise duty are released for free circulation and when they are placed under the customs
procedure of processing for internal consumption and free customs zone, the excise duty shall be paid in full volume
(the subclause is in the wording enforced from 1 January 2006 by the Federal act No 117-FZ of 22 July 2005, - see
the previous wording);

   2) when goods liable to excise duty are placed under the customs procedure of re-import, the taxpayer shall pay
sums of the excise duty, from which they were exempted, or which were returned to them relating to export of goods
in accordance with this Code, according to the procedure provided by the RF customs legislation (the subclause is in
the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000);

  3) when goods liable to excise duty are placed under the customs procedure of transit, customs warehouse, re-
export, tax free trade, free customs zone, free warehouse, elimination and refusal in favour of the state, the excise
duty shall not be paid (the subclause is in the wording enforced from 1 January 2006 by the Federal act No 117-FZ of
22 July 2005, - see the previous wording);

   4) when goods liable to excise duty are placed under the customs procedure of processing on the customs
territory, excise duty shall not be paid, if the products of processing are exported within a certain period of time. When
products of processing are released for free circulation, excise duty shall be paid in full volume with the account of
provisions established by the RF Customs Code (the subclause is in the wording enforced from 1 January 2004 by the
Federal act No 61-FZ of 28 May 2003, - see the previous wording);

   5) when goods liable to excise duty are placed under the customs procedure of temporary warehouse, full or partial
exemption from payment of the excise duty shall be applied according to the procedure provided by the RF customs
legislation (the subclause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29
December 2000).

  2. When goods liable to excise duty are exported from the customs territory of the Russian Federation, taxation
shall be provided according to the following procedure:

  1) when goods are exported under the customs procedure of export outside the customs territory of the Russian
Federation, excise duty shall not be paid with the account of article 184 of this Code or paid sums of the excise duty
shall be returned (set off) by fiscal agencies of the Russian Federation according to the procedure provided by this
Code (the subclause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December
2000).

   The procedure specified in this subclause shall be applied in the case of placement of goods under the customs
procedures of the customs warehouse for purposes of their subsequent exportation of these goods according to the
customs procedure of export and also in the case of placement of goods under the customs procedure of free
customs zone (the paragraph is in the wording enforced from 1 January 2006 by the Federal act No 117-FZ of 22 July
2005, - see the previous wording);

   2) when goods are exported under the customs procedure of re-export outside the customs territory of the Russian
Federation, sums of the excise duty paid at importation into the customs territory of the Russian Federation shall be
returned to the taxpayer according to the procedure provided by the customs legislation of the Russian Federation
(the subclause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000);

   3) when goods liable to excise duty are exported outside the customs territory of the Russian Federation under
other customs procedures than those specified in clauses 1 and 2 of this clause, exemption from payment of excise
duty and (or) return of paid sums of the excise duty shall not be provided, unless otherwise provided by the RF
customs legislation (the subclause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29
December 2000).

  3. When goods liable to excise duty, which are intended for personal, household, family and other purposes not
connected with entrepreneurial activity are moved by natural persons, the procedure for payment of the excise duty in
connection with the movement of the goods across the RF customs border shall be determined in accordance with the
RF Customs Code (the clause is in the wording enforced from 1 January 2004 by the RF Customs Code No 61-FZ of
28 May 2003, - see the previous wording).
         Article 186. Specific features of collection of excise duty for goods liable
     To excise duty, which are moved across the RF customs border, in the absence of
                         Customs control and customs clearance
                         (the title of the article is in the wording enforced from 1 January 2001
                                   by the Federal act No 166-FZ of 29 December 2000)

   1. If according to an international contract of the Russian Federation with a foreign state customs control and
customs clearance of goods moved across the customs border of the Russian Federation are cancelled, the
procedure for collection of the excise duty on goods liable to excise duty originating from such a state or released for
free circulation on the territory thereof and imported into the territory of the Russian Federation shall be established by
the RF Government (the subclause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of
29 December 2000).

   2. In case of exportation of goods liable to excise duty from the territory of the Russian Federation into the territory
of foreign states specified in clause 1 of this article, the procedure of confirming the right for exemption from payment
of the excise shall be established by the RF Government, as well as on the basis of bilateral agreements with the
governments of the stated foreign states (the clause is in wording enforced since 1 January 2001 by the Federal law N
166-FZ from 29 December 2000).



                   Article 187. Determining taxable base in distribution (transfer)
                              Or receipt of goods liable to excise duty
                         (the title of the article is in the wording enforced from 1 January 2003
                                      by the Federal act No 110-FZ of 24 July 2002, -
                                                   see the previous wording)

  1. Taxable base shall be determined separately for each type of the product liable to excise duty.

   2. In the case of distribution (transfer considered the object of taxation according to this chapter) of goods liable to
excise duty manufactured by the taxpayer, the taxable base shall be determined subject to the tax rates established
referring to these goods:

   1) as the volume of distributed (transferred) goods liable to excise duty in kind - for goods liable to excise duty
referring to which hard (specific) tax rates have been established (in the absolute sum per a unit of measurement);

   2) as the cost of distributed (transferred) goods liable to excise duty) calculated basing on the prices determined
with the account of the provisions of article 40 of this Code, without the account of the excise duty, the value-added
tax - for goods liable to excise duty referring to which ad valorem (in %) tax rates have been established (the
subclause is in the wording enforced since 1 January 2001 by the Federal act No 166-FZ of 29 December 2000; in the
wording enforced from 1 January 2004 by the Federal act No 117-FZ of 7 July 2003, - see the previous wording);

   3) as the cost of transferred goods liable to excise duty calculated basing on the average sales prices that were
effective in the previous tax period, and in the absence thereof basing on the market prices without the excise duty,
the value-added tax - for goods liable to excise duty referring to which ad valorem (in %) tax rates have been
established. Similar procedure shall be used to determine taxable base for goods liable to excise duty referring to
which ad valorem tax rates are established, if they are distributed on a gratuitous basis, in the case of commodity
exchange (barter) operations, as well as if goods liable to excise duty are transferred under an agreement on smart-
money or novation contract and in the case of transfer of goods liable to excise duty as payment in kind (the
subclause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000; in the
wording enforced from 1 January 2004 by the Federal act No 117-FZ of 7 July 2003, - see the previous wording).

  3. Taxable base for objects of taxation specified in subclauses 2 and 3 of clause 1 of article 182 of this Code shall
be determined as the volume of obtained (credited) oil products in kind (the clause has been added since 1 January
2003 by the Federal act No 110-FZ of 24 July 2002, with amendments made by the Federal act No 191-FZ of 31
December 2002).
  Taxable base for the object of taxation specified in subclauses 4 of clause 1 of article 182 of this Code shall be
determined as the volume of transferred oil products in kind (the clause has been added since 1 January 2003 by the
Federal act No 110-FZ of 24 July 2002, with amendments made by the Federal act No 191-FZ of 31 December 2002).
  ________________________________________________________
  Clause 3 of the previous wording shall be clause 4 of the present wording - Federal act No 110-FZ of 24 July 2002.
  ________________________________________________________

   4. In the case of selling confiscated and (or) unmanaged goods liable to excise duty, that were refused from in
favour of the state, and which are subject to be transformed into the state or municipal property, as well as in case of
primary distribution of goods liable to excise duty originating and imported from the territory of the Republic of
Byelorussia, taxable base shall be determined according to subclauses 1 and 2 of clause 2 of this article (the clause is
in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000; in the wording
enforced from 1 January 2003 by the Federal act No 110-FZ of 24 July 2002, - see the previous wording).

   4. Clause 4 shall be excluded from 1 January 2003 by the Federal act No 110-FZ of 24 July 2002. - See the
previous wording.

   5. When determining the taxable base, the taxpayer’s receipt drawn in foreign currency shall be recalculated into
the currency of the Russian Federation at the rate of the RF Central Bank effective as of the date of distribution of the
goods liable to excise duty (the clause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ
of 29 December 2000).

   6. Funds obtained by the taxpayer, which are not related to distribution of goods liable to excise duty shall not be
included in the taxable base.

   7. The taxable base shall be determined as a volume of the received denaturized ethyl alcohol in natural state to
the taxation object specified in subclause 20 of clause 1 of article 182 of this Code, (the has been added since 1
January 2006 by the Federal act N 107-FZ of 21 July 2005).




                          Article 188. Determining the tax base in realization
                                  of raw materials liable to excise duty
                        (the article shall be considered to lost there force from 1 January 2004 -
                                      by the Federal act N 117-FZ on 7 July 2003. -
                                                 See the previous wording)


                                  Article 189. Increase of the tax base in
                                 realization of goods liable to excise duty
                          (name of the article is in the wording enforced from 1 January 2004,
                                     by the Federal act N 117-FZ on 7 July 2003, -
                                                see the previous wording)

   1. Tax base determined in accordance with articles 187-188 of this Code shall be increased by the sums received
for realized goods liable to excise duty in the form of financial aid, advance or other payments, received for the
account of payment of future supplies of goods liable to excise duty and (or) raw material liable to excise duty, for
which date of realization shall be determined in accordance with clause 1 of article 195 of this Code for replenishment
of the special fund, for increase of incomes, in the form of interest (discount) on promissory notes, interest on a
commodity credit or otherwise connected with payment of goods liable to excise duty (the clause the clause has been
added 10 September 2001 by the Federal law N 118-FZ from 7 August 2001; is in the wording enforced from 1
January 2004, by the Federal act N 117-FZ on 7 July 2003, - see the previous wording).

   2. Provisions of clause 1 of this article shall be applied to operations on realization of goods liable to excise duty,
with respect to which advalorem (in percentage terms) tax rates have been established (the clause is in the wording
enforced from 1 January 2004, by the Federal act N 117-FZ on 7 July 2003, - see the previous wording).

  3. Sums stated in this article, drawn in foreign currency shall be recalculated into the currency of the Russian
Federation at the RF Central Bank rate which is effective as of the date of their actual drawing.
                 Article 190. Specific features of determining taxable base
 In case of performance of operations with goods liable to excise duty, using various tax
                                             rates
  1. The taxable base referring to goods liable to excise duty, for which various tax rates are established, shall be
determined relatively to each tax rate.

  2. If taxpayer does not keep separate accounting provided by clause 1 of this article, uniform taxable base is
determined for all the operations of distribution (transfer) and (or) obtaining of goods liable to excise duty. The sums
specified in clause 1 of article 189 of this Code shall be included in this taxable base (except the taxable base for
operations with oil products liable to excise duty, which are considered the object of taxation according to this
chapter).
  (The article is in the wording enforced since 1 January 2003 by the Federal act No 110-FZ of 24 July 2002, with
amendments made by the Federal act No 191-FZ of 31 December 2002, - see the previous wording)



             Article 191. Determining the tax base in importation of goods liable to
                excise duty into the customs territory of the Russian Federation
  1. In importation of goods liable to excise duty (taking into account provisions of article 185 of this Code into the
customs territory of the Russian Federation, the tax base shall be determined:

  1) for goods liable to excise duty, with respect to which fixed (specific) tax rates (in absolute amount per a unit of
measurement) have been established - as the volume of imported goods liable to excise duty in kind;

   2) for goods liable to excise duty, with respect to which advalorem (in percentage terms) tax rates have been
established, - as an amount:

  of their customs value;

  of payable customs duty.

  2. The customs value of goods liable to excise duty, as well as payable customs duty shall be determined in
accordance with this Code (the clause is in wording enforced since 1 January 2001 by the Federal law N 166-FZ from
29 December 2000);

   3. The tax base shall be determined separately for each lot of goods liable to excise duty, imported into the
customs territory of the Russian Federation (the clause is in wording enforced since 1 January 2001 by the Federal
law N 166-FZ from 29 December 2000).

   If one lot of goods liable to excise duty, imported into the customs territory of the Russian Federation includes
goods liable to excise duty, import of which is taxed at different tax rates, the tax base shall be determined separately
with respect to each group of these goods. Similar procedure shall be applied to determining the tax base, if a lot of
goods liable to excise duty, imported into the customs territory of the Russian Federation includes goods liable to
excise duty that were previously exported from the customs territory of the Russian Federation for processing outside
the customs territory of the Russian Federation.

   4. In case of importation into the customs territory of the Russian Federation of goods liable to excise duty being
products of processing outside the customs territory of the Russian Federation, the tax base shall be determined in
accordance with the provisions of this chapter.

   5. The taxable base in case of importation into the other part of customs territory of the Russian Federation of
Russian goods placed under a customs procedure of free customs zone, or in case of their transfer within the territory
of specific economic zone to the persons who are non-residents of such zone, shall be determined according to
clause 1 of this article (the clause has been added since 1 January 2006 by the Federal act N 117-FZ of 22 July
2005).
                                            Article 192. Tax period
   The tax period shall be recognized as calendar month.
   (The article is in the wording enforced from 1 January 2003 by the Federal act N 110-FZ of 24 July 2002, - see the
previous wording)



                                              Article 193. Tax rates
     1.Excise tax shall be imposed to appropriate goods at the following tax rates:

           Types of goods subject to excise                  Tax rate (in per cents and (or) in Roubles and
                                                                  copecks per a unit of measurement
                             1                                                      2
    Ethyl alcohol produced of all types of raw               21 Roubles and 50 copecks per a liter of water
 materials (including raw ethyl alcohol produced of all   free ethyl alcohol
 types of raw materials)
    Alcohol products with ethyl alcohol volume share         159 Roubles and 00 copecks per a liter water
 above 25 per cent (except for wines) and alcohol         free ethyl alcohol contained in the goods subject to
 containing products                                      excise
    Alcohol products with ethyl alcohol volume share         118 Roubles and 00 copecks per one liter of
 above 9 up to 25 per cent inclusively (except for        water free ethyl alcohol contained in the goods
 wines)                                                   subject to excise
    Alcohol products with ethyl alcohol volume share         83 Roubles and 00 copecks per one liter of
 up to 9 per cent inclusively (except for wines)          water free ethyl alcohol contained in the goods
                                                          subject to excise
   Wines (except for natural ones,            including      112 Roubles and 00 copecks per one liter of
 champagnes, sparkling, aerated, fizz)                    water free ethyl alcohol contained in the goods
                                                          subject to excise
    Champagnes, sparkling, aerated, fizz wines               2 Roubles and 20 copecks per one liter
    Natural wines (except for champagnes, sparkling,         10 Roubles and 50 copecks per one liter
 aerated, fizz wines)
    Beer with the normative (standardized) ethyl            0 Roubles and 00 copecks per one liter
 alcohol volume share up to 0.5 per cent inclusively
    Beer with the normative (standardized) ethyl            1 Roubles and 91 copecks per one liter
 alcohol volume share above 0.5 up to 8.6 per cent
 inclusively
    Beer with the normative (standardized) ethyl            6 Roubles and 85 copecks per one liter
 alcohol volume share above 8.6 per cent
    Tobacco goods:
    Pipe tobacco                                            676 Roubles and 00 copecks per one kilo
    Smoking tobacco except for the tobacco used as          277 Roubles and 00 copecks per one kilo
 raw material in manufacturing of tobacco goods
    Cigar                                                   16 Roubles 35 copecks per each
    Cigarill                                                200 Roubles and 00 copecks per 1000 items
    Cigarette with philter                                  78 Roubles and 00 copecks per 1000 items + 8
                                                          per cents, but 25 per cent of selling price, at least*
    ________________
    * cost of sold (handed over) cigarettes, estimated proceeding from prices determined with the view of
 provisions of Article 40 of this Code less excise and value added tax shall be recognized by selling price.

    Cigarettes without philter                               35 Roubles and 00 copecks per 1000 items + 8
                                                          per cent, but at least 25 per cent of the selling
                                                          price*
    ________________
    * cost of sold (handed over) cigarettes, estimated proceeding from prices determined with the view of
 provisions of Article 40 of this Code less excise and value added tax shall be recognized by selling price.

   Cars with engine power up to 67.5 kWt (90 horse          0 Roubles and 00 copecks per 0.75 kWt (1
 power)                                                   horse power)
    Cars with engine power above 67.5 up to 112.5           16 Roubles and 50 copecks per 0.75 kWt (1
 kWt (150 horse power) inclusively                        horse power)
    Cars with engine power above 112.5 kWt (150             167 Roubles and 00 copecks per 0.75 kWt (1
 horse power), motorcycles with engine power above horse power)
 112.5 kWt (150 horse power)
    motor car petrol with octane number up to "80”          2,657 Roubles and 00 copecks per one ton
 inclusively
    Motor car petrol with other octane numbers              3,629 Roubles and 00 copecks per one ton
    Diesel fuel                                             1,080 Roubles and 00 copecks per one ton
    Oil for diesel and (or) carburetor (injector) engines   2,951 Roubles and 00 copecks per one ton
    Straight-run petrol                                     2,657 Roubles and 00 copecks per one ton
(The clause is in the wording enforced from 1 January 2006 by the Federal act N 107-FZ of 21 July 2005. - See the
previous wording)

  2. The clause has lost there force since 1 January 2006 - Federal act N 107-FZ of 21 July 2005. - See the previous
wording.

  3. The clause has lost there force since 1 January 2006 - Federal act N 107-FZ of 21 July 2005. - See the previous
wording.



                      Article 194. Procedure for calculation of the excise duty
                              (the title is in n the wording enforced from 1 January 2001
                                 by the Federal act No 166-FZ of 29 December 2000)

   1. The sum of the excise duty on goods liable to excise duty (as well as those imported into the territory of the
Russian Federation) referring to which hard (specific) tax rates are established shall be calculated as a product of the
corresponding tax rate and the taxable base calculated according to articles 187-191 of this Code (the clause is in the
wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000; in the wording enforced
from 1 January 2002 by the Federal act No 126-FZ of 8 August 2001, - see the previous wording).

   2. The sum of the excise duty on goods liable to excise duty (as well as those imported into the territory of the
Russian Federation) referring to which ad valorem (in %) tax rates are established shall be calculated as the
percentage share of the taxable base determined according to articles 187-191 of this Code, corresponding to the tax
rate (the clause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000;
in the wording enforced from 1 January 2003 by the Federal act No 110-FZ of 24 July 2002; in the wording enforced
from 1 January 2004 by the Federal act No 117-FZ of 7 July 2003, - see the previous wording).

   3. The sum of the excise duty on goods liable to excise duty (as well as those imported into the territory of the
Russian Federation) referring to which combined tax rates (consisting of the ad valorem (in %) and hard (specific) tax
rates) are established shall be calculated as the sum obtained as a result of addition of the sums of the excise duty
calculated as the product of the hard (specific) tax rate and the volume of distributed (transferred, imported) goods
liable to excise duty in kind and as the percentage share of the cost of these goods (the sum obtained as a result of
adding the customs value and the customs duty to be paid), corresponding to the ad valorem (in %) tax rate (the
clause has been added from 1 January 2003 by the Federal act No 110-FZ of 24 July 2002; in the wording enforced
from 1 January 2004 by the Federal act No 117-FZ of 7 July 2003, - see the previous wording).
   ___________________________________________________________________
   Clauses 3-6 of the previous wording shall be clauses 4-7 of the present wording respectively since 1 January 2003
- Federal act No 110-FZ of 24 July 2002, with amendments made by the Federal act No 191-FZ of 31 December
2002.
   ___________________________________________________________________

   4. The total sum of the excise duty in the case of operations with goods liable to excise duty considered being the
object of taxation represents a sum obtained as a result of addition of the sums of the excise duty calculated
according to clauses 1 and 2 of this article for each type of the product liable to excise duty taxed by means of the
excise duty at various tax rates. The total sum of the excise duty in the case of operations with oil products liable to
excise duty considered being the object of taxation shall be determined separately from the sum of excise duty on
other goods liable to excise duty (the clause has been added from 1 January 2003 by the Federal act No 110-FZ of 24
July 2002; with amendments made by the Federal act No 191-FZ of 31 December 2002, - see the previous wording).
    5. The sum of the excise duty on goods liable to excise duty shall be calculated according to the results of each tax
period referring to all operations of distribution of goods liable to excise duty, the date of distribution (transfer) of which
refers to the corresponding tax period, as well as with the account of all changes increasing or reducing the tax base
in the respective tax period (the clause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ
of 29 December 2000; in the wording enforced from 1 January 2003 by the Federal act No 110-FZ of 24 July 2002; in
the wording enforced from 1 January 2004 by the Federal act No 117-FZ of 7 July 2003, - see the previous wording).

   6. The sum of the excise duty in the case of importation into the territory of the Russian Federation of several types
of goods liable to excise duty (except oil products) taxed by means of the excise duty at various tax rates, represents
the sum obtained as a result of addition of the sums of the excise duty calculated for each types of these goods
according to clauses 1-3 of this article (the clause is in the wording enforced from 1 January 2001 by the Federal act
No 166-FZ of 29 December 2000; in the wording enforced from 1 January 2003 by the Federal act No 110-FZ of 24
July 2002; - see the previous wording).

   7. If taxpayers do not keep separate accounting provided by clause 1 of article 190 of this Code, the sum of the
excise duty on goods liable to excise duty shall be determined basing on the maximum tax rate of the uniform taxable
base, from those applied by the taxpayer, determined on all the operations taxed by means of the excise duty (the
clause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000).



                       Article 195. Determining the date of distribution (transfer)
                                Of receipt of goods liable to excise duty
                                 (the title is in the wording enforced from 1 January 2004
                        by the Federal act No 117-FZ of 7 July 2003, - see the previous wording).

  1. The clause has lost its force from 1 January 2004 - Federal act No 117-FZ of 7 July 2003. - See the previous
wording.

   2. For purposes of this chapter the date of distribution (transfer) of goods liable to excise duty shall be determined
as the date of shipment (transfer) of the respective goods liable to excise duty.

   For purposes of this chapter, for operations specified in subclause 2 of clause 1 of article 182 of this Code, the date
of performance of the operation shall be the date of crediting of the manufactured oil products.

  For operations specified in subclause 3 of clause 1 of article 182 of this Code, the date of receipt of oil products
shall be the date of performance of the corresponding operation.

   For operations specified in subclause 4 of clause 1 of article 182 of this Code, the date of transfer shall be the date
of signing the report of acceptance and transfer of oil products.

  3. The clause has lost its force from 1 January 2004 - Federal act No 117-FZ of 7 July 2003. - See the previous
wording.

  4. In case of detection of shortage of the excisable goods the date of selling (transfer) thereof shall be determined
as the date of detection of shortage (except for the cases of shortage within the limits of the norms of natural loss
approved by authorized federal executive agency) (the clause is in the wording enforced from 1 January 2006 by the
Federal act N 107-FZ of 21 July 2005, - see the previous wording).

  When finding out deficit of the above mentioned products, the date of distribution (transfer) thereof shall be
determined as the date of finding out the deficit (except for the cases of deficit within the norms of natural loss
approved by the empowered federal executive authority)
  (The article is in the wording enforced since 1 January 2003 by the Federal act No 110-FZ of 24 July 2002, with
amendments made by the Federal act No 191-FZ of 31 December 2002, - see the previous wording)




                   Article 196. Tax procedures with respect to alcoholic products
                                  (the article has lost there force since 1 January 2006 -
                                          Federal act N 107-FZ of 21 July 2005, -
                                                 see the previous wording).
                                   Article 197. Tax warehouse procedure
                                 (the article has lost there force since 1 January 2006 -
                                         Federal act N 107-FZ of 21 July 2005, -
                                                see the previous wording).




                                             Article 197_1. Tax posts

  1. By the decision of the head of the fiscal agency the fiscal agency shall have the right to create permanent tax
posts (hereinafter referred to as tax posts) at the taxpayer.

   2. For purposes of this chapter the tax post shall mean a complex of tax control measures and events provided by
tax agencies, which issued a certificate, in order to inspect correctness of c calculation and payment of taxes and
fees.

   Organization of the tax post is provided on the basis of the decision of the head of the fiscal agency that issued the
certificate.

   At a written request of the fiscal agency the taxpayer must provide premises with restricted access equipped with
software and technical devices, which allow to collect and systematize information for purposes of taxation according
to the forms established by the RF Ministry of finance. On the basis of the decision of the head of the fiscal agency,
workers of fiscal agencies which carry out events specified in clause 2 of this article shall also have the right of access
to administrative, production, warehouse and other premises on the territory of organizations carrying out production
and (or) distribution of oil products and (or) processing of straight-run petrol (the paragraph is in the wording enforced
since 2 August 2004 by the Federal act N 58-FZ on 29 June 2004; is supplemented since 1 January 2006 by the
Federal act N 107-FZ of 21 July 2005, - see the previous wording).

  3. Tax posts shall perform the following functions:

  1) provision of control over compliance of the volumes of raw materials which arrived for production of oil products
and (or) production of oil-chemistry with actual volumes of oil products produced from these raw materials (the
subclause is supplemented since 1 January 2006 by the Federal act N 107-FZ of 21 July 2005, - see the previous
wording);

   2) provision of control over compliance of the volumes of actual production and distribution of oil products with the
record data of the taxpayer and data shown by the taxpayer in tax declarations;

   3) comparing volumes of distribution of oil products based on accounting and accounts of the taxpayer with the
volumes of actually shipped lots of oil products;

   4) comparing compliance of actual remainders of oil products staying in the warehouse premises and (or) tanks of
the taxpayer with the accounting data of the taxpayer;

  5) inspection of certificates presented by the buyer (s) of oil products, including those requested by the taxpayer,
where the tax post was created.

   4. In the case of performing functions specified in clause 3 of this article, workers of fiscal agencies shall not have
the right to interfere in the operative-economic activity of the taxpayer. In the case of infringement of this provision
these workers of fiscal agencies shall bear administrative, criminal and other responsibility in accordance with the
procedure established by the RF legislation.

   5. The procedure for functioning of permanent tax posts shall be determined by the RF Ministry of finance. (the
clause is in the wording enforced since 2 August 2004 by the Federal act N 58-FZ on 29 June 2004, - see the
previous wording).
   (The article has been added since 1 January 2003 by the Federal act No 110-FZ of 24 July 2002 with amendments
made by the Federal act No 191-FZ of 31 December 2002)
               Article 198. Sum of excise duty presented by the seller to the buyer
   1. Taxpayer performing operations considered the object of taxation according to this chapter, except operations
with oil products provided by subclauses 2 and 3 of clause 1 of article 182 of this Code and also operations for selling
of the denaturized ethyl alcohol to the taxpayer having the certificate on manufacture of the not alcohol-containing
production, must present certain sum of the excise duty to the buyer of the goods liable to excise duty (owner of the
give-and-take raw materials (materials) for payment (the clause is in the wording enforced from 1 January 2004 by the
Federal act No 117-FZ of 7 July 2003; is supplemented since 1 January 2006 by the Federal act N 107-FZ of 21 July
2005, - see the previous wording).

   2. In the settlement documents including registries of receipts for obtaining funds from the letters of credit, primary
accounting documents and invoices the corresponding sum of the excise duty is presented as one line, except the
cases of distribution of goods liable to excise duty outside the territory of the Russian Federation and except the cases
of distribution of oil products (the clause is in the wording enforced from 1 January 2004 by the Federal act No 117-FZ
of 7 July 2003, - see the previous wording).

   3. In the case of distribution of goods liable to excise duty, where the distribution operations are exempted from
taxation according to article 183 of this Code, the settlement documents primary accounting documents and invoices
are made without specifying the corresponding sums of the excise duty. These documents shall bear a stamp
“Without excise duty” (the clause is in the wording enforced from 1 January 2004 by the Federal act No 117-FZ of 7
July 2003, - see the previous wording).

  4. In the case of retail distribution (transfer) of goods liable to excise duty (except oil products), the corresponding
sum of excise duty shall be included in the price of the goods. The respective sum of the excise duty shall not be
specified on the labels of the goods and price lists put out by the seller, as well as receipts and other documents given
out to the buyer.

  5. The following procedure shall apply in the case of performance of operations with oil products liable to excise
duty:

  1) when oil products are distributed, the sum of the excise duty calculated by the taxpayer in accordance with
subclauses 2 and 3 of clause 1 of article 182 of this Code shall not be specified in settlement documents and invoices;

   2) when oil products are transferred to persons who do not have a certificate, the sum of the excise duty calculated
by the taxpayer according to subclause 4 of clause 1 of article 182 of this Code shall be presented for payment to the
owner of the give-and-take raw materials and materials. In the settlement documents and invoices the corresponding
sum of the excise duty shall be specified as a separate line.

   6. When goods liable to excise duty are imported into the customs territory of the Russian Federation,
corresponding completed customs forms and settlement documents certifying the fact of payment of the excise duty
shall be used as control documents to establish feasibility of tax deductions.

   7. When goods liable to excise duty are exported outside the territory of the Russian Federation under the customs
procedure of export, the following documents shall without fail be submitted to the fiscal agency at the place of
registration of the taxpayer to confirm feasibility of exemption from payment of the excise duty and tax deductions
within 180 days following the date of distribution of the above mentioned goods:

   1) contract (copy of the contract) of the taxpayer with the counteragent for supply of goods liable to excise duty. If
supply of goods liable to excise duty for export is provided under a contract of commission, order or agency, the
taxpayer shall submit to fiscal agencies the contract of commission, order or agency (copies of these contracts) and
the contract (copy of the contract) of the person carrying out supply of the goods liable to excise duty for export by the
order of the taxpayer (in accordance with the contract commission, order or agency) with the counteragent.

   If export of goods liable to excise duty produced from give-and-take raw materials is provided by the owner of the
give-and-take raw materials, the taxpayer shall submit to the fiscal agencies the contract between the owner of the
goods liable to excise duty manufactured from give-and-take raw materials and the taxpayer for manufacturing of
goods liable to excise duty and the contract (copy of the contract) between the owner of the give-and-take raw
materials and the counteragent. This procedure shall also apply to export of oil products on which the excise duty was
charge according to subclause 4 of clause 1 of article 182 of this Code.
   If export of goods liable to excise duty produced from give-and-take raw materials is provided by another person
under a contract of commission or any other contract with the owner of the give-and-take raw materials, the taxpayer -
manufacturer of these goods from the give-and-take raw materials shall submit to the fiscal agencies, along with the
contract between the owner of the goods liable to excise duty manufactured from give-and-take raw materials and the
taxpayer for manufacturing of goods liable to excise duty, the contract of commission or agency (copies of these
contracts) between the owner of these goods liable to excise duty and the person carrying out their supply for export,
as well as the contract (copy of the contract) of the person carrying out supply of goods liable to excise duty for export
and the counteragent.

  This procedure shall also apply to export of oil products on which the excise duty was calculated according to
subclause 4 of clause 1 of article 182 of this Code;

   2) payment documents and extract of the bank (copies thereof), which confirm actual arrival of proceeds of
distribution of goods liable to excise duty to the foreign person to the taxpayer’s account in the Russian Bank.

   If supply for export of goods liable to excise duty is provided under a contract of commission, order or agency, the
taxpayer shall submit to the fiscal agencies payment documents and an extract of the bank (their copies), which
confirm actual arrival of the proceeds of distribution of the goods liable to excise duty to a foreign person to the
account of the commissioner (agent) in the Russian bank.

   If export of goods liable to excise duty produced from give-and-take raw materials and materials is carried out by
the owner of these goods, the taxpayer-manufacturer of these goods from give-and-take raw materials and materials
shall submit to the fiscal agencies payment documents and extract of the bank (copies thereof), which confirm actual
arrival of the whole proceeds of distribution of the goods liable to excise duty to a foreign person, to the account of the
owner of the goods liable to excise duty manufactured from give-and-take raw materials and materials in the Russian
bank.

   When proceeds of distribution of the goods liable to excise duty to the foreign person arrive to the account of the
taxpayer or owner of these goods liable to excise from the third party, the contracts of commission for payment for
exported goods liable to excise duty, made between the foreign person and the organization (person) which
performed payment shall be submitted along with the payment documents and the extract of the bank (copies thereof)
to fiscal agencies.

   If currency proceeds of distribution of goods liable to excise duty to the territory of the Russian Federation is not
credited according to the procedure provided by the RF currency legislation, the taxpayer shall submit to the fiscal
agencies documents (copies thereof) confirming the right for non-crediting the currency proceeds to the territory of the
Russian Federation (the paragraph is in the wording enforced since 31 July 2005 by the Federal act N 90-FZ of 18
July 2005, - see the previous wording);

   3) the cargo customs declaration (copy thereof) with notes of the Russian customs agency, which released the
goods under the customs procedure of export, and the Russian customs agency in whose activity region the crossing
point is located, where the goods were exported outside the customs territory of the Russian Federation (hereinafter
referred to as border customs agency).

   When oil products are exported outside the territory of the Russian Federation by pipeline transport under the
customs procedure of export, a full cargo customs declaration with notes of the Russian customs agency which
carried out customs clearance of these oil products shall be submitted.

  When oil products are exported under the customs procedure of export across the border of the Russian
Federation with a state - member of the Customs union, where customs control is cancelled, a cargo customs
declaration shall be submitted to the third parties with notes of the Russian customs agency which carried out
customs clearance of these oil products;

    4) copies of transport or consignment documents or other documents with notes of Russian border customs
bodies, confirming exportation of goods outside the customs territory of the Russian Federation, except exportation of
oil products under customs procedure of export across the RF border (the paragraph is in the wording enforced from 1
January 2004 by the Federal act No 117-FZ of 7 July 2003, - see the previous wording).

  Copies of the following documents shall be submitted by the taxpayer to the fiscal agencies in order to confirm
exportation of goods outside the customs territory of the Russian Federation in the case of exportation of oil products
under the customs procedure of export via sea ports:
   Shipment order for exported oil products specifying the port of unloading with the note “Loading permitted” made by
the border customs body;

  The bill of lading for transportation of exported oil products, where column “Port of unloading” includes the place
outside the customs territory of the Russian Federation.

  Copies of transport, consignment and (or) other documents confirming exportation of oil products outside the
customs territory of the Russian Federation may not be submitted in the case of exportation of oil products under the
customs procedure of export by pipeline transport.

   When exporting oil products under the customs procedure of export in railway tanks, in order to confirm exportation
of the goods outside the customs territory of the Russian Federation, the taxpayer should submit to fiscal agencies
copies of transport, consignment and (or) other documents confirming exportation of oil products outside the customs
territory of the Russian Federation with the notes of the border customs body.

  When exporting goods under the customs procedure of export across the RF border with a state-member of the
Customs union, where customs control is cancelled, copies of transport and consignment documents shall be
submitted with the notes of the Russian customs agency carrying out customs clearance of the above mentioned
exportation of goods.

   If the taxpayer submits subsequently to the fiscal agency documents (copies thereof) explaining exemption from
taxation, paid sums of the tax are to be reimbursed to the taxpayer according to the procedure and on terms provided
by article 203 of this Code.

   8. In the case of non-submission or submission not in full volume of the documents specified in clause 7 of this
article, confirming the fact of exportation of goods liable to excise duty outside the territory of the Russian Federation,
which should be submitted to the fiscal agencies at the place of location of the organization (place of residence of the
sole trader), excise duty on these goods shall be paid according to the procedure established by this chapter referring
to operations with goods liable to excise duty on the territory of the Russian Federation (the clause is in the wording
enforced from 1 January 2004 by the Federal act No 117-FZ of 7 July 2003, - see the previous wording).

   9. In case of selling of the denaturized ethyl alcohol the sum of the excise estimated by taxpayer according to
subclause 1 of clause 1 of article 182 of this Code, is not allocated in settlement documents and invoices. Thus the
inscription is made or the stamp " Without the excise " is put onto the specified documents.
   (The article is in the wording enforced since 1 January 2003 by the Federal act No 110-FZ of 24 July 2002, with
amendments made by the Federal act No 191-FZ of 31 December 2002, - see the previous wording).



                    Article 199. Procedure of assignment of sums of excise duty
                         (the title of the article is in the wording enforced from 1 January 2001
                                   by the Federal act No 166-FZ of 29 December 2000 )

   1. Sums of excise duty calculated by the taxpayer when selling goods liable to excise duty (except distribution on a
gratuitous basis) and presented to buyer shall be assigned to taxpayer’s expenditures to be deducted in calculation of
the tax on profit of organizations (the paragraph is in the wording enforced from 1 January 2001 by the Federal act No
166-FZ of 29 December 2000; in the wording enforced from 1 January 2002 by the Federal act No 110-FZ of 6
August 2001; in the wording enforced from 1 January 2004 by the Federal act No 117-FZ of 7 July 2003, - see the
previous wording).

   Sums of excise duty calculated by the taxpayer for operations of transfer of goods liable to excise duty, which are
considered to be object of taxation according to this chapter, as well as in the case of distribution thereof on a
gratuitous basis, shall be due to certain sources, which expenditures on the above mentioned goods liable to excise
duty are due to (the paragraph is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29
December 2000; in the wording enforced from 1 January 2004 by the Federal act No 117-FZ of 7 July 2003, - see the
previous wording).

   2. Sums of the excise duty presented by the taxpayer to the buyer in the case of distribution of goods liable to
excise duty shall be taken into account with the buyer in the cost of acquired goods liable to excise duty, unless
otherwise provided by clause 3 of this article (the paragraph is in the wording enforced from 1 January 2004 by the
Federal act No 117-FZ of 7 July 2003, - see the previous wording).
    Sums of the excise duty presented by the taxpayer to the owner of give-and-take raw materials (materials) (except
oil products) shall be assigned by the owner of give-and-take raw materials (materials) to the cost of goods liable to
excise duty produced from the above mentioned raw materials (materials) (except oil products), except for the cases
of transfer of goods liable to excise duty produced from give-and-take raw materials for further production of goods
liable to excise duty (the paragraph has been added to from 1 July 2002 by the Federal act N 57-FZ of 29 May 2002;
the effect shall apply to relations arising from 1 January 2002; added to from 1 January 2003 by the Federal act N
110-FZ of 24 July 2002; in the wording enforced from 1 January 2004 by the Federal act No 117-FZ of 7 July 2003, -
see the previous wording).
    (The clause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000)

   3. The sums of the excise duty to be paid in the case of importation into the customs territory of the Russian
Federation or presented to the owner of give-and-take raw materials (materials) in the case of transfer of the goods
liable to excise duty used as raw materials for production of other goods liable to excise duty shall not be taken into
account in the cost of goods liable to excise duty acquired, imported into the territory of the Russian Federation or
transferred on a give-and-take basis and shall be subject deduction or return in accordance with the procedure
provided by this chapter. This provision shall be applied if rates of excise duty for goods liable to excise duty used as
raw materials and rates of excise duty for goods liable to excise duty produced from these raw materials are
determined for similar unit of measurement of the taxable base (the clause is in the wording enforced from 1 July 2002
by the Federal act N 57-FZ of 29 May 2002; the effect shall apply to relations arising from 1 January 2002, - see the
previous wording).

  4. In the case of performance of operations with oil products liable to excise duty, the sum of the excise duty shall
be taken into account according to the following procedure:

   1) the sum of the excise duty calculated by the taxpayer on operations specified in subclause 2 of clause 1 of
article 182 of this Code shall be included in the cost of oil products liable to the excise duty. The sum of the excise
duty to be paid by the taxpayer calculated according to the procedure established by article 202 of this Code shall be
assigned by the taxpayer to expenditures to be deducted in calculation of the tax on profit of organizations;

   2) the sum of the excise duty calculated by the taxpayer on operations specified in subclause 4 of clause 1 of
article 182 of this Code shall be included by the owner of the oil products in the cost of oil products liable to the excise
duty. The sum of the excise duty to be paid by the taxpayer calculated according to the procedure established by
article 202 of this Code shall be assigned by the taxpayer to expenditures to be deducted in calculation of the tax on
profit of organizations;

   3) the sum of the excise duty calculated by the taxpayer on operations specified in subclause 3 of clause 1 of
article 182 of this Code, in the case of transfer of oil products liable to excise duty to the person having a license, or in
case of further usage by the taxpayer of the received straight-run petrol as a raw material for production of oil-
chemistry shall not be included in the cost of the transferred or used oil products liable to the excise duty. The sum of
the excise duty calculated by the taxpayer on operations specified in subclause 3 of clause 1 of article 182 of this
Code, in the case of transfer of oil products liable to excise duty to the person who does not have a license, or in case
of further non-usage by the taxpayer of the received straight-run petrol as a raw material for production of oil-
chemistry (except for a case of using straight-run petrol for manufacture of the other excisable oil products) shall be
included in the cost of transferred or unused oil products liable to the excise duty. The sum of the excise duty to be
paid by the taxpayer calculated according to the procedure established by article 202 of this Code shall be assigned
by the taxpayer to expenditures to be deducted in calculation of the tax on profit of organizations (the subclause is in
the wording enforced from 1 January 2006 by the Federal act N 107-FZ of 21 July 2005, - see the previous wording).

   The sums of the excise duty specified in subclauses 1-3 of this clause and assigned to expenditures to be
deducted in calculation of the tax on profit of organizations, in the event of submission of documents according to
clause 8 of article 201 of this Code and (or) clause 7 of article 198 of this Code respectively, shall be corrected for
purposes of taxation by means of the tax on profit of organizations and deducted according to article 200 and (or) 203
of this Code as of the date of submission of the above mentioned documents.
   (The clause has been added since 1 January 2003 by the Federal act No 110-FZ of 24 July 2002, with
amendments made by the Federal act No 191-FZ of 31 December 2002)



                                           Article 200. Tax deductions
  1. The taxpayer shall have the right o reduce the sum of the excise duty on goods liable to excise duty determined
according to article 194 of this chapter by the tax deductions established by this article (the clause is in the wording
enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000; in the wording enforced from 1
January 2003 by the Federal act No 110-FZ of 24 July 2002, - see the previous wording).

   2. The sums of the excise duty which are subject to deduction shall be those presented by buyers and paid by the
taxpayer when acquiring goods liable to excise duty (except oil products) or those paid by the taxpayer when
importing goods liable to excise duty (except oil products) into the customs territory of the Russian Federation,
released for free circulation, further used as raw materials for production of goods liable to excise duty (except oil
products) (the paragraph is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29
December 2000).

   In the case of irretrievable loss of the above mentioned goods liable to excise duty (except oil products) in the
course of storage, movement and further technological processing thereof, the sums of the excise duty shall also be
subject to deduction. In this case the sum of the excise duty to be deducted refers to the part of goods irretrievably
lost within the norms of natural loss approved by the empowered federal executive authority for certain group of goods
(the paragraph has been added from 1 January 2001 by the Federal act N 166-FZ of 29 December 2000).
   (The clause is supplemented since 1 January 2003 by the Federal act No 110-FZ of 24 July 2002, with
amendments made by the Federal act No 191-FZ of 31 December 2002, - see the previous wording)

   3. In the case of transfer of goods liable to excise duty produced from give-and-take raw materials (materials)
(except oil products), when the give-and-take raw materials (materials) are goods liable to excise duty, the sums of
the excise duty to be deducted shall be those paid by the owner of the give-and-take raw materials (materials) when
acquired, or those paid by them when importing these raw materials (materials) into the customs territory of the
Russian Federation, released for free circulation (except oil products), as well as sums of the excise duty paid by the
owner of these give-and-take raw materials (materials) (except oil products) when produced (the clause is in the
wording enforced since 1 January 2003 by the Federal act No 110-FZ of 24 July 2002, with amendments made by the
Federal act No 191-FZ of 31 December 2002, - see the previous wording).

   4. The sums of the excise duty which are subject to deduction shall be those paid on the territory of the Russian
Federation for ethyl alcohol produced from food raw materials, used for production of wine materials, further used for
production of alcohol products (the clause is in the wording enforced from 1 January 2001 by the Federal act N 166-
FZ of 29 December 2000).

   5. The sums of the excise duty which are subject to deduction shall be those paid by the taxpayer in the case of
return by the buyer of goods liable to excise duty (except oil products) (as well as return during the guarantee period)
or refusal thereof (the clause is in the wording enforced from 1 January 2001 by the Federal act N 166-FZ of 29
December 2000; added to from 1 January 2003 by the Federal act No 110-FZ of 24 July 2002, - see the previous
wording).

   6. The sums of the excise duty which are subject to deduction shall be sums of advance payments paid in
acquisition of excise duty labels for goods liable to excise duty which are subject to obligatory labeling (the clause has
been added to from 1 January 2001 by the Federal act N 166-FZ of 29 December 2000; is in the wording enforced
since 1 January 2006 by the Federal act N 107-FZ of 21 July 2005, - see the previous wording).

   7. The taxpayer shall have the right to reduce the total sum of the excise duty on goods liable to excise duty
determined according to article 194 of this Code by the sum of the excise duty calculated by the taxpayer on the basis
of sums of advance and (or) other payments obtained for the account of payments for future supplies of goods liable
to excise duty (the clause has been added from 10 September 2001 by the Federal act N 118-FZ of 7 August 2001; in
the wording enforced from 1 January 2004 by the Federal act N 117-FZ of 7 July 2003, - see the previous wording).

   8. The sums of the excise duty which are subject to deduction shall be those charged when oil products are
obtained by the taxpayer having a certificate for production and (or) certificate for wholesale distribution, and (or)
certificate for wholesale and retail distribution, when they are distributed (transferred) to the taxpayer having the
certificate (at submission of the documents according to clause 8 of article 201 of this Code).

  The sums of the excise duty charged by the taxpayer having a certificate for retail distribution of oil products, in the
part of the sums of the excise duty charged when oil products are obtained sent for retail distribution, shall not be
subject to deduction. For purposes of this chapter distribution of oil products shall mean release of oil products by
means of fuel filling stations.
  (The clause has been added since 1 January 2003 by the Federal act No 110-FZ of 24 July 2002)

  9. Sums of the excise duty charged by the taxpayer according to subclauses 2-4 of clause 1 of article 182 of this
Code shall be subject to deduction in the case of further use of the oil products liable to excise duty in production of
other oil products liable to excise duty, as well as in the case of bottling and (or) mixing (at submission of documents
according to clause 9 of article 201 of this Code) (the clause has been added since 1 January 2003 by the Federal act
No 110-FZ of 24 July 2002, with amendments made by the Federal act No 191-FZ of 31 December 2002).

  Sums of the excise duty charged by the taxpayer having the certificate for processing of straight-run petrol
according to subclauses 2-4 of clause 1 of article 182 shall be subject to deduction in the case of further use of this
petrol as a raw material for production of oil-chemistry (at submission of the documents according to clause 9 of article
201 of this Code (the paragraph has been added since 1 January 2006 by the Federal act N 107-FZ of 21 July 2005).

   10. Sums of the excise duty paid by persons having a certificate shall be subject to deduction, if oil products liable
to excise duty are imported into the customs territory of the Russian Federation (at submission of documents
according to clause 10 of article 201 of this Code) (the clause has been added since 1 January 2003 by the Federal
act No 110-FZ of 24 July 2002, with amendments made by the Federal act No 191-FZ of 31 December 2002).

   11. Sums of the excise duty charged at reception of the denaturized ethyl alcohol by the taxpayer having a
certificate for manufacture of the non-alcohol containing products shall be subject to deduction when using of the
denaturized ethyl alcohol (at submission of documents according to clause 11 of article 201 of this Code (the clause
has been added since 1 January 2006 by the Federal act N 107-FZ of 21 July 2005).

   12. Sums of the excise duty charged by the taxpayer having a certificate for manufacture of the denaturized ethyl
alcohol shall be subject to deduction in case of selling denaturized ethyl alcohol to the taxpayer having a certificate for
manufacture of the non-alcohol containing products (at submission of documents according to clause 12 of article 201
of this Code (the clause has been added since 1 January 2006 by the Federal act N 107-FZ of 21 July 2005).



                       Article 201. Procedure for application of tax deductions
   1. Tax deductions provided by clauses 1-4 of article 200 of this Code are made on the basis of settlement
documents and invoices made by sellers at acquisition by the taxpayer of goods liable to excise duty, or presented by
the taxpayer to the owner of give-and-take raw materials (materials) at production thereof, or on the basis of customs
declarations or other documents confirming importation of goods liable to excise duty or presented by the taxpayer to
the owner of give-and-take raw materials (materials) at production thereof, into the customs territory of the Russian
Federation , and payment of the certain sum of the excise duty (the paragraph is in the wording enforced from 1
January 2001 by the Federal act N 166-FZ of 29 December 2000; added to from 1 July 2002 by the Federal act N 57-
FZ of 29 May 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording).

   Only those sums of the excise duty shall be subject to deduction, which have actually been paid to sellers at
acquisition of goods liable to excise duty or presented by the taxpayer and paid by the owner of give-and-take raw
materials (materials) at production thereof, or actually paid at importation of goods liable to excise duty released for
free circulation into the customs territory of the Russian Federation (the paragraph is in the wording enforced from 1
January 2001 by the Federal act N 166-FZ of 29 December 2000; added to from 1 July 2002 by the Federal act N 57-
FZ of 29 May 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording).

    In the case of payment for goods liable to excise duty used as raw materials for production of other goods by the
third parties, tax deductions shall be made, if the settlement documents specify the name of the organization for which
the payment was made.

    If it is goods liable to excise duty which were used as give-and-take raw materials, on which the excise duty had
already been paid, tax deductions shall be made at submission by the taxpayers of copies of payment documents with
the note of the bank, confirming the fact of payment of the excise duty by the owner of the raw materials (materials) or
the fact of payment by the owner of the cost of raw materials at the prices including the excise duty (the paragraph is
in the wording enforced from 1 January 2001 by the Federal act N 166-FZ of 29 December 2000).

   Tax deduction provided when goods liable to excise duty previously produced by the taxpayer from give-and-take
raw materials are used as give-and-take raw materials, shall be made on the basis of copies of primary documents
confirming the fact of presentation by the taxpayer of these sums of the excise duty to the owner of these raw
materials (acceptance and transfer statement) and payment documents with the note of a bank confirming the fact of
payment by the owner of the raw materials of the cost of production of the goods liable to excise duty with the account
of the excise duty (the paragraph has been added to from 1 July 2002 by the Federal act N 57-FZ of 29 May 2002; the
effect shall apply to relations arising from 1 January 2002).
   2. Deduction of sums of the excise duty specified in clause 4 of article 200 of this Code shall be made in
presentation by the taxpayer of payment documents with the note of a bank confirming the fact of payment by the
seller producing wine materials of ethyl alcohol produced from food raw materials at the prices including the excise
duty. The sums of the excise duty shall be deducted at the amount not exceeding the sum of the excise duty
calculated according to the following formula (the paragraph is in the wording enforced from 1 January 2001 by the
Federal act N 166-FZ of 29 December 2000):

                                 ).

   6. Deductions specified in clause 6 of article 200 of this Code shall be made at final determining by the taxpayer of
the sum of the excise duty to be paid at importation of goods liable to excise duty into the customs territory of the
Russian Federation (the clause is in the wording enforced from 1 January 2001 by the Federal act N 166-FZ of 29
December 2000; is in the wording enforced from 1 January 2006 by the Federal act N 107-FZ of 21 July 2005, - see
the previous wording).

   7. Tax deductions specified in clause 7 of article 200 of this Code shall be made after they are shown in the records
of operations of sale of goods liable to excise duty (the paragraph has been added from 1 July 2002 by the Federal
act N 57-FZ of 29 May 2002; the effect shall apply to relations arising from 1 January 2002; in the wording enforced
from 1 January 2004 by the Federal act N 117-FZ of 7 July 2003, -see the previous wording).

   8. Tax deductions specified in clause 8 of article 200 of this Code shall be made at submission by the taxpayer of
the following documents:

  1) copy of the contract with the buyer (recipient) of oil products who has a certificate;

   2) registries of invoices with the note of the fiscal agency where the buyer (recipient) of oil products is registered.
The form and procedure of submission of registries to fiscal agencies shall be determined by the RF Ministry of
finance.

   This note shall be made in the case of compliance of the data specified in the tax declaration of the taxpayer-buyer
having a certificate with the data contained in the registries of invoices presented by the taxpayer. This note shall be
made by the fiscal agency within five days following the date of submission of the tax declaration according to the
procedure determined by the RF Ministry of finance.
   (The subclause is in the wording enforced since 2 August 2004 by the Federal act N 58-FZ on 29 June 2004, - see
the previous wording).
   (The clause has been added since 1 January 2003 by the Federal act No 110-FZ of 24 July 2002, with
amendments made by the Federal act No 191-FZ of 31 December 2002)

   9. Tax deductions specified in clause 9 of article 200 of this Code shall be made as soon as the taxpayer submits
documents confirming the fact of transfer by the taxpayer and (or) organization rendering to the taxpayer of services
on processing (manufacture) of oil products for production (consignment note for internal movement, consignment
note for selling materials on the side, limit-intake map, report of acceptance-transfer of raw material for processing,
report of acceptance-transfer between the structural subdivisions of the taxpayer, report of writing off for production
and others) (the clause has been added since 1 January 2003 by the Federal act No 110-FZ of 24 July 2002, with
amendments made by the Federal act No 191-FZ of 31 December 2002; is supplemented from 1 January 2006 by the
Federal act N 107-FZ of 21 July 2005, - see the previous wording).

  10. In order to confirm the right for deduction of the excise duty paid at importation into the customs territory of the
Russian Federation, the taxpayer shall submit to the fiscal agencies the following documents:

  1) contract (copy thereof) for acquisition if imported oil products;

  2) cargo customs declaration (copy thereof);

   3) payment documents confirming the fact of payment of the excise duty at release for free circulation on the
territory of the Russian Federation of imported oil products.

  Deduction of sums of the excise duty paid at importation into the customs territory of the Russian Federation shall
be made after crediting of imported oil products liable to excise duty.
  (The clause has been added since 1 January 2003 by the Federal act No 110-FZ of 24 July 2002, with
amendments made by the Federal act No 191-FZ of 31 December 2002)
   11. Tax deductions specified in clause 11 of article 200 of this Code shall be made as soon as the taxpayer
submits the following documents confirming the fact of manufacture from the denaturized ethyl alcohol of the non-
alcohol-containing production to fiscal agencies:

  1) certificate for manufacture of the non-alcohol-containing production;

  2) copies of the contract with the manufacturer of the denaturized ethyl alcohol;

   3) registers of the invoices issued by manufacturers of the denaturized ethyl alcohol. The form and the procedure
for submission of registers to fiscal agencies shall be determined by the Ministry of Finance of the Russian
Federation;

  4) waybill on internal moving;

  5) report of acceptance-transfer between structural subdivisions of the taxpayer;

  6) act of writing-off into manufacture and the other documents.
  (The clause has been added since 1 January 2006 by the Federal act N 107-FZ of 21 July 2005).

   12. Tax deductions specified in clause 12 of article 200 of this Code shall be made as soon as the taxpayer
submits the following documents confirming the fact of manufacture from the denaturized ethyl alcohol of the non-
alcohol-containing production to fiscal agencies:

  1) certificate for manufacture of the denaturized ethyl alcohol;

   2) copy of the contract with the taxpayer having the certificate for manufacture of the non-alcohol-containing
production;

   3) registers of invoices with a note of fiscal agency in which the buyer (addressee) of the denaturized ethyl alcohol
is registered. The form and the procedure for submission of registers to fiscal agencies shall be determined by the
Ministry of Finance of the Russian Federation.

  The specified note is put down in case of conformity of the data specified in tax declaration of the taxpayer - buyer,
having the certificate, to the data contained in registers submitted by the taxpayer - buyer of invoices. The specified
note is put down by the fiscal agency not later than five days from the date of submission of the tax declaration
according to the procedure determined by the Ministry of Finance of the Russian Federation;

  4) waybills for release of the denaturized ethyl alcohol;

  5) reports of acceptance-transfer of the denaturized ethyl alcohol.
  (The clause has been added since 1 January 2006 by the Federal act N 107-FZ of 21 July 2005).



                             Article 202. Sum of the excise duty to be paid
                       (the title of the article is in the wording enforced from 1 January 2001 by
                                      the Federal act N 166-FZ of 29 December 2000)

   1. The sum of the excise duty to be paid by the taxpayer performing operations considered to be object of taxation
according to this chapter shall be determined according to the results of each tax period as the sum of the excise duty
reduced by tax deductions provided by article 200 of this Code, determined according to article 194 of this Code (the
clause is in the wording enforced from 1 January 2001 by the Federal act N 166-FZ of 29 December 2000; in the
wording enforced from 1 January 2003 by the Federal act N 110-FZ of 24 July 2002, - see the previous wording).

  2. The clause has lost its force from 1 January 2004 - Federal act N 117-FZ of 7 July 2003. - See the previous
wording.

  3. The sum of the excise duty to be paid at importation of goods liable to excise duty into the territory of the
Russian Federation shall be determined according to clause 6 of article 194 of this Code (the clause is in the wording
enforced from 1 January 2001 by the Federal act N 166-FZ of 29 December 2000; in the wording enforced from 1
January 2003 by the Federal act N 110-FZ of 24 July 2002, - see the previous wording).
   4. The sum of the excise duty to be paid by the taxpayer carrying out primary distribution of goods liable to excise
duty originating and imported from the territory of states - participants of the Customs union without customs
clearance (in the presence of agreements on the united customs area) shall be determined according to article 194 of
this Code (the clause is in the wording enforced from 1 January 2001 by the Federal act N 166-FZ of 29 December
2000).

   5. If the sum of tax deductions in some tax period exceeds the sum of the excise duty calculated on distributed
goods liable to excise duty, the taxpayer shall not pay the excise duty in this tax period (the paragraph is in the
wording enforced from 1 January 2001 by the Federal act N 166-FZ of 29 December 2000; in the wording enforced
from 1 January 2003 by the Federal act N 110-FZ of 24 July 2002, - see the previous wording).

   The sum of excess of tax deductions over the sum of the excise duty calculated on operations considered to the
object of taxation according to this chapter, shall be subject to offset for the account of current and (or) future
payments of the excise duty in the next tax period (the paragraph is in the wording enforced from 1 January 2001 by
the Federal act N 166-FZ of 29 December 2000; in the wording enforced from 1 January 2003 by the Federal act N
110-FZ of 24 July 2002, - see the previous wording).

   The sum of excess of tax deductions over the sum of the excise duty calculated on operations considered to the
object of taxation according to this chapter, which have been performed in the accounting tax period shall be deducted
from the total sum of the excise duty in the following tax period with the highest priority compared to other tax
deductions (the paragraph is in the wording enforced from 1 January 2001 by the Federal act N 166-FZ of 29
December 2000; in the wording enforced from 1 January 2003 by the Federal act N 110-FZ of 24 July 2002, - see the
previous wording).



                              Article 203. Sum of excise duty to be returned
                        (the title of the article is in the wording enforced from 1 January 2001 by
                                      the Federal act N 166-FZ of 29 December 2000)

   1. If as a result of a tax period the sum of tax deductions exceeds the sum of the excise duty calculated on
operations with goods liable to excise duty, which are object of taxation according to this chapter, as a result of the tax
period, the obtained difference shall be compensated for (credited, returned) to the taxpayer in accordance with the
provisions of this article (the clause is in the wording enforced from 1 January 2003 by the Federal act N 110-FZ of 24
July 2002, with amendments made by the Federal act No 191-FZ of 31 December 2002; in the wording enforced from
1 January 2004 by the Federal act No 117-FZ of 7 July 2003, - see the previous wording).

   2. The above mentioned sums shall be sent in the accounting tax period and within three following tax periods for
performance of duties on payment of taxes or fees, including taxes paid in connection with movement of goods liable
to excise duty across the customs border of the Russian Federation, for payment of penalties, payment of arrears,
sums of tax sanctions sentenced to the taxpayer, which are to be credited to the same budget (the paragraph has
been added to from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000).

   Fiscal agencies shall make offset independently, and referring to taxes paid in connection with movement of goods
liable to excise duty across the RF customs border, as agreed with the fiscal agencies, and inform the taxpayer
thereabout within 10 days.

   3. Upon expiration of three tax periods following the accounting one, the sum which was not offset shall be returned
to the taxpayer upon an application thereof.

   Within two weeks after the receipt of the above application the fiscal agency shall make a decision on return of the
above sum to the taxpayer from the corresponding budget and within the same period send this decision for execution
to the corresponding Federal treasury agency. Return of the above sums shall be provided by Federal treasury
agencies within two weeks following the receipt of the decision of the fiscal agency. If such decision has not been
received by the corresponding Federal treasury agency upon expiration of seven days following the date of sending
by the fiscal agency, the date of receipt of this decision shall be the eighth day following the date of sending of this
decision by the fiscal agency (the paragraph is in the wording enforced from 1 January 2005 by the Federal act N 183-
FZ of 28 December 2004, - see the previous wording).

  In the case of violation of the deadlines set by this clause, interest shall be charged on the sum to be returned,
basing on one three hundred and sixtieth of the RF Central Bank refinancing rate for each day of arrears (the
paragraph is in the wording enforced from 1 January 2001 by the Federal act N 166-FZ of 29 December 2000).
  4. Sums provided by article 201 of this Code referring to operations with goods liable to excise duty provided by
subclause 4 of clause 1 of article 183 of this Code shall be redeemed by means of offset (return) on the basis of the
documents provided by clause 7 of article 198 of this chapter (the clause is in the wording enforced from 1 January
2003 by the Federal act N 110-FZ of 24 July 2002, with amendments made by the Federal act No 191-FZ of 31
December 2002, - see the previous wording)

   Redemption shall be provided within three months following the date of submission of the documents provided by
clause 7 of article 198 of this Code (the clause is in the wording enforced from 1 January 2003 by the Federal act N
110-FZ of 24 July 2002, with amendments made by the Federal act No 191-FZ of 31 December 2002, - see the
previous wording)

  Within this period the fiscal agency shall inspect feasibility of tax deductions and make a decision on redemption by
means of offset or return of the corresponding sums or on a refusal (full or partial) of redemption.

   If the fiscal agency makes a decision on a refusal (full or partial) of redemption, they must provide a motivated
report to the taxpayer within 10 days following the decision-making.

  If the fiscal agency has not made a decision on refusal within the established period and (or) certain report has not
been presented to the taxpayer, the fiscal agency must make a decision on redemption of the sums on which the
decision on refusal has not been made, and notify the taxpayer on the decision made within 10 days.

   If the taxpayer has arrears and penalties on the excise duty, arrears and penalties on other taxes, as well as debts
under sentenced tax sanctions to be placed into the same budget from which return is made, they shall be offset with
the highest priority upon the decision of the fiscal agency (the paragraph is in the wording enforced from 1 January
2001 by the Federal act N 166-FZ of 29 December 2000).

  Fiscal agencies shall make the offset independently and notify the taxpayer thereabout within 10 days.

   If the fiscal agency has not made a decision on redemption in the presence of arrears on the excise duty, which
appeared in the period between the date of submission of the declaration and the date of redemption of the
corresponding sums, and which does not exceed the sum to be redeemed upon the decision of the fiscal agency, no
penalty shall be charged on the sum of the arrears (the paragraph is in the wording enforced from 1 January 2001 by
the Federal act N 166-FZ of 29 December 2000).

   If the taxpayer does not have arrears and penalties on the excise duty, arrears and penalties on other taxes, as
well as debts under sentenced tax sanctions to be placed into the same budget from which return is made, the sums
to be redeemed shall be offset for the account of current payments of the excise duty and (or) other taxes to be paid
to the same budget, as well as on taxes paid in connection with movement of goods (works, services) across the
customs border of the Russian Federation as agreed with the customs agencies, or returned to the taxpayer upon
their application (the paragraph is in the wording enforced from 1 January 2001 by the Federal act N 166-FZ of 29
December 2000).

   Not later than the last day of the term specified in paragraph two of this clause the fiscal agency shall make a
decision on return of sums of the excise duty from the corresponding budget (budget of the territorial road fund) and
within the same term send this decision for execution to the corresponding Federal treasury agency (the paragraph is
in the wording enforced from 1 January 2003 by the Federal act N 110-FZ of 24 July 2002, with amendments made
by the Federal act No 191-FZ of 31 December 2002; is in the wording enforced from 1 January 2005 by the Federal
act N 183-FZ of 28 December 2004, - see the previous wording).

   Return of the sums of the excise duty shall be provided by Federal treasury agencies within two weeks following
the receipt of the decision of the fiscal agency. If such decision has not been received by the corresponding Federal
treasury agency upon expiration of seven days following the date of sending by the fiscal agency, the date of receipt
of this decision shall be the eighth day following the date of sending of this decision by the fiscal agency (the
paragraph is in the wording enforced from 1 January 2001 by the Federal act N 166-FZ of 29 December 2000; is in
the wording enforced from 1 January 2005 by the Federal act N 183-FZ of 28 December 2004).

  In the case of violation of the deadlines set by this clause, interest shall be charged on the sum to be returned,
basing on one three hundred and sixtieth of the RF Central Bank refinancing rate for each day of arrears (the
paragraph is in the wording enforced from 1 January 2001 by the Federal act N 166-FZ of 29 December 2000).
   5. The clause has been excluded from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002, the effect applies
to relations arising from 1 January 2002. - See the previous wording.

   5. Redemption of the sums of the excise duty paid by the taxpayer in performance of operations provided by
subclauses 2-4 of clause 1 of article 182 of this Code shall be made in performance of operations with oil products
exempted from taxation in accordance with subclause 4 of clause 1 of article 183 of this Code on the basis of
documents provided by clause 7 of article 198 of this Code, in accordance with the procedure established by clause 4
of this article (the clause has been added to from 1 January 2003 by the Federal act N 110-FZ of 24 July 2002, with
amendments made by the Federal act No 191-FZ of 31 December 2002).



                 Article 204. Terms and procedure for payment of the excise duty
                  In performance of operations with goods liable to excise duty
  (the title of the article is in the wording enforced from 1 January 2003 by the Federal act N 110-FZ of 24 July 2002,
                        with amendments made by the Federal act No 191-FZ of 31 December 2002;
              is in the wording enforced from 1 January 2004 by the Federal act No 117-FZ of 7 July 2003, -
                                                   see the previous wording)

  1. The clause has lost its force from 1 January 2004 - Federal act No 117-FZ of 7 July 2003. - See the previous
wording.

   2. Payment of the excise duty in performance of operations considered to be the object of taxation in accordance
with this chapter, referring to oil products, shall be made not later than the 25-th day of the month following the expired
tax period, unless otherwise provided by this article.

  Taxpayers having only a certificate for wholesale distribution shall pay the excise duty (the paragraph is in the
wording enforced from 1 January 2006 by the Federal act N 107-FZ of 21 July 2005, - see the previous wording).

  on oil-products, except for straight-run petrol, - not later than the 25-th day of the second month following the
expired tax period (the paragraph has been added from 1 January 2006 by the Federal act N 107-FZ of 21 July 2005);

   on straight-run petrol - not later than the 25-th day of the third month following the expired tax period. Thus the
taxpayers must keep the separate account of realization volume of the specified production (the paragraph has been
added from 1 January 2006 by the Federal act N 107-FZ of 21 July 2005).
   ____________________________________________________________________
   The third paragraph of the previous wording shall be the fifth paragraph of this wording since 1 January 2006 - the
Federal act N 107-FZ of 21 July 2005.
   ____________________________________________________________________

  Taxpayers having only a certificate for retail distribution shall pay the excise duty not later than the 10-th day of the
month following the expired tax period.

   Taxpayers having only a certificate for processing of straight-run petrol shall pay the excise duty not later than the
25-th day of the third month following the expired tax period (the paragraph has been added from 1 January 2006 by
the Federal act N 107-FZ of 21 July 2005).
   (The clause is in the wording enforced from 1 January 2003 by the Federal act No 110-FZ of 24 July 2002 with
amendments made by the Federal act No 191-FZ of 31 December 2002. - See the previous wording).

   3. Payment of the excise duty in the case of distribution (transfer) by taxpayers of goods liable to excise duty
produced by them, specified in subclauses 1-6 of clause 1 of article 181 of this Code shall be made on the basis of
actual distribution (transfer) of the above goods for the expired tax period in equal shares, not later than the 25-th day
of the month following the accounting and not later than the 15-th day of the second month following the accounting
month (the paragraph is in the wording enforced from 10 September 2001 by the Federal act No 118-FZ of 7 August
2001; in the wording enforced from 1 June 2002 by the Federal act No 57-FZ of 29 May 2002; in the wording enforced
from 1 January 2003 by the Federal act No 110-FZ of 24 July 2002, with amendments made by the Federal act No
191-FZ of 31 December 2002, - see the previous wording).

   The paragraph has lost its force since 1 January 2006 - the Federal act N 107-FZ of 21 July 2005, - see the
previous wording:
   The paragraph has lost its force since 1 January 2006 - the Federal act N 107-FZ of 21 July 2005, - see the
previous wording;

   The paragraph has lost its force since 1 January 2006 - the Federal act N 107-FZ of 21 July 2005, - see the
previous wording;
   (The clause is in the wording enforced from 1 January 2001 by the Federal act N 166-FZ of 29 December 2000).

  3_1. Payment of the excise duty when performing operations recognized by the taxation object according to
subclause 20 of clause 1 of article 182 shall be made not later than the 25-th day of the third month following the
expired tax period (the paragraph has been added from 1 January 2006 by the Federal act N 107-FZ of 21 July 2005);

  4. Clause has been excluded since 1 June 2002 by the Federal act no 57-FZ of 29 May 2002. - See the previous
wording.
  __________________________________________________________________
  Clause 5 of the previous wording shall be clause 4 of the present wording since 1 June 2002 - Federal act No 57-
FZ of 29 May 2002.
  ___________________________________________________________________

  4. Excise duty on goods liable to excise duty (except oil products) shall be paid at the place of production of these
goods (the paragraph is in the wording enforced from 1 January 2001 by the Federal act N 166-FZ of 29 December
2000; in the wording enforced from 10 September 2001 by the Federal act N 118-FZ of 7 August 2001; in the wording
enforced from 1 January 2003 by the Federal act N 110-FZ of 24 July 2002 with amendments made by Federal act N
191-FZ on 31 December 2002; is in the wording enforced from 1 January 2006 by the Federal act N 107-FZ of 21 July
2005, - see the previous wording).

  The paragraph added from 1 June 2002 by the Federal act N 57-FZ of 29 May 2002 has been excluded from 1
January 2004 by the Federal act N 117-FZ of 7 June 2003. - See the previous wording.

   In the case of performance of operations with oil products provided by subclauses 2-4 of clause 1 of article 182 of
this Code, payment of the sum of the tax shall be made by the taxpayer at the place of location thereof, as well as at
the place of location of each of their independent subdivisions, basing on the share of the tax falling on these
independent subdivisions determined as the value of the specific weight of the sales volume of oil products (in kind)
by this independent subdivision in the total volume of the sales volume of oil products for the taxpayer on the whole
(the paragraph has been added since 1 January 2003 by the Federal act No 110-FZ of 24 July 2002, with
amendments made by the Federal act No 191-FZ of 31 December 2002).

   Calculation of sums of the tax to be paid at the place of location of independent subdivisions shall be made by the
taxpayer independently (the paragraph has been added since 1 January 2003 by the Federal act No 110-FZ of 24
July 2002, with amendments made by the Federal act No 191-FZ of 31 December 2002).

   If these operations are performed by the taxpayer through their independent subdivisions located on the territory of
one component of the Russian Federation and on the same territory with the parent subdivision, the sum of the excise
duty may be determined by the taxpayer from one center and paid at the place of location of the parent subdivision
(the paragraph has been added since 1 January 2003 by the Federal act No 110-FZ of 24 July 2002, with
amendments made by the Federal act No 191-FZ of 31 December 2002).
   ___________________________________________________________________
   Clause 6 of the previous wording shall be clause 5 of the present wording since 1 June 2002 - Federal act No 57-
FZ of 29 May 2002.
   ___________________________________________________________________

   5. The paragraph has been excluded since 1 January 2004 by the Federal act No 117-FZ of 7 July 2003. - See the
previous wording.

    5. Taxpayers must submit to fiscal agencies at the place of their location, as well as at the place of location of each
its independent subdivision the tax declaration for the tax period in the part of operations performed by them,
considered to be the object of taxation in accordance with this chapter, not later than the 25-th day of the month
following the expired tax period, unless otherwise provided by this clause (the paragraph is in the wording enforced
from 1 January 2003 by the Federal act N 110-FZ of 24 July 2002, with amendments made by the Federal act No
191-FZ of 31 December 2002; in the wording enforced from 1 January 2004 by the Federal act No 117-FZ of 7 July
2003, - see the previous wording).
   The paragraph has lost its force since 1 January 2006 - the Federal act N 107-FZ of 21 July 2005. - See the
previous wording.

    Taxpayers having only a certificate for wholesale distribution - not later than the 25-th day of the second month
following the expired tax period (the paragraph has been added since 1 January 2003 by the Federal act No 110-FZ
of 24 July 2002, with amendments made by the Federal act No 191-FZ of 31 December 2002).

   Taxpayers having a certificate for retail distribution - not later than the 10-th day of the month following the expired
tax period (the paragraph has been added since 1 January 2003 by the Federal act No 110-FZ of 24 July 2002, with
amendments made by the Federal act No 191-FZ of 31 December 2002).



      Article 205. Terms and procedure for payment of the excise duty in the case of
    Importation of goods liable to excise duty into the customs territory of the Russian
                                         Federation
                        (the title of the article is in the wording enforced from 1 January 2001 by
                                      the Federal act N 166-FZ of 29 December 2000)

   Terms and procedure for payment of the excise duty in the case of importation of goods liable to excise duty into
the RF customs territory shall be established by the RF customs legislation on the basis of the provisions of this
chapter (article is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000).




                      Article 206. Specific features of calculation and payment
                     of excise duties in realization of product-share agreements
                         (the article shall be considered to lost there force from 10 June 2003 -
                                       by the Federal act N 65-FZ on 6 June 2003. -
                                                 See the previous wording)




                                  Chapter 23. Tax on incomes of persons



                                              Article 207. Taxpayers
   Taxpayers of the tax on incomes of persons (hereinafter referred to as the taxpayers) shall be persons being tax
residents of the Russian Federation, as well as persons drawing incomes from the source located in the Russian
Federation, which are not tax residents of the Russian Federation.(the article is in wording enforced since 1 January
2001 by the Federal law N 166-FZ from 29 December 2000).




                    Article 208. Incomes from sources in the Russian Federation
                     And incomes from sources outside the Russian Federation
  1. For purposes of this chapter, incomes from sources in the Russian Federation shall include:

  1) dividends and interest drawn from the Russian organization, as well as interest drawn from Russian sole traders
and (or) foreign organization in connection with the activity of its permanent representative office in the Russian
Federation (the subclause is in the wording enforced from 1 January 2002 by the Federal act No 110-FZ of 6 August
2001, - see the previous wording);
   2) insurance pay-outs in the event of insurance case drawn from the Russian organization and (or) foreign
organization in connection with the activity of its permanent representative office in the Russian Federation (the
subclause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000);

  3) incomes drawn from use in the Russian Federation of copyright or other adjacent rights (the subclause is in the
wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000);

  4) incomes drawn from leasing or other use of property staying in the Russian Federation (the subclause is in the
wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000);

  5) incomes from sale:

  real estate property staying in the Russian Federation;

  stocks or other securities, as well as stakes in the authorized capital of organizations in the Russian Federation;

   claims to the Russian organization or foreign organization in connection with the activity of its permanent
representative office in the Russian Federation;

  other property staying in the Russian Federation and belonging to the natural person;

   6) remuneration for performance of labour or other obligations, fulfilled work, rendered service, performance of
actions in the Russian Federation. Remuneration for directors and other similar pay-outs received by members of the
organization’s managing body (board of directors or another similar body) - tax resident of the Russian Federation,
whose place of location (management) is the Russian Federation, shall be considered as incomes drawn from
sources in the Russian Federation regardless of the place where managing duties entrusted with these persons were
actually performed, or where pay-outs of this remuneration were made from (the subclause is in the wording enforced
from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000);

    7) pensions, allowances and other similar pay-outs drawn by the taxpayer in accordance with the effective Russian
legislation or obtained from the foreign organization in connection with the activity of its permanent representative
office in the Russian Federation (the subclause is in the wording enforced from 1 January 2001 by the Federal act No
166-FZ of 29 December 2000);

  8) the subclause has been excluded from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000;

   8) incomes received from use of any transport means including sea, river, air vessels and motor-transport means,
in connection with transportation to the Russian Federation and (or) out of the Russian Federation or within the
Russian Federation, as well as fines or other sanctions for idleness (delay) of these transport means in points of
loading (unloading) in the Russian Federation (the subclause has been added from 1 January 2001 by the Federal act
No 166-FZ of 29 December 2000);

   9) incomes drawn from use of pipelines, electric power supply lines, fibre-optical and (or) wireless communication,
other means of communication including computer networks on the territory of the Russian Federation (the subclause
has been added from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000);

   9_1) payments to assignees of the died ensured persons in the cases provided by the legislation of the Russian
Federation on obligatory pension insurance (the subclause has been added since 1 January 2006 by the Federal act
N 204-FZ of 29 December 2004);
   ____________________________________________________________________
   Subclause 9 of the previous wording shall be subclause 10 of the present wording since 1 January 2000 - Federal
act No 166-FZ of 29 December 2000.
   ____________________________________________________________________

  10) other incomes received by the taxpayer as a result of performance by them of activities in the Russian
Federation (the subclause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29
December 2000).

   2. For purposes of this chapter, incomes of the natural person drawn by them as a result of foreign trade operations
(including commodity exchange) performed exclusively on behalf of this natural person and connected exclusively
with purchase (acquisition) of goods (performance of works, rendering of services) in the Russian Federation, as well
as importation of goods into the territory of the Russian Federation shall not refer to incomes drawn from sources in
the Russian Federation.

    This provision shall be applied with reference to operations connected with importation of goods into the territory of
the Russian Federation under the customs procedure of release for free circulation only subject to meeting the
following requirements:

   1) supply of goods is provided by a natural person not from places of storage (including customs warehouses)
located on the territory of the Russian Federation (the subclause is in the wording enforced from 1 January 2001 by
the Federal act No 166-FZ of 29 December 2000);

  2) provisions of clause 3 of article 40 of this Code shall not apply to the operation;

  3) the goods are not sold via the permanent representative office in the Russian Federation.

    If at least one of the above mentioned requirements is not met, the income drawn from sources in the Russian
Federation, referring to sales of goods, shall be the part of drawn incomes relating to the activity of the natural person
in the Russian Federation.

   In the case of subsequent sale of goods acquired by the natural person within foreign trade operations provided by
this clause, incomes of this natural person drawn from sources in the Russian Federation shall include incomes from
any sale of these goods, including resale or mortgage, from warehouses or other places of location and storage of
these goods located on the territory of the Russian Federation, belonging to, leased or used by the natural person,
except sale thereof outside the Russian Federation from customs warehouses (the subclause is in the wording
enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000).

  3. For purposes of this chapter, incomes drawn from sources outside the Russian Federation shall include (the
subclause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000):

   1) dividends and interest drawn from the foreign organization, except interest provided by subclause 1 of clause 1
of this article (the subclause is in the wording enforced from 1 January 2002 by the Federal act No 110-FZ of 6 August
2001, - see the previous wording);

  2) insurance pay-outs in the event of the insurance case, received from the foreign organization, except insurance
pay-outs provided by subclause 2 of clause 1 of this article (the subclause is in the wording enforced from 1 January
2001 by the Federal act No 166-FZ of 29 December 2000);

  3) incomes from use outside the Russian Federation of copyright or other adjacent rights (the subclause is in the
wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000);

   4) incomes drawn from giving in rent or other use of property located outside the territory of the Russian Federation
(the subclause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000);

  5) incomes from sale of:

  real estate property located outside the Russian Federation;

   stocks or other securities outside the Russian Federation, as well as stakes in authorized capitals of foreign
organizations (the paragraph is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29
December 2000);

   claims to the foreign organization, except claims specified in paragraph four of subclause 5 of clause 1 of this
article;

  other property staying outside the Russian Federation;

   6) remuneration for performance of labour or other obligations, fulfilled work, rendered service, performance of
actions in the Russian Federation. Remuneration for directors and other similar pay-outs received by members of the
foreign organization’s managing body (board of directors or another similar body) shall be considered as incomes
drawn from sources outside the Russian Federation regardless of the place where managing duties entrusted with
these persons were actually performed (the subclause is in the wording enforced from 1 January 2001 by the Federal
act No 166-FZ of 29 December 2000);
   7) pensions, allowances, students allowances and other similar pay-outs received by the taxpayer in accordance
with the effective legislation of the foreign states (the subclause is in the wording enforced from 1 January 2001 by the
Federal act No 166-FZ of 29 December 2000);

   8) incomes received from use of any transport means including sea, river, air vessels and motor-transport means,
as well as fines or other sanctions for idleness (delay) of these transport means in points of loading (unloading),
except those provided by clause 8 of clause 1 of this article (the subclause has been added from 1 January 2001 by
the Federal act No 166-FZ of 29 December 2000);

  9) other incomes received by the taxpayer as a result of performance by them of activities outside the Russian
Federation.

   4. If provisions of this Code do not allow unambiguously incomes drawn by the taxpayer to incomes received from
sources in the Russian Federation or incomes from sources outside the Russian Federation, the income shall be
referred to this or that source by the RF Ministry of Finance. Similar procedure shall be applied to determining the
share of these incomes, which may be referred to incomes from sources in the Russian Federation and the share,
which may be referred to incomes from sources outside the Russian Federation.

  5. For purposes of this chapter incomes from operations connected with property and non-property relations of
natural persons considered to be members of the family and (or) close relatives in accordance with the RF Family
Code shall not be considered incomes, except fir incomes drawn by these natural persons as a result of a civil-legal
contract or labour agreements made by these persons (the clause has been added from 1 January 2001 by the
Federal act No 166-FZ of 29 December 2000).




                                        Article 209. Object of taxation
  The object of taxation shall be income drawn by taxpayers:

   1) from sources in the Russian Federation and (or) from sources outside the Russian Federation - for persons
being tax residents of the Russian Federation;

  2) from sources in the Russian federation - from sources for persons not being tax residents of the Russian
Federation.




                                              Article 210. Tax base
   1. In determining the tax base all the incomes of a taxpayer shall be taken into account, drawn by him both in terms
of money and in kind, or those for which he has had the right of ownership, as well as incomes in the form of material
profit which is determined in accordance with article 212 of this Code.

  If any deductions are made from the taxpayer’s income at his request, by judgement of the court of other
authorities, these deductions do not reduce the tax base.

   2. The tax base shall be determined separately for each type of incomes for which different tax rates are
established.

  3. For incomes for which the tax rate established by clause 1 of article 224 of this Code is provided the tax base
shall be determined as incomes that are subject to taxation in terms of money, reduced by the amount of tax
deductions provided by articles 218-221 of this Code, including specific features established by this chapter.

    If the amount of tax deductions in a tax period is higher than the amount of incomes with respect to which the tax
rate established by clause 1 of article 224 of this Code is provided, which are subject to taxation for the same tax
period, then with respect to this tax period the tax base shall be taken as equal to zero. For the next tax period the
difference between the sum of tax deductions in this tax period and the sum of incomes with respect to which the tax
rate established by clause 1 of article 224 of this Code is provided, which are subject to taxation shall not be
postponed, unless otherwise provided by this chapter.
  4. For incomes with respect to which other tax rates are provided, the tax base shall be determined as incomes
subject to taxation in kind. Tax deductions provided by articles 218-221 of this Code shall not be applied.

   5. Incomes (expenses to be deducted in accordance with articles 218-221 of this Code) of a taxpayer in foreign
currency shall be recalculated in rubles at the RF Central Bank rate established on the date of actual receipt of
incomes (as of the date of actual making of expenses).




                      Article 211. Specific features of determining the tax base
                                     in receiving incomes in kind
   1. When a taxpayer receives income from organizations and sole proprietors in kind in the form of goods (works,
services), other kind of property, the tax base shall be deducted as the cost of these goods (works, services) of other
kind of property, calculated basing on the prices determined in order analogous to those provided by the article 40 of
this Code (the paragraph is in wording enforced since 1 January 2001 by the Federal law N 166-FZ from 29
December 2000).

   The cost of these goods (works, services) includes an appropriate sum of the value-added tax, excise duties and
the sales tax (the paragraph is in wording enforced since 1 January 2001 by the Federal law N 166-FZ from 29
December 2000).

  2. Incomes drawn by a taxpayer in kind shall include:

   1) payment (full or partial) for him by organizations or sole proprietors of goods (works, services) or property rights,
including public utilities, food, rest, education in the interest of the taxpayer;

   2) goods obtained by the taxpayer, works performed in the interest of the taxpayer, services rendered in the
interest of the taxpayer, on a gratis basis;

  3) remuneration of labour in kind.




             Article 212. Peculiarities of determining the taxable base in the case of
                         Receiving incomes in the form of material profit
  1. The following shall be taxpayer’s incomes received in the form of material profit:

   1) material profit drawn from economizing on interests for use by the taxpayer of borrowed (credit) funds received
from organizations or sole traders, except for the material profit obtained connecting to operations with credit cards
during the interest-free period, established in the contract on granting a credit card (the subclause has been added to
from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000; is supplemented from 31 January 2005 by
the Federal act N 212-FZ of 30 December 2004, the effect shall apply to the relationships arising from 1 January
2005, - see the previous wording);

  2) material profit drawn from acquisition of goods (works, services) in accordance with the civil-legal contract for
natural persons, organizations and sole traders interdependent with the taxpayer (the subclause is in the wording
enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000);

  3) material profit drawn from acquisition of securities.

   2. When the taxpayer receives income in the form of material profit specified in subclause 1 of clause 1 of this
article, the taxable base shall be determined as follows:

  1) excess of the sum of interests for use of borrowed (credit) funds in rubles calculated on the basis of three
quarters of the effective rate of refinancing of the RF Central Bank as of the date of receipt of these funds, over the
sum of interests calculated on the basis of contract terms (the subclause is supplemented from 1 January 2006 by the
Federal act N 58-FZ of 6 June 2005, - see the previous wording);
  2) excess of the sum of interests for use of borrowed (credit) funds in foreign currency calculated on the basis of 9
per cent per annum, over the sum of interest calculated on the basis of the contract terms (the paragraph is
supplemented from 1 January 2006 by the Federal act N 58-FZ of 6 June 2005, - see the previous wording).

   If the taxpayer receives income in the form of material profit as economizing on interests on borrowed (credit)
funds, the taxable base shall be calculated by them within the terms determined by subclause 3 of clause 1 of article
223 of this Code, but not less than once for the tax period established by article 216 of this Code (the paragraph is
supplemented from 1 January 2006 by the Federal act N 58-FZ of 6 June 2005, - see the previous wording).

   3. If the taxpayer receives income in the form of material profit specified in subclause 2 of clause 1 of this article,
the taxable base shall be determined as the surplus of the price for identical (uniform) goods (works, services) sold by
persons being interdependent referring to the taxpayer under ordinary conditions to persons that are not
interdependent, over the sales prices for identical (uniform) goods (works, services) to the taxpayer.

   4. If the taxpayer receives income in the form of material profit specified in subclause 3 of clause 1 of this article,
the taxable base shall be determined as the surplus of the market price for the securities, determined with the account
of the limit border of fluctuations of the market price for the securities over the sum of actual expenses of the taxpayer
on acquisition thereof (the paragraph has been added to from 2 July 2001 by the Federal act No 71-FZ of 30 May
2001, - see the previous wording).

   The procedure for determining the market price for the securities and limit border of fluctuations of the market price
for the securities shall be established by the federal authority providing regulation of the security market (the
paragraph has been added from 2 July 2001 by the Federal act No 71-FZ of 30 May 2001).



    Article 213. Peculiarities of determining the taxable base under insurance contracts
                          (title of the article is in the wording enforced since 1 February 2005,
                                     by the Federal Act N 204-FZ of 29 December 2004,
                         the effect shall apply to legal relations arising from 1 January 2005, -
                                                    see the previous wording)

  1. When taxable base is determined, incomes received in the form of insurance pay-outs in connection with the
onset of certain insurance cases shall not be taken into account:

  1) under obligatory insurance contracts provided according to the procedure established by the effective legislation;

   2) under voluntary long-term life insurance contracts made for not less than five years and during these five years
not implying insurance pay-outs, as well as in the form of rents and (or) annuities (except insurance pay-out implied in
the case of death of the insured person), in favour of the insured person.

   Sums of insurance pay-outs under voluntary long-term life insurance contracts made for not less than five years
shall not be taken into account in determining the taxable base, if the sums of insurance pay-outs do not exceed the
sums of insurance contributions made by natural persons increased by the sum calculated on the basis of the
effective rate of refinancing of the RF Central Bank on the date of making these contracts. Otherwise, the difference
between these sums shall be taken into account in determining the taxable base and shall be subject to taxation at
the source of payment at the rate provided by clause 2 of article 224 of this Code.

   In the case of cancellation of voluntary long-term life insurance contracts before expiration of the five-year effective
period (except the cases of cancellation of voluntary long-term life insurance contracts ahead of the time for the
reasons not depending on the will of the sides) and return to the natural persons of their pecuniary (pay back) funds to
be paid in the case of cancellation of insurance contracts according to insurance rules and contract terms, the income
received less the sum of payments (contributions) shall be taken into account in determining the taxable base of the
insurant - natural person and shall be subject to taxation at the source of payment;

  3) under contracts providing compensation for the damage of life, health and medical expenses (except payment of
sanatorium and resort vouchers);

   4) under voluntary pension insurance contracts made with insurance organizations, if these pay-outs are made in
the case of pension grounds according to the RF legislation.
  2. The clause has been considered to lost it’s force since 1 February 2005 - the Federal Act N 204-FZ of 29
December 2004, the effect shall apply to legal relations arising from 1 January 2005. - See the previous wording.

   3. When determining the taxable base, the sums of insurance premiums shall be taken into account, if these sums
and paid for natural persons from funds of employers, except the cases when insurance of natural persons is carried
out by employers under contracts of obligatory insurance, as well as under contracts of voluntary insurance providing
compensation for the damage to life and health of the insured natural persons and (or) medical expenses of thereof
(the clause is in the wording, enforced since 1 February 2005 by the Federal Act N 204-FZ of 29 December 2004, the
effect shall apply to legal relations arising from 1 January 2005, - see the previous wording).

   4. Under a contract of voluntary property insurance (including insurance of civil responsibility for infliction of
damage on property of the third parties and (or) insurance of civil responsibility of owners of motor-transport means),
in the onset of the insurance case, the taxpayer’s income, which is subject to taxation is determined in the following
cases:

   Death or elimination of the insured property (property of the third parties) as the difference between the sum of the
received insurance pay-out and the market value of the insured property on the date of making of the above
mentioned contract (on the date of onset of the insurance case - under a contract of insurance of civil responsibility)
increased by the sum of insurance fees paid on insurance of this property;

   Damage of the insured property (property of the third parties) as the difference between the sum of the received
insurance pay-out necessary for making the repair (restoration) of this property (if the repair was not provided), or the
cost of the repair (restoration) of this property (in the repair was made), increased by the sum of insurance fees paid
on insurance of this property.

    Justification of expenses on the performed repair (restoration) of the insured property shall be confirmed by the
following documents:

  1) contract (copy of the contract) on performance of the corresponding works (rendering of the services);

  2) documents confirming acceptance of the works performed (services rendered);

  3) payment documents executed according to the established procedure, confirming the fact of payment for the
work (service).

  Sums of expenses reimbursed for the insurant or incurred by the insurers, made in connection with investigation of
onset of the insurance case, establishing of the size of the damage, legal costs, as well as other costs made in
accordance with the effective legislation, and terms of the property insurance contract.

  5. The clause has been considered to lost it’s force since 1 February 2005 - the Federal Act N 204-FZ of 29
December 2004, the effect shall apply to legal relations arising from 1 January 2005. - See the previous wording.

   6. The clause has been considered to lost it’s force since 1 February 2005 - the Federal Act N 204-FZ of 29
December 2004, the effect shall apply to legal relations arising from 1 January 2005. - See the previous wording.
   (The article is in the wording enforced from 1 January 2003 by the Federal act No 57-FZ of 29 May 2002, - see the
previous wording)



                       Article 213_1. Specifics of determining the taxable base
                       under contracts of non-governmental pension security
                            and contracts of obligatory pension insurance
                             made with non-governmental pension funds
   1. When determining the taxable base under contracts of non-governmental pension security and contracts of
obligatory pension insurance made with non-governmental pension funds, the following shall be taken into account:

   insurance premiums for obligatory pension insurance paid by organizations and other employers in accordance
with the RF legislation;
   ___________________________________________________________________
   The effect of the paragraph two of this clause shall apply to legal relations arising from 1 January 2004 - see article
3 of the Federal Act N 204-FZ of 29 December 2004.
   ____________________________________________________________________

   accumulative part of the labour pension;
   ___________________________________________________________________
   The effect of the paragraph three of this clause shall apply to legal relations arising from 1 January 2004 - see
article 3 of the Federal Act N 204-FZ of 29 December 2004.
   ____________________________________________________________________

   sums of the pension paid under contracts of non-governmental pension security made by natural persons in favour
thereof with non-governmental pension funds having the appropriate license;

  sums of pension premiums under contracts of non-governmental pension security made by organizations and other
employers with Russian non-governmental pension funds having the appropriate license;

   sums of pension premiums paid under contracts of non-governmental pension security made by natural persons in
favour of other persons with Russian non-governmental pension funds having the appropriate license.

  2. The following shall be taken into account when determining the taxable base:

   sums of the pensions to natural persons paid under contracts of non-governmental pension security made by
organizations and other employers with Russian non-governmental pension funds having the appropriate license;

   sums of the pensions paid under contracts of non-governmental pension security made by natural persons in
favour of other persons with Russian non-governmental pension funds having the appropriate license;

   cash (pay out) sums less sums of payments (premiums) paid by the natural person in favour thereof, which shall be
paid in accordance with the pension rules and contract terms of non-governmental security made with non-
governmental pension funds having the appropriate license in the case cancellation of these contract ahead of the
time (except for the cases of cancellation thereof ahead of the time for the reasons other than the will of the sides, or
transfer of the pay out sum to another non-governmental pension fund), as well as the case of change of the contract
terms referring to their validity period.

  The sums specified in this clause shall be taxed with the source of payments.
  (The article has been added since 1 February 2005 by the Federal Act N 204-FZ of 29 December 2004, the effect
shall apply to legal relations arising from 1 January 2005)




        Article 214. Peculiarities of payment of the tax on incomes of natural persons
              With reference to incomes from share participation in organization
   The sum of the tax on incomes of natural persons (hereinafter referred in the chapter as tax) referring to incomes
from share participation in an organization, received in the form of dividends shall be determined with the account of
the following provisions:

   1) the sum of the tax referring to dividends received from the sources outside the Russia Federation shall be
determined by the taxpayer independently for each sum of received dividends at the rate provided by clause 4 of
article 224 of this Code.

   Taxpayers receiving dividends from sources outside the Russian Federation shall have the right to decrease the
sum of the tax calculated according to this chapter by the sum of the tax calculated and paid at the place of location of
the source of income, only if the source of income is located in a foreign state with which a contract (agreement) is
made on evasion of double taxation.

  If the sum of the tax paid at the place of location of the source of income exceeds the cum of the tax calculated
according to this chapter, the difference shall not be returned from the budget;

   2) if it is a Russian organization which is the source of income of a taxpayer received in the form of dividends, this
organization shall be considered a fiscal agent and shall determine the sum of the tax separately for each taxpayer
applicable to each pay-out of these incomes at the rate provided by clause 4 of article 224 of this Code, according to
the procedure provided by article 275 of this Code.
   (The article is in the wording enforced from 1 January 2002 by the Federal act No 110-FZ of 6 August 2001, - see
the previous wording)


   Article 214_1. Peculiarities of determining the taxable base, calculation and payment
         of the tax on incomes from operations with securities and operations with
        financial instruments of futures deals, where securities are the basic asset
   1. When determining the taxable base on incomes from operations with securities including investment shares of
the share trust and operations with financial instruments of futures deals, where securities are the basic asset,
incomes shall be taken into account drawn on the following operations:

  purchase and sale of securities circulating on an organized security market;

  purchase and sale of securities not circulating on an organized security market;

  with financial instruments of futures deals for which the basis asset is securities;

  purchase and sale of investment shares of share trusts including redemption thereof;

   with securities and financial instruments of futures deals, where securities are the basic asset, performed by the
trust manager (except the managing company providing trust management of the property making the investment
fund) in favour of the founder of the trust management (profit acquirer) being a natural person.
   (The clause is in the wording enforced from 1 January 2003 by the Federal act No 57-FZ of 29 May 2002. - See the
previous wording)

  2. The taxable base for each operation specified in clause 1 of this article shall be determined separately with the
account of provisions of this article.

   For purposes of this chapter, financial instruments of futures deals, where securities are the basic asset shall mean
futures and option exchange deals.
   (The clause is in the wording enforced from 1 January 2003 by the Federal act No 57-FZ of 29 May 2002, - see the
previous wording)

   3. Income (loss) on operations of purchase and sale of securities shall be determined as the sum of incomes for
the aggregate of deals with securities of certain categories, performed during the tax period, less the sum of the
losses.

   Income (loss) on operations of purchase and sale of securities, including investment shares of share trusts shall be
determined as the difference between the sums of incomes received from sale of securities and expenses on
acquisition, sale and storage of securities confirmed by documents, actually made by the taxpayer (including
expenses reimbursed for the professional participant of the security market, managing company providing trust
management of the property making the share trust) or property deductions accepted for reduction of incomes from
the purchase and sale deal in accordance with the procedure provided by this clause.
   ____________________________________________________________________
   Amendments shall be made to the second paragraph of clause 3 of this article since 1 January 2007 by the Federal
act N 58-FZ of 6 June 2005.
   ____________________________________________________________________

  These expenses shall include:

  Sums paid to the seller according to the contract;

  Payment for services rendered by the depositary;

   Commission deductions to professional participant of the security market, discount paid (reimbursed) for the
managing company of the share trust in selling (reimbursement) by the investor of the investment share of the share
trust, determined in accordance with the procedure established by the RF legislation on investment funds;

  Exchange fee (commission);
  Payment for registrar’s services;

  Tax on inheritance and (or) donation, paid by the taxpayer when obtaining securities in the property (the paragraph
has been added since 1 January 2006 by the Federal act N 58-FZ of 6 June 2005).

   Other expenses directly connected with purchase, sale and storage of securities, made for services rendered by
professional participant of the security market within their professional activity.

   If the organization - emitter carried out an exchange (converting) of stocks, at realization of the stocks obtained by
the taxpayer as a result of exchange (converting), expenses for acquisition of stocks which the taxpayer owned up to
their exchange (converting) shall be admitted as a documentary confirmed expenses of the taxpayer (the paragraph
has been added since 1 January 2006 by the Federal act N 58-FZ of 6 June 2005).

   In case of realization of stocks (shares), obtained by taxpayer when reorganization of the organizations, expenses
for acquisition thereof shall be admitted the cost determined according to clauses 4-6 of article 277 of the present
Code, under condition of the documentary confirmation by the taxpayer of the expenses for acquisition of stocks
(shares) of the reorganized organizations (the paragraph has been added since 1 January 2006 by the Federal act N
58-FZ of 6 June 2005).
   ____________________________________________________________________
   The tenth-eighteenth paragraphs of clause 3 of the previous wording shall be the thirteenth-twentieth paragraphs of
clause 3 of this wording respectively - the Federal act N 58-FZ of 6 June 2005.
   ____________________________________________________________________

   If the taxpayer acquired in ownership (as well as received on a gratuitous basis or with partial payment) securities,
taxation of incomes from operations purchase and sale of securities shall also take into account sums on which the
tax was calculated and paid in acquisition (receipt) of these securities as documentary confirmation of expenses for
acquisition (receipt) of these securities (the paragraph has been added from 9 June 2003 by the Federal act No 51-FZ
of 6 May 2003; the effect shall apply to legal relations arising from 1 January 2003).

   Income (loss) on operations of purchase and sale of securities circulating on the organized security market shall be
reduced (increased) by the sum of interests paid for use of pecuniary funds attracted for performance of deals of
purchase and sale of securities, within the sums calculated on the basis of the effective RF Central Bank refinancing
rate.

   For operations with securities circulating on the organized security market the size of the loss shall be determined
with the account of the limit border of fluctuation of the market value of the securities.

   For purposes of this chapter, securities circulating on the organized security market shall include securities
admitted for circulation with trade organizers having a license of the federal executive authority performing regulation
of the security market.

   In the case of sale or redemption of an investment share, if this investment share is not circulated on the organized
security market, expenses shall be determined on the basis of the acquisition price of this investment share including
surcharges.

  In the case of sale or redemption of an investment share of a share trust, if this investment share is not circulated
on the organized security market, the market value shall be the calculated value of the investment share determined
according to the procedure established by the RF legislation on investment funds.

   In the case of acquisition of an investment share of a share trust, if this investment share is not circulated on the
organized security market, the market value shall be the calculated value of the investment share determined
according to the procedure established by the RF legislation on investment funds. If the rules of trust management of
the share trust provides a surcharge to the calculated value of the investment share, the market value shall be
calculated value of the investment share with the account of this surcharge.

   For purposes of this chapter, the market quotation of securities including the shares of a share trust circulating on
the organized security market shall mean the weighed average price of the securities in deals made during the trade
day through the trade organizer. If for one and the same security deals were made through two and more trade
organizers, the taxpayer shall have the right to choose independently the market quotation of the security of one of the
trade organizers. If the weighed average price is not calculated by the trade organizer, for purposes of this chapter,
the weighed average price shall be taken as half the sum of the maximum and minimum priced of the deals made
during the trade day through this trade organizer.

   If taxpayer’s expenses for acquisition, sale and storage of securities cannot be assigned directly to expenses for
acquisition, sale and storage of certain securities, these expenses shall be distributed proportionately to the cost
estimation of the securities, which these expenses are assigned to. The cost estimation of securities shall be
determined on the date of making these expenses.

   If taxpayer’s expenses cannot be confirmed by documents, they shall have the right to use the property tax
deduction provided by paragraph one of subclause 1 of clause 1 of article 220 of this Code.
   ____________________________________________________________________
   Amendments shall be made to the second paragraph of clause 3 of this article since 1 January 2007 by the Federal
act N 58-FZ of 6 June 2005.
   ____________________________________________________________________

   Property tax deduction or deduction at the amount of documents actually made and confirmed by documents, shall
be provided to the taxpayer when calculating and paying the tax to the budget with the source of income payment
(broker, trust manager, managing company providing trust management of the property making the share trust, or with
another person performing operations under a contract of commission or another contract in favour of the taxpayer),
or upon expiration of the tax period, when submitting the tax declaration to the fiscal agency.
   ____________________________________________________________________
   Amendments shall be made to the second paragraph of clause 3 of this article since 1 January 2007 by the Federal
act N 58-FZ of 6 June 2005.
   ____________________________________________________________________

   If the tax is calculated and paid by the source of income payment (broker, trust manager, managing company
providing trust management of the property making the share trust, or with another person performing operations
under a contract of commission or another contract in favour of the taxpayer) in the tax period, the property tax
deduction shall be provided by the source of income payment with an opportunity of subsequent recalculation upon
expiration of the tax period, when submitting the tax declaration to the fiscal agency.
   ____________________________________________________________________
   Amendments shall be made to the second paragraph of clause 3 of this article since 1 January 2007 by the Federal
act N 58-FZ of 6 June 2005.
   ____________________________________________________________________

   In the case of several income payment sources, the property tax deduction shall be provided only for one income
payment source chosen by the taxpayer.
   ____________________________________________________________________
   Amendments shall be made to the second paragraph of clause 3 of this article since 1 January 2007 by the Federal
act N 58-FZ of 6 June 2005.
   ____________________________________________________________________
   (The clause is in the wording enforced from 1 January 2003 by the Federal act no 57-FZ of 29 May 2002, - see the
previous wording)

   4. The taxable base for operations of purchase and sale of securities (redemption of investment share of share
trusts) shall be determined as income received as a result of the tax period for operations with securities. Income
(loss) on operations of purchase and sale of securities shall be determined according to clause 3 of this article (the
paragraph has been added to from 1 January 2003 by the Federal act no 57-FZ of 29 May 2002, - see the previous
wording).

  Loss on operations with securities circulating on the organized security market incurred as a result of the above
operations performed in the tax period shall reduce the taxable base on operations of purchase and sale of the
securities of this category.

   Income on operations of purchase and sale of securities not circulating on the organized security market, which on
the date of acquisition thereof met requirements established for securities circulating on the organized security
market, may be reduced by the sum of the loss incurred in the tax period on operations of purchase and sale of the
securities circulating on the organized security market.

   5. The taxable base on operations with financial instruments of futures deals (except operations provided by clause
6 of this article) shall be determined as the difference between positive and negative results obtained from revaluation
of rights and claims under concluded deals of execution of financial instruments of futures deals, with the account of
payment of services of exchange middlemen and the exchange for opening positions and keeping accounts of natural
persons. The taxable base on operations with financial instruments of futures deals shall be increased by the sum of
premiums obtained under deals with options and shall be reduced by the sum of premiums paid under these deals.

   6. For operations with financial instruments of futures deals made in order to reduce risks of change of the price of
securities, incomes from operations with financial instruments of futures deals (including received premiums for deals
with options) shall increase, and losses reduce the taxable base on operations with basic asset.

   The procedure for referring deals with financial instruments of futures deals to deals made for purposes of
reduction of risks of change of the price of the basic asset shall be determined by federal executive authorities
empowered by the RF Government.

   7. The taxable base on operations with securities including investment shares of share trusts, and operations with
financial instruments of futures deals made by the trust manager shall be determined according to the procedure
established by clauses 4-6 of this article, with the account of requirements of this clause (the paragraph has been
added to from 1 January 2003 by the Federal act No 57-FZ of 29 May 2002, - see the previous wording).

   Taxpayers expenses shall also include sums paid by the founder of the trust management (acquirer of profit) to the
trust manager in the form of remuneration and compensation for expenses made by them on operations performed
with securities and operations with financial instruments of futures deals.

   When determining the taxable base for incomes from operations with securities and operations with financial
instruments of futures deals made by the trust manager in favour of the founder of the trust management (acquirer of
profit), for the acquirer of profit not being the founder of the trust management this income shall be determined with
the account of the contract terms of the trust management.

   In the trust management deals with securities of various categories are made, as well as if in the process of trust
management other types of income appear (including incomes from operations with financial instruments of futures
deals, incomes in the form of dividends), the taxable base shall be determined separately for each category of
securities and each type of income. Incomes which may not be directly referred to decrease of income under deals
with securities of certain category or decrease of the corresponding type of income, shall be distributed
proportionately to the share of each type of income (income received from operations with securities of a certain
category).

  Loss incurred on operations with securities performed by the trust manager in favour of the founder of the trust
management (profit acquirer) performed in the tax period shall reduce incomes from these operations.

   Loss incurred on operations with securities and operations with financial instruments of futures deals performed by
the trust manager in favour of the founder of the trust management (profit acquirer) shall reduce incomes received
from operations with securities of certain category and operations with financial instruments of futures deals, and
incomes received from these operations shall increase incomes (reduce losses) from operations with securities of
certain category and operations with financial instruments of futures deals.

   Loss incurred on operations with securities and operations with financial instruments of futures deals performed by
the trust manager in favour of the founder of the trust management (profit acquirer) performed in the tax period shall
reduce the taxable base on operations with securities of certain category and operations with financial instruments of
futures deals respectively.

   8. The taxable base on operations of purchase and sale of securities and operations with financial instruments of
futures deals shall be determined upon expiration of the tax period. Calculation and payment of the tax are provided
by the fiscal agent upon expiration of the tax period and when they pay pecuniary funds to the taxpayer before
expiration of the tax period.

   When the fiscal agent pays pecuniary funds to the taxpayer before expiration of the tax period, the tax shall be paid
on the share of the income determined according to this article, which corresponds to the actual sum of paid
pecuniary funds. The share of income shall be determined as the product of the total sum of the income and the ratio
of the sum of payment to the cost evaluation of the securities determined on the date of payment of the pecuniary
funds, on which the fiscal agent acts as a broker. When payment of pecuniary funds to the taxpayer occurs more than
once during the tax period, calculation of the sum of the tax shall be made cumulative with the offset of previously paid
sums of the tax.
  Cost evaluation of securities shall be determined on the basis of expenses for acquisition there actually made and
confirmed by documents.

   The fiscal agent referring to incomes from operations with securities and operations with financial instruments of
futures deals performed by the trust manager in favour of the founder of the trust management (profit acquirer) shall
be the trust manager who determines the taxable base on these operations with the account of provisions of this
article.

    The taxable base on operations with securities performed by the trust manager in favour of the founder of the trust
management (profit acquirer) shall be determined on the date of expiration of the tax period or on the date of payment
of pecuniary funds (transfer of securities) before expiration of the tax period. The tax shall be paid within one month
following the final date of the tax period or date of payment of pecuniary funds (transfer of securities).

   When payment is made in pecuniary form or in kind from the funds staying in trust management before expiration
of the validity period of the contract of trust management or the tax period, the tax shall be paid on the share of
income determined according to clause 7 of this article, corresponding to actual sum of funds paid to the founder of
the trust management (profit acquirer). The share of income in this case shall be determined as the product of the
total sum of the income and the ratio of the sum of the payment to the cost evaluation of the securities (pecuniary
funds) staying in the trust management, determined as of the date of payment of pecuniary funds. When payment in
pecuniary form or in kind from the funds staying in trust management is provided more than once during the tax
period, calculation of the sum of the tax shall be made cumulative with the offset of previously paid sums of the tax.

   Payment of pecuniary funds for purposes of this clause shall mean payment of cash funds, transfer of pecuniary
funds to the bank account of the natural person or the account of the third party at the request of the natural person.

   If it is impossible by the source of income payment to deduct from the taxpayer the calculated sum of the tax, the
fiscal agent (broker, trust manager or another person performing operations under the contract of commission,
another contract in favour of the taxpayer) shall notify the fiscal agency in writing at the place of their registration on
impossibility of this deduction and the sum of indebtedness of the taxpayer within one month following the appearance
of this circumstance. Payment of the tax in this case shall be provided according to article 228 of this Code.
   (The article has been added from 2 July 2001 by the Federal act No 71-FZ of 30 May 2001)




                        Article 215. Specific features of determining of incomes
                                 of certain categories of foreign citizens
                             (the name of the article has been added since 1 January 2001
                                 by the Federal law N 166-FZ from 29 December 2000)

   1. The following incomes shall be exempted from taxation:

   1) those of the heads and personnel of representative body of a foreign state that have diplomatic or consulate
rank, members of their families residing together with them, if they are not citizens of the Russian Federation, except
incomes from sources in the Russian Federation that are not connected with diplomatic and consulate service of
these people;

   2) administrative-technical personnel of representative bodies of a foreign state, members of their families residing
together with them, if they are not citizens of the Russian Federation or they do not reside in the Russian Federation
permanently, except incomes from sources in the Russian Federation that are not connected with work of these
persons in these representative bodies (the subclause is in wording enforced since 1 January 2001 by the Federal law
N 166-FZ from 29 December 2000);

   3) maintenance personnel of representative bodies, that are not citizens of the Russian Federation or they do not
reside in the Russian Federation permanently, drawn by them at their office in the representative body of the foreign
state (the subclause has beem added since 1 January 2001 by the Federal law N 166-FZ from 29 December 2000);

   4) employees of international organizations - in accordance with the Articles of these organizations.

   2. Provisions of this article shall be effective in the cases, if legislation of this foreign state has established similar
procedure with respect to persons specified in subclauses 1 - 3 of clause 1 of this article, or if this norm is provided by
an international agreement (contract) of the Russian Federation. The list of foreign states (international organizations)
for which with respect to citizens thereof norms of this article are applied shall be determined by a federal executive
authority in the field of international affairs together with the RF Ministry for finance (the clause is in the wording
enforced since 2 August 2004 by the Federal act N 58-FZ on 29 June 2004; is in the wording enforced since 1
January 2005 by the Federal act N 127-FZ on 2 November 2004, - see the previous wording).



                                             Article 216. Tax period
     The tax period shall be a calendar year.




                         Article 217. Incomes that are not subject to taxation
                                        (exempted from taxation)
  The following types of incomes of natural persons shall not be subject o taxation (exempted from taxation):

  1) state allowances except allowances for temporary disability (including allowances for taking care of a sick child),
as well as other payments and compensations paid according to the effective legislation. Allowances for
unemployment, pregnancy and childbirth shall refer to those exempted form taxation;

   2) pensions for state pension security and labour pensions assigned according to the procedure established by the
effective legislation (the clause is in the wording, enforced since 1 February 2005 by the Federal Act N 204-FZ of 29
December 2004, the effect shall apply to legal relations arising from 1 January 2002, - see the previous wording);

   3) all types of compensation payments established by the effective RF legislation, legislative acts of components of
the Russian Federation, decisions of representative local self-management bodies (within the norms established
according to the RF legislation, connected with (the paragraph has been added to from 1 January 2001 by the Federal
act No 166-FZ of 29 December 2000):

  compensation for the damage inflicted by an injury or other health damage;

  free dwelling premises and public utilities, fuel or corresponding pecuniary compensation (the paragraph has been
added to from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000);

   payment of the cost and (or) giving certain allowance in kind, as well as payment of pecuniary funds instead of this
allowance;

  payment of the cost of catering, sport facilities, equipment, sport and ceremonial dress received by sportsmen and
workers of organizations of physical culture and sport for educational and training process and participation in sport
competitions;

  dismissal of workers, except compensation for non-used vacations;

  death of military men or state workers when performing their official duties;

  compensation for other expenses including expenses for improvement of professional level of workers;

  execution by the labourer of labour duties (including movement to work in other areas and compensation for travel
expenses) (the paragraph is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29
December 2000).

  When the employer pays for the taxpayer their travel expenses both inside and outside the country, the income to
be taxed shall not include the daily allowance paid within the norms established according to the effective legislation,
as well as target expenses actually made and confirmed by documents for travel until the place of destination and
back, fees for airport services, commission fees, travel expenses to the or railway station at the place of departure,
destination or transfer, taking luggage, expenses for renting dwelling premises, payment for communication services,
getting and registration of the official foreign passport, getting visas, as well as expenses connected with exchange of
cash currency or check in a bank for cash foreign currency. If the taxpayer does not present documents confirming
payment of expenses for renting dwelling premises, the sums of this payment shall be exempted from taxation within
the norms established according to the effective legislation. Similar taxation procedure shall be applied to payments
made for persons being within the powerful or administrative competence of an organization, as well as members of
the board of directors or any similar body of the company arriving (leaving) for participation in a meeting of the board
of directors, board or another similar body of this company;

  4) remuneration for donors for delivered blood, mother’s milk and other donor aid (the clause is in the wording
enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000);

  5) alimonies received by taxpayers;

   6) sums received by taxpayers in the form of grants (gratuitous aid) provided to support science and education,
culture and art in the Russian Federation by international or foreign organizations according to the list of these
organizations approved by the RF Government;

   7) sums received by taxpayers in the form of international or Russian premiums for outstanding achievements in
the sphere of science and technology, education, culture, literature and art according to the list of these premiums
approved by the RF Government;

  8) sums of lump sum material aid rendered:

   to taxpayers in connection with natural disasters and other emergency situations in order to compensate for the
material damage inflicted thereon or damage to their health on the basis of decisions of legislative (representative)
and (or) executive authorities, representative local self-management bodies or by foreign states or special funds
created by state authorities or foreign states, as well as those created according to international contracts, where the
Russian Federation is one of the sides, by governmental and non-governmental international organizations;

   by employers to members of the family of the dead employee or to the employee in connection with the death of a
member (members) of his (her) family (the paragraph is in the wording enforced from 1 January 2001 by the Federal
act No 166-FZ of 29 December 2000);

   to taxpayers in the form of humanitarian aid (assistance), as well as in the form of charitable aid (in pecuniary form
and in kind) rendered by Russian and foreign charitable organizations (funds, associations) registered according to
the RF legislation on charitable activity in the Russian Federation (the paragraph is in the wording enforced from 31
January 2005 by the Federal act N 212-FZ of 30 December 2004, the effect shall apply to the legal relations arising
from 1 January 2005, - see the previous wording);

  to taxpayers from poor and socially unprotected categories of citizens in the form of sums addressed social aid (in
pecuniary form and in kind) rendered from federal budgetary funds, budgets of components of the Russian
Federation, local budgets and extrabudgetary funds according to programmes approved annually by certain state
authorities;

  to taxpayers who suffered from terrorist acts on the territory of the Russian Federation regardless of the source of
payment;

   9) sums of full or partial compensation of the cost of vouchers, except tourist ones paid by employers to their
employees and (or) members of their families, disabled people who do not work in this organization to sanatorium-
resort and health improvement institutions located on the territory of the Russian Federation, as well as sums of full or
partial compensation of the cost of vouchers for children under 16 to sanatorium-resort and health improvement
institutions located on the territory of the Russian Federation paid (the paragraph is in the wording enforced from 1
January 2001 by the Federal act No 166-FZ of 29 December 2000):

    from funds of employers staying at their disposal after payment of the tax on profit of organizations (the paragraph
is in the wording enforced from 1 January 2002 by the Federal act No 110-FZ of 6 August 2001, - see the previous
wording);

  from the RF Social Insurance Fund;

   10) sums paid by employers staying at their disposal after payment of the tax on profit of organizations for
treatment and medical service for their employees, their spouses, parents and children, sums paid by non-
governmental organizations of invalids for medical treatment and medical care of invalids, provided medical
institutions have certain licenses, as well as documents confirming actual expenses for treatment and medical
services (the paragraph is in the wording enforced from 1 January 2002 by the Federal act No 110-FZ of 6 August
2001, is added since 1 January 2005 by the Federal act N 103-FZ on 20 August 2004, - see the previous wording).

   These incomes shall be exempted from taxation in the case of non-cash payment by employers and (or) by non-
governmental organizations of invalids to medical institutions of treatment and medical service for taxpayers, as well
as in the case of giving out cash funds intended for these purposes directly to the taxpayer (members of their families,
parents) or placement of the funds intended for these purposes onto accounts of taxpayers in institutions of banks(the
paragraph is added since 1 January 2005 by the Federal act N 103-FZ on 20 August 2004, - see the previous
wording);

    11) allowances of pupils, students, post graduates, doctor’s assistants, adjuncts or candidates for doctor’s degree
of institutions of higher professional education or post graduate professional education, scientific-research institutions,
students of institutions of primary professional and secondary professional education, listeners of ecclesiastical
educational institutions paid to these persons by these institutions, allowances established by the President of the
Russian Federation, legislative (representative) or executive authorities of the Russian Federation, authorities of
components of the Russian Federation, charitable funds, allowances paid from the budgets to taxpayers getting
education by order of employment services (the clause is in the wording enforced from 1 January 2001 by the Federal
act No 166-FZ of 29 December 2000);

   12) sums of remuneration of labour and other sums in foreign currency received by taxpayers from state institutions
or organizations sent them to work abroad - within the norms established according to the effective legislation on
remuneration of labour of employees;

   13) incomes of taxpayers received from sale of cattle, rabbits, nutrias, poultry, wild animals and birds (both alive an
slaughtered, raw or processed), products of stock-breeding, plant-growing and bee-breeding both in natural form and
processed (the paragraph is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29
December 2000).

   These incomes shall be exempted from taxation, if the taxpayer presents a document issued by a certain local self-
management authority, administration of the horticultural, horticultural and gardening partnership, confirming that sold
products is produced by the taxpayer on the plot of land belonging to him or members of his family, used for managing
the private household farm, dacha construction, horticultural business and gardening;

   14) incomes of members of peasant (farm) industry received at this farm from production and sale of agricultural
products, as well as from production of agricultural products, processing thereof and sale - within five years counting
from the year of registration of the specified farm.

  This norm shall apply to incomes of the members of the peasant (farm) industry referring to whom this nor has not
been applied so far (the paragraph is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of
29 December 2000);

   15) incomes of taxpayers received from collection and delivery of medicinal herbs, wild berries, nuts and other fruit,
mushrooms, other wild growing products to organizations and (or) sole traders having a permit (license) for procuring
(purchase) of wild growing plant, mushrooms, technical medicinal vegetable raw materials except incomes received
by sole traders form re-selling products specified in this subclause;

   16) incomes (except remuneration of labour of hired labourers) received b members of registered tribal, family
communities of small peoples of the North involved in traditional industries from sale of products received as a result
of traditional works (the clause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29
December 2000);

   17) incomes of amateur hunters received from delivery of furs, fur or leather raw materials or meat of wild animals
hunted by them, to associations of hunters, organizations of consumer cooperation or state unitary enterprises, if
hunting of these animals is provide in the presence of licenses issued according to the procedure established by the
effective legislation;

   18) incomes in pecuniary form and in kind received from natural persons, inherited except remuneration paid to
heirs (legal successors) of authors of works of science, literature, art, as well as discoveries, inventions and
production samples (the clause is in the wording enforced from 1 January 2006 by the Federal act N 78-FZ of 1 July
2005, - see the previous wording);
   18_1) incomes in pecuniary form and in kind received from natural persons as a gift, except for the cases of gifting
real estate, vehicles, stocks, shares, unless otherwise stipulated by this clause.

   The incomes received as a gift shall be exempted from the taxation if the giftor and giftee are members of family
and (or) close relatives according to the Family code of the Russian Federation (spouses, parents and children,
including adoptive relatives and adopted children, grandfather, grandmother and grandsons, full and not full (having
the common father or mother) brothers and sisters (the clause has been added since 1 January 2006 by the Federal
act N 78-FZ of 1 July 2005).

  19) incomes received from joint-stock companies or other organizations:

   by stockholders of these joint-stock companies or participants of other organizations as a result of revaluation of
fixed assets (funds) in the form of additional stocks (shares, stakes) distributed between the stockholders or
participants of the organization proportionately to their stake and type of stocks, or as the difference between the new
and original par value of stocks or their property stake in the authorized capital;

   by stockholders of these joint-stock companies or participants of other organizations when reorganization providing
for distribution of stocks (shares, stakes) of the created organizations between stockholders (participants, stakers) of
the reorganized organizations and (or) convertion (exchange) of stocks (shares, stakes) of the reorganized
organization into stocks (shares, stakes) of the created organization or organization to which adjoining is carried out in
the form of additional obtained or exchanged stocks (shares, stakes);
   (The clause is in the wording enforced from 31 January 2005 by the Federal act N 212-FZ of 30 December 2004,
the effect shall apply to legal relations arising from 1 January 2004, - see the previous wording);

   20) prizes in pecuniary form and (or) in kind obtained by sportsmen, including disabled sportsmen, for prize-
winning places at the following sport competitions (the paragraph is supplemented from 4 August 2004 by the Federal
act N 62-FZ on 30 June 2004, - see the previous wording):

  Olympic, Para-Olympic, Surdo-Olympic games, World Chess Championships (Champion Cups), championships
and world and European cups from official organizers or on the basis of decisions of state authorities and local self-
management bodies for the account of certain budgets(The paragraph has been added since 4 August 2004 by the
Federal act N 62-FZ on 30 June 2004, - see the previous wording);

  Championships and cups of the Russian Federation from official organizers;

  21) sums paid by organizations and (or) natural persons to orphans under 24 for education in education institutions
having certain licenses, or to these institutions for their education (the clause is in the wording enforced from 1
January 2001 by the Federal act No 166-FZ of 29 December 2000);

  22) sums of payment for the disabled by organizations or sole traders for technical means of prevention of disability
and rehabilitation of the disabled, as well as payment for acquisition and maintenance of guide dogs for the disabled;

  23) remuneration paid for transfer of hidden treasures to state ownership;

   24) incomes received by sole traders from performance by them of those activities on which they pay the uniform
tax on imputed income for certain types of activities, as well as whose taxation involves simplified taxation system and
taxation system for agricultural producers (uniform agricultural tax) (the clause has been added to since 31 August
2002 by the Federal act No 104-FZ of 24 July 2002, - see the previous wording);

  25) sums of interest on state treasury obligations, bonds and other state securities of the former USSR, the
Russian federation and components of the Russian Federation, as well as on bonds and securities issued by the
decision of representative authorities of local self-management;

    26) incomes received by orphan children and children - members of the families whose incomes per one member
do not exceed the subsistence level from charitable funds registered according to the established procedure, and
religious organizations;

  27) incomes in the form of interest received by taxpayers on deposits in banks located on the territory of the
Russian federation, if:

   interests on ruble deposits shall be paid within the sums calculated on the basis of the effective RF Central Bank
refinancing rate during the period for which these interests were charged;
   the established rate does not exceed 9% per annum for deposits in foreign currency;
   (The clause is in the wording enforced from 28 June 2003 by the Federal act No 55-FZ of 22 May 2003, - see the
previous wording )

   28) incomes which do not exceed 4000 rubles received for each of the following grounds for the tax period (the
paragraph is in the wording enforced from 1 January 2006 by the Federal act N 71-FZ of 30 June 2005, - see the
previous wording):

  cost of presents received by the taxpayer from organizations or sole traders (the paragraph is in the wording
enforced from 1 January 2006 by the Federal act N 78-FZ of 1 July 2005, - see the previous wording);

   cost of prizes in pecuniary form and in kind received by taxpayers at competitions and contests held in accordance
with the decisions of the RF Government, legislative (representative) state authorities or representative local-self-
management bodies;

   sums of material aid rendered by employers to their employees, as well as to their former workers who resigned as
a pensioner of age or disability;

   compensation (payment) by employers to their employees, their spouses and children, their former workers
(pensioners of age), as well as the disabled for the cost of acquisition by them (for them) of medicines confirming
actual expenses for acquisition of these medicines (the paragraph has been added to from 1 January 2001 by the
Federal act No 166-FZ of 29 December 2000);

  cost of any winnings and prizes obtained in contests, games and other events intended for advertising goods
(works, services);

  welfare amounts being paid to invalids by non-governmental organizations of invalids (the paragraph has been
added since 1 January 2005 by the Federal act N 103-FZ on 20 August 2004).

   29) incomes of soldiers, seamen, sergeants and sergeant-majors taking up military service by call, as well as
persons called for military training, in the form of pecuniary allowance, daily allowance and other sums received at the
place of service or place of military training (the paragraph is in the wording enforced from 1 January 2001 by the
Federal act No 166-FZ of 29 December 2000);

   30) sums paid to natural persons by election commissions, referendum commissions, as well as from election
funds of candidates, candidates registered for position of the President of the Russian Federation, candidates,
candidates registered for deputies of the State Duma, candidates, candidates registered for deputies of the legislative
(representative) state authority of the component of the Russian Federation, candidates, candidates registered for the
position of the head of executive power of the component of the Russian Federation, candidates, candidates
registered for elected local self-management body, candidates, candidates registered for the position of the head of
municipal formation, candidates, candidates registered for a position in another federal state authority, state authority
of the component of the Russian Federation provided by the Constitution of the Russian Federation, constitution,
charter of the component of the Russian Federation and elected directly by citizens, candidates, candidates registered
for another position in the local self-management body provided by the charter of the municipal formation and filled by
means of direct elections, electoral funds of electoral associations, electoral funds of regional branches of the political
parties which are not being electoral associations, from referendum funds of initiative group for holding a referendum
of the Russian Federation, referendum of the component of the Russian Federation, local referendum, initiative
propaganda group of referendum of the Russian Federation, other groups of referendum participants of the subject of
the Russian Federation, local referendum for performance by these persons of works directly connected with holding
electoral campaigns, referendum campaigns (the paragraph is in the wording enforced from 1 January 2006 by the
Federal act N 93-FZ of 21 July 2005, - see the previous wording);

  31) payments made by trade union committees (as well as materials aid) for members of trade unions for the
account of membership fees, except remuneration and other payments for performance of labour duties, as well as
payments made by youth and children organizations to their members from the membership fees to cover expenses
connected with holding cultural-mass, physical culture and sport events (the clause has been added to from 1 January
2001 by the Federal act No 166-FZ of 29 December 2000);

   32) winnings on the RF state loan bonds and sums received to redeem these bonds (the clause has been added
from 2 July 2001 by the federal act No 71-FZ of 30 May 2001, the effect shall apply to legal relations arising from 1
January 2001).
   33) aid (in pecuniary and in kind), and also gifts which are received by veterans of the Great Domestic war, invalids
of the Great Domestic war, widows of the military men who have died during war with Finland, the Great Domestic
war, war with Japan, widows of the died invalids of the Great Domestic war and former prisoners of nazist
concentration camps, prisons and ghetto, and also the former minor prisoners of concentration camps, ghetto and
other places of the compulsory maintenance created by fascists and their allies during the Second world war, in the
part not exceeding 10000 roubles for the tax period (the clause has been added from 1 January 2006 by the Federal
act N 71-FZ of 30 June 2005).



                                    Article 218. Standard tax deductions
   1. When determining the taxable base according to clause 2 of article 210 of this Code, the taxpayer shall have the
right for the following standard tax deductions:

  1) at the amount of 3000 rubles for each month of the tax period, referring to the following categories of taxpayers:

  persons who got or recovered from the radiation sickness and other diseases connected with radiation influence
because of the catastrophe at Chernobyl Atomic Power Station or works on liquidation of results of the catastrophe at
Chernobyl Atomic Power Station;

   persons who became disabled as a result of the catastrophe at Chernobyl Atomic Power Station from those who
took part in liquidation of the results of the catastrophe within the alienation zone of the Chernobyl Atomic Power
Station or involved in operation or other works at the Chernobyl Atomic Power Station (including those temporarily
sent or directed), military men and persons liable to military service called to special training and attracted to
performance of works connected with liquidation of results of the catastrophe at Chernobyl Atomic Power Station,
regardless of the place of dislocation of these persons and works performed by them, as well as officers and soldiers
of bodies of internal affairs, State Fire Service, who did their service in the alienation zone, persons evacuated from
the alienation zone of the Chernobyl Atomic Power Station and resettled from the eviction zone or those who moved
away from these zones on a voluntary basis, persons who delivered their bone marrow to save lives of people who
suffered as a result of the catastrophe at Chernobyl Atomic Power, regardless of the time that passed from the day of
the bone marrow transplantation operation and development of disability of these persons in connection with that (the
paragraph is supplemented from 1 January 2003 by the Federal act No 116-FZ of 25 July 2002, - see the previous
wording);

  persons who took part in 1986-1987 in works on liquidation of results of the catastrophe at Chernobyl Atomic
Power Station within the alienation zone of the Chernobyl Atomic Power Station or involved during this period in works
connected with evacuation of the population, material values, agricultural animals, operation or other works at the
Chernobyl Atomic Power Station (including those temporarily sent or directed);

   military men, citizens dismissed from military service, as well as persons liable to military service, called to special
training and attracted to performance of works connected with liquidation of results of the catastrophe at Chernobyl
Atomic Power Station, including flying and engineering personnel of civil aviation, regardless of the place of
dislocation and works performed by them (the paragraph is in the wording enforced from 1 January 2001 by the
Federal act No 166-FZ of 29 December 2000);

    officers and soldiers of bodies of internal affairs, State Fire Service, as well as citizens dismissed from military
service who did the service in 2986-2987 in the alienation zone of the Chernobyl Atomic Power Station (the paragraph
is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000; added to from 1
January 2003 by the Federal act No 116-FZ of 25 July 2002, - see the previous wording);

   military men, citizens dismissed from military service, as well as persons liable to military service, called to special
training, who took part in 1988-1990 in works on “Shelter” project (the paragraph is in the wording enforced from 1
January 2001 by the Federal act No 166-FZ of 29 December 2000);

   persons who became disabled, got or recovered from the radiation sickness and other diseases as a result of the
accident at the production association “Mayak” and discharge of radioactive wastes into the Techa river, from the
persons who took (including those sent or directed) in 1957-1958 direct part in works on liquidation of the results of
the accident in 1957 at the production association “Mayak”, as well as those involved in protective operations and
rehabilitation of territories contaminated with radioactive elements along the Techa river in 1949-1956, persons who
took (including those sent or directed) in 1959-1961direct part in works on liquidation of the results of the accident in
1957 at the production association “Mayak”, persons evacuated (resettled), as well as those who voluntarily left the
settlements exposed to radioactive contamination as a result of the accident at the production association “Mayak”
and discharge of radioactive wastes into the Techa river, including children, as well as babies who on the date of
evacuation (resettlement) were in the state of intrauterine fetus, as well as military men, hired volunteers of military
units and special contingent, who were evacuated in 1957 from the zone of radioactive contamination (citizens who
left voluntarily are those who left from 29 September 1957 till 31 December 1958 from settlements exposed to
radioactive contamination as a result of the accident in 1957 at the production association “Mayak”, as well as people
who left from 1949 till 1956 inclusive from settlements exposed to radioactive contamination as a result of discharge of
radioactive wastes into the Techa river), persons who live in settlements exposed to radioactive contamination as a
result of the accident in 1957 at the production association “Mayak” and discharge of radioactive wastes into the
Techa river, where the annual average efficient equivalent dose of radiation was on the 20-th of May 1993 higher than
1 m3v (additionally compared to the level of the natural radioactive background for this area), persons who left
voluntarily for a new place of residence from settlements exposed to radioactive contamination as a result of the
accident in 1957 at the production association “Mayak” and discharge of radioactive wastes into the Techa river,
where the annual average efficient equivalent dose of radiation was on the 20-th of May 1993 higher than 1 m3v
(additionally compared to the level of the natural radioactive background for this area);

   persons who directly took part in tests of nuclear weapons in the atmosphere and combat radioactive substances,
training using these weapons before 31 January 1963;

   persons who directly took part in underground tests of nuclear weapons under conditions of emergency radiation
situations and effect of other destruction factors of nuclear weapons;

   persons who directly took part in liquidation of radiation accidents at nuclear installations of water surface and
underwater vessels and at other military installations, and registered in accordance with the established procedure by
federal executive body authorized in area of defense (paragraph is in the wording enforced since 2 August 2004 by
the Federal act N 58-FZ on 29 June 2004, - see the previous wording);

  persons participating directly in the works (including military men) on assembling nuclear charges before 31
December 1961;

   persons participating directly in underground tests of nuclear weapons, performance and provision of work on
collection and burial of radioactive substances;

  the disabled of the Great Patriotic War;

   the disabled from military men who became disabled of the I, II and III groups because of a wound, contusion or
injury got in defense of the USSR, the Russian Federation or performance of other duties of the military service, or as
a result of a disease connected with stay at the front line, or from former partisans, as well as other categories of the
disabled equaled according to their pension to the above mentioned categories of military men;

   2) tax deduction at the amount of 500 rubles each month of the tax period shall apply to the following categories of
taxpayers:

  Heroes of the Soviet Union and Heroes of the Russian Federation, as well as persons awarded with the Order of
Glory of three degrees;

   Contract personnel of the Soviet Army and the USSR Navy, USSR bodies of internal affairs and USSR state
security service, who took positions on the staff of military units, headquarters and institutions within the Field Forces
during the Great Patriotic War, or persons staying during this period in the cities, whose defense was included for
these people in the length of service for assignment of pension on privileged terms established for military men of
units of the Field Forces;

   participants of the Great Patriotic War, combat operations for protection of the USSR from military men who served
in military units, headquarters and institutions within the army and former partisans (the paragraph has been added
from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000);

  persons who stayed in Leningrad during the siege during the Great Patriotic War from 8 September 1941 till 27
January 1944, regardless of the term of stay;

  former prisoners of concentration camps, ghetto and other places of compulsive detention created by fascist
Germany and its allies during the second world war;
  disabled persons from childhood, as well as the disabled of I and II groups;

   persons who caught or recovered from radiation sickness and other diseases connected with radiation caused by
radiation accidents at civil and military atomic projects, as well as resulting from tests, training and other works
connected with any type of nuclear installations including nuclear weapons and space technology;

   junior and medium medical personnel, doctors and other workers of medical institutions (except persons whose
professional activity is connected with work with any types of ionizing irradiation sources in radiation situation at their
working place corresponding to the profile of the work performed), who have got excessive dozes of radiation, when
rendering medical aid during the period from 26 April till 30 June 1986, as well as persons who suffered as a result of
the catastrophe at the Chernobyl Atomic Power Station and are the source of ionizing irradiation;

  person who delivered their bone marrow to save people’s lives;

   workers and employees, as well as former military men and dismissed officers and soldiers of bodies of internal
affairs, State fire service, employees of institutions and bodies of the criminal-executive system who caught
professional diseases connected with radiation influence during work in the alienation zone of Chernobyl Atomic
Power Station (the paragraph has been added to from 1 January 2003 by the Federal act N 116-FZ of 25 July 2002, -
see the previous wording);

   persons (including those sent or officially directed) who took part in 1957-1958 direct part in works on liquidation of
results of the accident in 157 at the production association “Mayak”, as well as those involved in works on taking
protective measures and rehabilitation of territories along the Techa river exposed to radioactive contamination in
1949-1956;

    persons evacuated (resettled), as well as those who left voluntarily from settlements exposed to radioactive
contamination as a result of the accident in 1957 at the production association “Mayak” and discharge of radioactive
wastes into the Techa river, including children, as well as those who at the moment of evacuation were at the stage of
intrauterine fetus development, as well as former military men and hired personnel of military units and special
contingent, who were evacuated in 1957 from the zone of radioactive contamination. Persons who left on a voluntary
basis include those who left from 29 September 1957 till 31 December 1958 inclusive from settlements exposed to
radioactive contamination as a result of the accident in 1957 at the production association “Mayak”, as well as those
who left from 1949 till 1956 inclusive from settlements exposed to radioactive contamination as a result of discharge of
radioactive wastes into the Techa river;

   persons evacuated (as well as those who left voluntarily) in 1986 from the alienation zone of Chernobyl Atomic
Power Station exposed to radioactive contamination as a result of the catastrophe at Chernobyl Atomic Power Station,
or resettled, including those who left voluntarily) from the evacuation zone in 1986 and subsequent year, including
children, as well as those who at the moment of evacuation were at the stage of intrauterine fetus development;

   parents and spouses of military men who deceased as a result of a wound, contusion or injury got during defense o
the USSR, the Russian Federation or performance of other duties of military service, or as a result of a disease
connected with stay at the front line, as well as parents and spouses of state employees who deceased while
performing their service duties. This deduction shall be provided to spouses of deceased military men and state
employees, unless they got married once more;

   citizens dismissed from military services or called to military training, those who performed the international duty in
the Republic of Afghanistan and other countries, where combat operations were conducted;

   3) tax deduction at the amount of 400 rubles for each month of the tax period shall apply to those categories of
taxpayers who are not mentioned in subclauses 1-2 of clause 1 of this article, and shall be effective until the month
when their cumulative income calculated from the beginning of the tax period (referring to which the tax rate is
provided established by clause 1 of article 224 of this Code) by the fiscal agent providing this standard tax deduction,
exceeded 20000 rubles. Beginning from the month when this income exceeded 20000 rubles the tax deduction
provided by this subclause shall not be applied (the subclause is in the wording enforced from 10 August 2003 by the
Federal act N 105-FZ of 7 July 2003, the effect shall apply to legal relations arising from 1 January 2003, - see the
previous wording);

  4) the tax deduction at the amount of 600 rubles for each month of the tax period shall be applied to:

  every child of taxpayers securing this child, who are the parents or spouses of the parents;
  every child of taxpayers who are guardians or trustees, adopted parents.

   This above-mentioned tax deduction shall be valid until the month where the cumulative income of the taxpayers
calculated since the beginning of the tax period (referring to which the tax rate is provided, established by clause 1 of
article 224 of this Code) by the fiscal agent presenting this standard tax deduction exceeded 40000 rubles. Beginning
from the month where the above-mentioned tax deduction exceeded 40000 rubles the tax deduction provided by this
subclause shall not be applied.

   The tax deduction established by this subclause shall be made for each child under 18, as well as for each student
of the day department, post-graduate student, intern, student, student of a military institution under 24 from the
parents and (or) spouses of the parents, guardians or trustees, adopted parents.

  This tax deduction shall be doubled, if the child under 18 is a disabled, as well as if the student of the day
department, post-graduate student, intern, student under 24 is a disabled of the I or II category.

   The tax deduction for widows (widowers), single parents, guardians or trustees, adopted parents shall be provided
at the double rate. Provision of the above-mentioned tax deduction to widows (widowers), single parents shall be
stopped since the month of their marriage.

  The above-mentioned tax deduction shall be granted to widows (widowers), single parents, guardians or trustees,
adopted parents on the basis of their written applications and documents confirming the right for this tax deduction.
This deduction shall be granted to foreign natural persons whose child (children) are outside the Russian Federation
on the basis of the documents certified by competent authorities where this child (children) live.

  For purposes of this article single parents shall mean one of the parents whose marriage is not registered.

    The tax base shall be reduced since the month of birth of a child (children) or the month when guardianship
(trusteeship) is established, or since the month when the contract of transfer of the child (children) for bringing up to a
family was made, and maintained until the end of the year when the child (children) reached the age specified in
paragraph five and six of this subclause, or in the case of expiration of the validity period or cancellation of the
contract of transfer of the child (children) for bringing up to a family ahead of the time, or in the case of the death of
the child (children). The tax deduction shall be granted for the period of education of the child (children) in an
educational institution including the academic leave executed during the educational period according to the
established procedure.
    (The subclause is in the wording, enforced since 1 February 2005 by the Federal Act N 203-FZ of 29 December
2004, the effect shall apply to legal relations arising from 1 January 2005, - see the previous wording)

   2. Taxpayers having the right to more than one standard tax deduction shall be provided with the maximum of the
corresponding deductions.

   The standard tax deduction established by subclause 4 of clause 1 of this article shall be provided regardless of the
standard tax deduction established by subclauses 1-3 of clause 1 of this article.

   3. Standard tax deductions established by this article shall be provided for the taxpayer by one of the fiscal agents
being the source of income payment, at the taxpayer’s choice on the basis of their written application and documents
confirming the right to these tax deductions (the paragraph is in the wording enforced from 10 August 2003 by the
Federal act N 105-FZ of 7 July 2003, the effect shall apply to legal relations arising from 1 January 2003, - see the
previous wording).

   If the taxpayer starts working not from the first month of the tax period, tax deductions provided by subclauses 3
and 4 of clause 1 of this article shall be granted at the place of work with the account of the income received from the
beginning of the tax period at another place of work, where the taxpayer had tax deductions. The sum of the received
income shall be confirmed by the reference on incomes received by the taxpayer, issued by the fiscal agent according
to clause 3 of article 230 of this Code (the paragraph has been added from 1 January 2001 by the Federal act N 166-
FZ of 29 December 2000).

   4. If during the tax period standard tax deductions were not granted to the taxpayer or were granted in a smaller
volume than provided by this article, then upon expiration of the tax period, on the basis of a taxpayer’s application
attached to the tax declaration and documents confirming the right to these deductions, the fiscal agency shall provide
recalculation of the taxable base with the account of standard tax deductions at the amounts provided by this article.
                                      Article 219. Social tax deductions
   1. When determining the size of the taxable base in accordance with clause 2 of article 210 of this Code, the
taxpayer shall have the right for the following social tax deductions:

   1) in the sum of incomes transferred by the taxpayer for charitable purposes in the form of pecuniary aid to
organizations of science, culture, education, public health and social security, partly or fully financed from the
corresponding budgetary funds, as well as to organizations of physical culture and sport, educational and pre-school
institutions for purposes of physical education of citizens and maintenance of sport teams, as well as in the sum of
donations transferred (paid) by the taxpayer to religious organizations for performance by them of chartered activity -
at the amount of expenses actually made, but not more than 25% of the sum of income gained in the tax period (the
subclause has bee added to from 1 July 2002 by the Federal act N 57-FZ of 29 May 2002; the effect shall apply to
relation arising from 1 January 2002, - see the previous wording);

   2) in the sum paid by the taxpayer in the tax period for their education in educational institutions - at the amount of
expenses actually made for education, but not more than 38000 rubles, as well as in the sum paid by parent taxpayer
for their children under 24, guardian (trustee) taxpayer for education of their wards under 18 in educational institutions
on the day basis - at the amount of expenses actually made for education, but not more than 38000 rubles per each
child in the total sum per both parents (guardian or trustee) (the paragraph has been added to from 9 June 2003 by
the Federal act No 51-FZ of 6 May 2003; the effect shall apply to legal relations arising from 1 January 2003; in the
wording enforced from 10 August 2003 by the Federal act N 110-FZ of 7 July 2003, the effect shall apply to legal
relations arising from 1 January 2003, - see the previous wording).

    The right to obtain this social tax deduction shall apply to taxpayers who perform trustee’s or guardian’s duties over
citizens, who were their wards, after termination of the guardianship or trusteeship, when the taxpayer pays for
education of these citizens under 24 in educational institutions on the day basis (the has been added from 9 June
2003 by the Federal act N 51-FZ of 6 May 2003, the effect shall apply to legal relations arising from 1 January 2003).

   This social tax deduction shall be provided, if the educational institution has a certain license or another document
confirming the status of the institution, as well as if the taxpayer presents documents confirming their actual expenses
for education.

  Social tax deduction shall be provided for the period of education of the above mentioned persons in an
educational institution including the academic leave executed according to the established procedure during the
education process.

   3) in the sum paid by the taxpayer in the tax period for treatment services provided to them by medical institutions
of the Russian Federation, as well as paid by the taxpayer for treatment of their spouse, parents and (or) their children
under 18 in medical institutions of the Russian Federation (according to the list of medical services approved by the
RF Government) as well as at the amount of the cost of medicines (according to the list of medicines approved by the
RF Government), prescribed to them by their doctor, acquired by taxpayers for the account of their own funds.

    The total sum of the social tax deduction provided by this subclause may not exceed 38000 rubles (the paragraph
is in the wording enforced from 10 August 2003 by the Federal act N 110-FZ of 7 July 2003, the effect shall apply to
legal relations arising from 1 January 2003, - see the previous wording).

   For expensive types of treatment in medical institutions of the Russian Federation, the sum of the tax deduction
shall be taken at the amount of expenses actually made. The list of expensive types of treatment shall be approved by
the decree of the RF Government.

   Deduction of the cost of treatment shall be provided to the taxpayer, if the treatment takes place in medical
institutions having certain licenses for carrying out medical activities, as well as if the taxpayer presents documents
confirming his (her) actual expenses for treatment and acquisition of medicines.

  The above mentioned social tax deduction shall be provided to the taxpayer, if payment for treatment and acquired
medicines was not made abroad from employer’s funds

  2. Social tax deductions shall be provided on the basis of a written application of the taxpayer, when the latter
submits the customs declaration to the fiscal agency upon expiration of the tax period (the clause is in the wording
enforced from 1 January 2001 by the Federal act N 166-FZ of 29 May 2000).
                                    Article 220. Property tax deductions
   1. When determining the size of the taxable base in accordance with clause 2 of article 10 of this Code, the
taxpayer has the right for the following property tax deductions:

   1) in amounts, which a taxpayer gained within taxation period from selling dwelling houses, apartments including
privatized dwelling premises, country cottages, garden houses or land plots and shares in the property aforesaid
being in the taxpayer’s property less than three years, but not exceeding in total 1,000,000 Roubles, as well as
amounts gained within the taxation period from selling other property owned by the taxpayer less than three year, but
not exceeding 125,000 Roubles in total. Tax deduction while selling dwelling houses, apartments including privatized
dwelling premises, country cottages, garden houses and land plots and shares in the property aforesaid being in the
taxpayer’s property three years and more, as well as while selling other property owned by a taxpayer three years and
more, shall be granted in the amount, which a taxpayer received when selling the property aforesaid (the paragraph is
in the wording enforced since 1 January 2005 by the Federal act N 112-FZ on 20 August 2004, - see the previous
wording).

   Instead of using right of property tax deduction, stipulated by this Subclause, a taxpayer is empowered to reduce
amount of taxable income by the amount of actually incurred and proved documentary expenses related to receipt of
this income except for sale of securities owned by the taxpayer. Upon sale of a share (a part of share) in authorized
capital of the company, a taxpayer is also empowered to reduce amount of his taxable income by actually incurred
and documentary proved expenses related to receipt of this income (paragraph is in the wording enforced since 1
January 2005 by the Federal act N 112-FZ on 20 August 2004, - see the previous wording).

   Peculiarities of determining the taxable base, calculation and payment of the tax on incomes from operations with
securities and operations with financial instruments of futures deals, where securities are the basic asset, are
determined by article 214_1 of this Code (the paragraph is in the wording enforced since 2 July 2001 by the Federal
act N 71-FZ on 30 May 2001, - see the previous wording).
   ____________________________________________________________________
   The third paragraph of subclause 1 of clause 1 of this article has lost its force since 1 January 2007 - see the
Federal act N 58-FZ of 6 June 2005.
   ____________________________________________________________________

   The paragraph has been excluded since 2 July 2001 by the Federal act N 71-FZ on 30 May 2001. - See the
previous wording.

   When acquiring property in common share or common joint ownership, the size of the tax deduction calculated
according to this subclause, shall be distributed among the co-owners according to their share of property or their
written application (in the case of acquiring a dwelling house or flat in common joint ownership).

  Provisions of this subclause shall not extended to incomes received from sale of property by sole traders in
connection with providing of entrepreneurial activity;

   In case of realization of stocks (shares, stakes), obtained by the taxpayer when reorganization of the organizations,
term of their presence in the property of the taxpayer is estimated from the date of acquisition in the property of stocks
(shares, stakes) of the reorganized organizations (the paragraph has been added since 14 July 2005 by the Federal
act N 58-FZ of 6 June 2005, the effect shall apply to the legal relations arising from 1 January 2005).

   2) in the amount spent by the taxpayer for new construction or purchase on the Russian Federation territory of
dwelling house, apartment or a share (shares) in those, in the amount of actually incurred charges, as well as in the
amount directed to redemption of interest on purposeful loans (credits), received from credit and other companies in
the Russian Federation and actually spent for a new construction or purchase on the Russian Federation territory of
dwelling house, apartment or share (shares) in those.

   Actually incurred costs of new construction or purchase of dwelling house or a share (shares) in that may include
the following:

  Costs of design estimates;

  Costs of construction and finishing materials;
  Purchase costs of dwelling house including an incomplete one;

  Costs of works or services related to construction (completion of incomplete house) and finishing;

   Costs of connection to electric, water supply, gas supply and sewer systems or construction of autonomous
electric, water, gas and sources and sewerage.

  Actual purchase costs of apartment or a share (shares) in this may include the following:

  Purchase costs of the apartment or rights of apartment in the house under construction;

  Purchase costs of finishing materials;

  Costs of works related to finishing of an apartment.

  Acceptance to deduction of costs of completion and finishing of purchased house or finishing of purchased
apartment is possible in case only the agreement, signed for such acquisition, stipulated purchase of incomplete
dwelling house or non-finished apartment (rights of apartment) or a share (shares) in those.

   The total amount of property tax deduction, stipulated by this Subclause, can not exceed 1,000,000 Roubles less
amounts directed to repayment of interests on purposeful loans (credits) received from credit and other companies of
the Russian Federation and spent actually by the taxpayer for new construction or purchase on the Russian
Federation territory of dwelling house, apartment or a share (shares) in those.

  To prove the right of property tax deduction, a taxpayer shall submit:

  Upon construction or purchase of dwelling house (including incomplete one) or a share (shares) in the one - the
documents confirming property right of the dwelling house or a share (shares) in the one;

   For acquisition of an apartment, share (shares) in the one or rights of an apartment in the house under construction
- a contract for purchase of an apartment, a share (shares) in the one or the rights of the apartment in the house
under construction, transfer deed of an apartment (a share (shares)) in the one to the taxpayer or the documents,
confirming the right of ownership of the apartment or a share (shares) in the one.

    A taxpayer shall be provided with the property tax deduction aforesaid on the basis of his written application, as
well as legally made up payment documents confirming taxpayer’s payment for charges incurred (receipts to credit
slips, bank’s extracts on transfer of funds from the buyer’s account to seller’s account, commodity and cash receipts,
acts of materials’ purchase available at natural persons with indicated addresses and passport data of seller and other
documents).

  Upon purchase of property in common share ownership or common joint ownership, amount of property tax
deduction, calculated according to this Subclause, shall be distributed between co-owners corresponding to their
share (shares) of the property or on the basis of their written application (in case of purchase of dwelling house or
apartment in common joint ownership).

   Property tax deduction, stipulated by this Subclause, shall not apply in the events when costs of construction or
purchase of dwelling house, apartment or a share (shares) in those for a taxpayer are paid for the account of
employers or other persons, and also in the events when bargain for purchase and sale of dwelling house, apartment
or a share (shares) in those is fulfilled by interdependent natural persons according to Clause 2 Article 20 of this
Code.

  Repeated granting of the property tax deduction, stipulated by this Subclause, to a taxpayer shall not be admitted.

    If the property tax deduction can not be fully used within the taxation period, its remainder can be transferred to
following taxation periods till its complete using.
    (The subclause is in the wording enforced since 1 January 2005 by the Federal act N 112-FZ on 20 August 2004, -
see the previous wording).

  2. Property tax deductions (except property tax deductions on operations with securities) shall be provided on the
basis of taxpayer’s application made when submitting the tax declaration to fiscal agencies upon expiration of the tax
period unless otherwise stipulated by this Article (the paragraph is in the wording enforced from 1 January 2001 by the
Federal act No 166-FZ of 29 December 2000; is supplemented from 2 July 2001 by the Federal act N 71-FZ of 30
May 2001; is supplemented from 1 January 2005 by the Federal act N 112-FZ of 20 August 2004, - see the previous
wording).

   When determining the taxable base on operations with securities, the property tax deduction is provided according
to the procedure established by article 214_1 of this Code (the paragraph has been added since 2 July 2001 by the
Federal act N 71-FZ on 30 May 2001).

  3. A property tax deduction, stipulated by Subclause 2 of Clause 1 of this Article, can be granted to a taxpayer
before the end of taxation period upon his applying to employer (hereinafter through this Clause - tax agent) subject to
confirmation of the taxpayer’s right of the property tax deduction by the taxation body according to the format
approved by federal executive body authorized for control and supervision in the area of taxes and duties.

   Taxpayer has the right to get at his option a property tax deduction at one tax agent. Tax agent is obliged to
provide a property tax deduction upon receipt of confirmation of the taxpayer’s right of the property tax deduction,
issued by the tax body.

   The taxpayer’s right to receive a property tax deduction at the taxation agent according to this Clause should be
confirmed by a tax body within 30 calendar days at the most since the day of filing of the taxpayer’s written
application, the documents confirming the right of property tax deduction, specified in Subclause 2 of Clause 1 of this
Article.

   In case the amount of the taxpayer’s income, received from tax agent for the taxation period, has appeared less
amount of the property tax deduction, determined according to Subclause 2 of Clause 1 of this Article, a taxpayer has
the right to receive a property tax deduction in the procedure, stipulated by Clause 2 of this Article.
   (The clause has been added since 1 January 2005 by the Federal act N 112-FZ of 20 August 2004)



                                 Article 221. Professional tax deductions
   When calculating the taxable base in accordance with clause 2 of article 210 of this Code, the following categories
of taxpayers shall have the right to obtain professional tax deductions:

   1) taxpayers specified in clause 1 of article 227 of this Code - at the amount of expenses directly connected with
gaining income, actually made by them and confirmed by documents.

   The composition of these expenses to be accepted for deduction shall be determined independently, in accordance
with the procedure for determining expenses for taxation purposes established by the chapter “Tax on profit of
organizations”. The taxpayer’s expenses specified shall also cover the Duty paid in connection with his professional
activity. (the paragraph is in the wording enforced from 1 July 2002 by the Federal act N 57-FZ of May 2002, the effect
shall apply to legal relations arising from 1 January 2002; has been added since 1 January 2005 by the Federal act N
127-FZ on 2 November 2004, - see the previous wording).

    Sums of the tax on property of natural persons paid by the taxpayers specified in this subclause shall be deducted,
if this property, being the object of taxation in accordance with articles of the chapter “Tax on profit of organizations”
(except dwelling houses, flats, dachas and garages) is directly used for performance of entrepreneurial activity.

   If taxpayers are not able to confirm by documents their expenses connected with the activity as sole traders, the
professional tax deduction shall be made at the amount of 20% of the total sum of the income gained by the sole
trader from the entrepreneurial activity. This provision shall not apply to natural persons performing entrepreneurial
activity without creation of a legal entity, who are not registered as sole traders;

   2) taxpayers gaining incomes from performance of works (rendering services) under civil-legal contracts - in the
sum of expenses actually made by them and confirmed by documents, which are directly connected with performance
of these works (rendering of services),;

    3) taxpayers receiving royalties or remuneration for creation, performance or other use of works of science,
literature and art, royalties to authors of discoveries, inventions and production samples, in the sum of expenses
actually made and confirmed by documents (the clause is in the wording enforced from 1 January 2001 by the Federal
act No 166-FZ of 29 December 2000).
  If these incomes cannot be confirmed by documents, they shall be deducted at the following amounts:

                                                                     Norms of costs (in % to
                                                                      the sum of calculated
                                                                            income)
      Creation of literature works, as well as for theatre,                    20
 cinema, variety and circus

       Creation of works of art and graphic, photo works for                   30
 publication, works of architecture and design

       Creation of works of sculpture, monumental-decorative                   40
 painting, decorative-applied art and design, easel painting, art
 of theatre, cinema decoration art and graphics performed in
 various techniques

      Creation of audio-visual works                                           30
      (video-, television- and cinema films)

       Creation of musical works, musical-stage works (operas,
 ballets, musical comedies), symphonic, choir, chamber works,                  40
 works for brass band, original music for cinema, television and
 video films and stage performances

       Other musical works, including those prepared for
 publication                                                                   25

      Performing works of literature and art                                   20

      Creation of scientific works and developments                            20

      Discoveries, inventions and creation of industrial
 samples (to the sum f income gained for the first two years of                30
 use)

   For purposes of this article, taxpayer’s expenses shall also include sums of the taxes provided by the effective
legislation on taxes and fees for the types of activity specified in this article (except the tax on incomes of natural
persons), charged or paid by them for the tax period (the paragraph has been added from 1 January 2001 by the
Federal act No 166-FZ of 29 December 2000).

   When determining the taxable base, expenses confirmed by documents may not be taken into account at the same
time with expenses within the established norm.

   Taxpayers specified in this article shall implement the right to professional tax deductions by submitting a written
application to the fiscal agent (the paragraph is in the wording enforced from 1 July 2002 by the Federal act N 57-FZ
of May 2002, the effect shall apply to legal relations arising from 1 January 2002, - see the previous wording).

   In the absence of the fiscal agent taxpayers specified in this article shall implement the right for professional   tax
deductions by submitting a written application to the fiscal agency at the same time with submission of the            tax
declaration upon expiration of the tax period (the paragraph is in the wording enforced from 1 July 2002 by            the
Federal act N 57-FZ of May 2002, the effect shall apply to legal relations arising from 1 January 2002, - see          the
previous wording).

  The paragraph has been excluded from 1 July 2002 by the Federal act N 57-FZ of 29 May 2002; the effect shall
apply to relations arising from 1 January 2002.

  The specified taxpayer’s expenses shall also cover the Duty paid in connection with his professional activity (the
paragraph has been added since 1 January 2005 by the Federal act N 127-FZ on 2 November 2004).




                   Article 222. Powers of legislative (representative) authorities
      of components of the Russian Federation on setting forth of social and property
                                      deductions
   Within the sizes of social tax deductions established by article 219 of this Code and property tax deductions
established by article 220 of this Code, legislative (representative) authorities of components of the Russian
Federation may set forth other sizes of deductions, taking into account their regional peculiarities.


                            Article 223. The date of actual receipt of income
   1. For purposes of this chapter, unless otherwise provided by clause 2 of this article, the date of actual receipt of
income shall be determined as the day of:

   1) payment of income, including remittance of income to taxpayer’s account in banks or, by his order, to accounts
of the third parties - when receiving incomes in cash;

  2) transfer of incomes in kind - when receiving incomes in kind;

  3) payment by a taxpayer of interest on obtained borrowed (credit) funds, acquisition of goods (works, services),
acquisition of securities - when receiving of income in the form of material profit (the clause has been added since 1
January 2001 by the Federal law N 166-FZ from 29 December 2000);

   2. When receiving income in the form of remuneration of labour the date of actual receipt of this income by the
taxpayer shall be the last day of the month for which income was charged for him for performed labour obligations in
accordance with the labour contract (the clause is in wording enforced since 1 January 2001 by the Federal law N
166-FZ from 29 December 2000).




                                             Article 224. Tax rates
  1. The tax rate shall be established at the amount of 13%, unless otherwise provided by this article.

  2. The tax rate shall be established at the amount of 35% referring to the following incomes:

  the paragraph has been excluded from 1 July 2002 by the Federal act N 57-FZ of 29 May 2002; the effect shall
apply to relations arising from 1 January 2002, - see the previous wording;

  costs of any wins and prizes gained in competitions, games and other events for purposes of advertising goods,
works and services, in the part of excess of the sizes specified in clause 28 of article 217 of this Code;

   insurance payments under voluntary insurance contracts in the part of excess of the sizes specified in clause 2 of
article 31 of this Code;

   interest incomes on deposits in banks in the part of surplus of the sum calculated on the basis of the effective RF
Central Bank refinancing rate during the period from which the interests were calculated on ruble accounts (except
futures pension deposits placed for not less than 6 months) and 9 per cent per annum in foreign currency (the
paragraph is in the wording enforced from 28 June 2003 by the Federal act N 55-FZ of 22 May 2003, - see the
previous wording);

   sums saved from interests on borrowed (credit) funds, received by taxpayers in the part of excess of amounts
specified in Clause 2 of Article 212 of this Code, except for the income in the form of material profit resulted from
saving of interests on taxpayers’ using purposeful loans (credits) granted by credit and other companies of the
Russian Federation and actually spent by them for new construction or purchase on the Russian Federation territory
of dwelling house, apartment or a share (shares) in those, on the basis of documents supporting purpose-oriented
using of such funds (the paragraph is in the wording enforced since 1 January 2005 by the Federal act N 112-FZ on
20 August 2004, - see the previous wording)

   3. The tax rate is established at the amount of 30% referring to all the incomes received by natural persons who
are not tax residents of the Russian Federation (the paragraph is in the wording enforced from 1 January 2002 by the
Federal act N 110-FZ of 6 August 2001, - see the previous wording).
   4. The tax rate shall be established at the amount of 9% referring to the incomes from share participation in the
activity of organizations received in the form of dividends (the clause has been added from 1 January 2002 by the
Federal act N 110-FZ of 6 August 2001; is in the wording enforced since 1 January 2005 by the Federal act N 95-FZ
on 29 July 2004, - see the previous wording).

  5. The tax rate to income in the form of interest yield on the bonds secured by hypothec and issued before 1
January 2007, and to income of founders of trust management of hypothec security, received on the basis of
purchase of hypothec certificates of participation issued to managers of hypothec security before 1 January 2007,
shall be fixed in amount of 9 per cent (the clause has been added since 1 January 2005 by the Federal act N 112-FZ
on 20 August 2004).




                            Article 225. Procedure for calculation of the tax
   1. The sum of the tax in determining the tax base in accordance with clause 3 of article 210 of this Code shall be
calculated as the interest fraction of the tax base, corresponding to the tax rate established by clause 1 of article 224
of this Code

   The amount of the tax in determining the tax base in accordance with clause 4 of article 210 of this Code shall be
calculated as the interest fraction of the tax base, corresponding to the tax rate.

   2. The total amount of the tax shall represent the sum obtained as a result of addition of the sums of the tax
calculated in accordance with clause 1 of this article.

   3. The total amount of the tax shall be calculated according to the results of the tax period with respect to all
taxpayer’s incomes for which the date of receipt refers to a certain tax period.

  4. The sum of the tax shall be determined in whole rubles. The sum of the tax less than 50 copecks shall be
neglected, those equal to 50 copecks and more being carried over to the whole ruble.




                Article 226. Peculiarities of calculation of the tax by fiscal agents.
                   Procedure and dates of payment of the tax by fiscal agents
   1. Russian organizations, sole traders and permanent representative offices of foreign organizations in the Russian
Federation from which or as a result of relations with which the taxpayer received incomes specified in clause 2 of this
article, must calculate, deduct from the taxpayer and pay the sum of the tax calculated according to article 224 of this
Code with the account of peculiarities provided by this article. The tax on incomes of lawyers shall be calculated,
deducted and paid by the bars, lawyer’s offices and lawyer’s advice bureaus (the paragraph has been added to from 1
January 2001 by the Federal act No 166-FZ of 29 December 2000; in the wording enforced from 1 February 2003 by
the Federal act N 187-FZ of 31 December 2002, - see the previous wording).

   Russian organizations, sole traders and permanent representative offices of foreign organizations, the bars and
institutions thereof in the Russian Federation specified in this clause are called in this chapter fiscal agents (the
paragraph is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000).

   2. Calculation of sums and payment of the tax according to this article shall be made referring to all taxpayer’s
incomes whose source is a fiscal agent, except the incomes referring to which calculation and payment of the tax is
made in accordance with articles 214_1, 227 and 228 of this Code, with the offset of previously deducted sums of the
tax (the clause has been added to from 2 July 2001 by the Federal act No 71- FZ of 30 May 2001, - see the previous
wording).

   3. Fiscal agents shall calculate sums of the tax cumulative from the beginning of the tax period according to the
results of each month applicable to all the incomes referring to which the tax rate is applied established by clause 1 of
article 224 of this Code, calculated for the taxpayer for this period, with the offset of the sum of the tax deducted in
previous months of the current tax period (the paragraph has been added to from 1 January 2001 by the Federal act
No 166-FZ of 29 December 2000).
   The sum of the tax applicable to incomes referring to which other tax rates are applied shall be calculated by the
fiscal agent separately for each sum of this income surcharge on the taxpayer.

   The sum of the tax is calculated without incomes received by the taxpayer from other fiscal agents and sums of the
tax deducted by other fiscal agents

  4. Fiscal agents must deduct the charged sum of the tax directly from taxpayer’s incomes at their actual payment.

   The calculated sum of the tax shall be deducted by the fiscal agent for the account of any pecuniary funds paid by
the fiscal agent to the taxpayer, with actual payment of these pecuniary funds to the taxpayer or, at their request, to
the third parties. The deducted sum of the tax may not exceed 50% of the sum of payment.

   5. If it is not possible to deduct from the taxpayer the calculated sum of the tax, the fiscal agent must inform the
fiscal agency at the place of registration thereof on impossibility of deducting the tax and the sum of taxpayer’s
indebtedness within one month as soon as the respective circumstances occur. In particular, impossibility of deducting
the tax shall mean the cases when it is clear in advance that the period during which the sum of the calculated tax
may be deducted will exceed 12 months.

   6. Fiscal agents must transfer sums of calculated and deducted tax not later than the date of actual receipt in the
bank of cash pecuniary funds for income payment, as well as the date of transfer of the income from accounts of the
fiscal agents in the bank to the accounts of the taxpayer or, at their request, to accounts of the third parties in banks.

   In other cases fiscal agents shall transfer sums of calculated and deducted tax not later than the date following
actual receipt of the income by the taxpayer - for incomes paid in pecuniary form, as well as the date following the
date of actual deduction of the calculated sum of the tax - for incomes received by the taxpayer in kind or in the form
of material profit.

   7. The aggregate sum of the tax calculated and deducted by the fiscal agent from the taxpayer referring to whom
they are considered the source of income, shall be paid at the place of registration of the fiscal agent in the fiscal
agency (the paragraph is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December
2000).

   Fiscal agents - Russian organizations specified in clause 1 oft his article, having independent subdivisions, must
transfer calculated and deducted sums of the tax both at the place of their location and at the place of location of each
of their independent subdivision (the paragraph is in the wording enforced from 1 January 2001 by the Federal act No
166-FZ of 29 December 2000).

  The sum of the tax to be paid to the budget at the place of location of the local subdivision shall be determined
basing on the sum of income to be taxed, charged and paid to employees of these independent subdivisions.

    8. The aggregate sum of the tax exceeding 100 rubles, deducted by the fiscal agent from incomes of natural
persons referring to whom he is considered the source of income, shall be transferred to the budget according to the
procedure established in this article. If the aggregate sum of the tax to be paid to the budget is less than 100 rubles, it
is to be added to the sum of the tax to be transferred to the budget in the following month but not later than December
of the current year.

  9. Payment of the tax from the funds of fiscal agents shall not be admitted. When making contracts and other
deals, it is banned to include therein tax reservations according to which fiscal agents undertake obligations to take
expenses connected with payment of the tax for natural persons.




                 Article 227. Specific features of calculation of sums of the tax
               by sole proprietors and other persons involved in private practice.
               Procedure and dates of payment of the tax, procedure and dates of
                        payment of advance payments by these persons
  1. Calculation and payment of the tax in accordance with this article shall be performed by the following taxpayers:

   1) persons registered in accordance with the legal procedure and performing business activity without creation of a
legal entity - on sums of incomes drawn from performance of this activity;
  2) private notaries and other persons involved in private practice in accordance with the effective legal procedure -
on sums of the tax drawn from this activity.

   2. Taxpayers specified in clause 1 of this article shall calculate sums of the tax to be paid to the following budget
independently, in accordance with the procedure established by article 225 of this Code.

  3. The total amount of the tax to be paid into a certain budget shall be calculated by a taxpayer, taking into account
sums of the tax deducted by fiscal agents in payment of income to the taxpayer, as well as sums of advance
payments of the tax, that are actually paid into the certain budget.

  4. Losses of previous years incurred by a person shall not reduce the tax base.

   5. Taxpayers specified in clause 1 of this article must submit to the fiscal agency at the place of their registration a
certain tax declaration within the terms established by article 229 of this Code. (the second sentence has been
excluded since 1 January 2001 by the Federal law N 166-FZ from 29 December 2000);

   6. The total amount of the tax to be paid into a certain budget, calculated in accordance with the tax declaration,
taking into account provisions of this article shall be paid at the place of registration of the taxpayer not later than July
15 oft he year following the expired tax period (the clause is in wording enforced since 1 January 2001 by the Federal
law N 166-FZ from 29 December 2000).

   7. If taxpayers specified in clause 1 of this article has got incomes during the year, drawn from performance of
business activity or private practice, the taxpayers must submit a tax declaration, stating the sum of the supposed
income from the stated activity in the current tax period, to a fiscal agency within 5 days upon expiration of a month
from the date when these incomes appeared. The sum of supposed income shall be determined by the taxpayer.

   8. Calculation of the sum of advance payments shall be made by a fiscal agency. Calculation of sums of advance
payments for the current tax period shall be made by a fiscal agency on the basis of the amount of supposed income,
mentioned in the tax declaration, the an amount of income actually drawn from types of activity stated in clause 1, for
the previous tax period, taking into account tax deductions provided by articles 218 and 221 of this Code.

  9. Advance payments shall be paid by a taxpayer on the basis of tax notifications:

  1) for January-June - not later than July 15 of the current year at the amount of a half of the annual amount of
advance payments;

  2) for July-September - not later than October 15 of the current year at the amount of a quarter of the annual
amount of advance payments;

  3) for October-December - not later than January 15 of the next year at the amount of a quarter of the annual
amount of advance payments.

   10. In the case of a considerable increase or decrease (by more than 50%) of income in a tax period, a taxpayer
must submit another tax declaration, stating the sum of supposed income from performance of activity mentioned in
clause 1 of this article, for the current year. In this case a fiscal agency shall recalculate the sums of advance
payments for the current year for the dates of payment that have not started.

  Recalculation of sums of advance payments shall be performed by a fiscal agency not later than 5 days from the
date the new tax declaration was submitted.



                    Article 228. Peculiarities of calculation of the tax referring to
                    Various types of incomes. Procedure for payment of the tax
   1. Calculation and payment of the tax according to this article shall be provided by the following categories of
taxpayers:

  1) natural persons - basing on the sums of remuneration received from natural persons who are not fiscal agents,
on the basis of civil-legal contracts, including incomes under employment contracts or lease of any property (the
subclause is in the wording enforced from 5 January 2002 by the Federal act N 158-FZ of 29 November 2001, - see
the previous wording);

  2) natural persons - basing on the sums received from selling property belonging to these persons on the right of
ownership (the subclause has been added from 5 January 2002 by the Federal act N 158-FZ of 29 November 2001);
  ____________________________________________________________________
  Subclauses 2-4 of the previous wording shall be subclauses 3-5 of this wording from 5 January 2002 - Federal act
No 158-FZ of 29 November 2001.
  ____________________________________________________________________

  3) natural persons - tax residents of the Russian Federation receiving incomes from sources staying outside The
Russian Federation, - basing on the sum of these incomes;

  4) natural persons, receiving other incomes on which the tax was not deducted by fiscal agents, - basing on the
sum of these incomes;

   5) natural persons, receiving prizes paid by organizers of lotteries, the Totes and other risk based games (including
those using gambling machines) - basing on the sum of these incomes (the subclause has been added from 2 July
2001 by the Federal act N 71-FZ of 30 May 2001; added to from 1 July 2002 by the Federal act No 57-FZ of 29 May
2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording).

   2. Taxpayers specified in clause 1 of this article calculate sums of the tax to be paid to the certain budget
independently according to the procedure established by article 225 of this Code.

   The total sum of the tax to be paid to the corresponding budget shall be calculated by the taxpayer with the account
of the sums of the tax deducted by fiscal agents when paying income to the taxpayer. Losses of previous years
incurred by the natural person shall not reduce the taxable base.

   3. Taxpayers specified in clause 1 of this article must submit the appropriate tax declaration to the fiscal agency at
the place of registration.

  The paragraph has been excluded from 1 January 2001 by the Federal act No 166- FZ of 29 December 2000.

  4. The total sum of the tax to be paid to the corresponding budget calculated basing on the tax declaration with the
account of provisions of this article, shall be paid at the place of residence of the taxpayer not later than 15 July of the
year following the expired tax period..

   5. Taxpayers who received incomes, on which the sum of the tax had not been deducted by fiscal agents, shall pay
the tax in equal shares by two payments: the first - within 30 days following the receipt of a tax notification for payment
of the tax, the second - within 30 days following the first date of payment.




                                           Article 229. Tax declaration
  1. A tax declaration shall be submitted by taxpayers specified in articles 227 and 228 of this Code.

  A tax declaration shall be submitted not later than April 30 of the year following the expired tax period.

  2. Persons that are obliged to submit the tax declaration shall have the right to submit this declaration to a fiscal
agency at the place of their residence.

    3. If sources of cessation of activity stated in article 227 of this Code, and (or) cessation of payments stated in
article 228 of this Code, taxpayers must submit the tax declaration on actually drawn incomes in the current tax period
before the end of the tax period within 5 days from the date of termination of those activity or payments (the paragraph
is in wording enforced since 1 January 2001 by the Federal law N 166-FZ from 29 December 2000);

   If a foreign natural person terminates his within a calendar year activities, with respect to which incomes drawn
thereon are subject to taxation in accordance with articles 227 and 228 of this Code, and leaves the territory of the
Russian Federation, the tax declaration on incomes actually drawn for the period of his stay in the current tax period
on the territory of the Russian Federation must be submitted not later than one month before his leaving the territory
of the Russian Federation.
   Payment of the tax additionally charged according to tax declarations for which the procedure of submission is
established by this clause, shall be made not later than 15 days from the date of submission of the declaration.

   4. In tax declarations persons state all incomes drawn in the tax period, sources of payment thereof, tax
deductions, sums of the tax deducted by fiscal agencies, sums of advance payments, sum of tax, to be paid (extra
paid) or to be returned in according to results of tax period, actually paid during the tax period (the clause has been
added since 1 January 2001 by the Federal law N 166-FZ from 29 December 2000).




                Article 230. Providing of observance of statements of this chapter
   1. Fiscal agents shall keep records of incomes drawn from them by natural persons in a tax period according to the
form established by the RF Ministry for finance (the clause is in the wording enforced since 2 August 2004 by the
Federal act N 58-FZ on 29 June 2004, - see the previous wording).

   2. Fiscal agents shall annually submit to a fiscal agency at the place of their registration information on incomes of
persons of this tax period and sums charged and deducted in this tax period not later than 1 April of the year following
the expired tax period, according to the form approved by federal executive body authorized for control and
supervision in area of taxes and duties (paragraph is in the wording enforced since 2 August 2004 by the Federal act
N 58-FZ on 29 June 2004; is in the wording enforced since 4 September 2004 by the Federal act N 95-FZ on 29 July
2004, - see the previous wording).

   These data shall be submitted on magnetic carriers or using means of telecommunication, in accordance with the
procedure established by the RF Ministry for finance (paragraph is in the wording enforced since 2 August 2004 by
the Federal act N 58-FZ on 29 June 2004, - see the previous wording).

   Fiscal agencies shall direct these data to fiscal agencies at the place of residence of natural persons (the clause is
in wording enforced since 1 January 2001 by the Federal law N 166-FZ from 29 December 2000).

    Information on incomes paid to sole proprietors for goods, products acquired from them or works performed
(rendered services) shall not be submitted, if these sole proprietors have submitted to a fiscal agent documents
confirming their state registration as entrepreneurs without creation of a legal entity and registration in tax authorities.
If the number of these persons who drew incomes in the tax period is not higher than 10 people, agents may submit
this information on paper carriers. (the paragraph has been added since 1 January 2001 by the Federal law N 166-FZ
from 29 December 2000);

   In exclusive cases, taking into account specific character of activities or place pf location of organizations, fiscal
agencies may provide to certain organizations the right to submit data on incomes of natural persons on paper
carriers.

  3. Fiscal agents shall give out for natural persons references, upon application thereof, on incomes actually drawn
by the persons, as well as deducted sums of the tax, according to the form approved by federal executive body
authorized for control and supervision in area of taxes and duties (the clause is in the wording enforced since 2
August 2004 by the Federal act N 58-FZ on 29 June 2004; is in the wording enforced since 4 September 2004 by the
Federal act N 95-FZ on 29 July 2004, - see the previous wording).



                      Article 231. Procedure for deduction and return of the tax
                        (the name of the article is in wording enforced since 1 January 2001 by
                                 the Federal law N 166-FZ from 29 December 2000)

   1. Sums of the tax deducted by a fiscal agent in surplus from the income of a taxpayer shall be subject to return by
the fiscal agent upon submission by the taxpayer of the respective application.

   2. Sums of the tax that were not deducted from persons or not deducted by a fiscal agent in full volume shall be
levied by them from persons until the indebtedness of these persons under the tax is fully repaid, in accordance with
the procedure provided by article 45 of this Code.
  3. Sums of the tax that were not levied as a result of taxpayer’s evasion of taxation shall be levied for the whole
period of evasion from payment of the tax.




                                 Article 232. Elimination of double taxation
   1. Sums of the tax on incomes drawn outside the Russian Federation, actually paid by the taxpayer being a tax
resident of the Russian Federation shall be not set off in payment of the tax in the Russian Federation, if other is not
provided by a certain contract (agreement) on avoiding of double taxation. (the clause is in wording enforced since 1
January 2001 by the Federal law N 166-FZ from 29 December 2000);

   2. For exemption from payment of tax, making of setoff, obtaining tax deductions or other tax privileges a taxpayer
must submit to tax bodies an official confirmation of the fact that he is a resident of the state with which the Russian
Federation has made a contract (agreement) on evasion of double taxation, as a document on incomes and payments
of tax made by him outside the Russian Federation, which is effective during a certain tax period. Confirmation may
be submitted both before payment of the tax or advance payments on the tax and within one year after expiration of
the tax period, as a result of which the taxpayer claims for exemption from payment of tax, making of setoff, tax
deductions or privileges (the clause is in wording enforced since 1 January 2001 by the Federal law N 166-FZ from 29
December 2000; is in the wording enforced since 2 August 2004 by the Federal act N 58-FZ on 29 June 2004, - see
the previous wording).




                                         Article 233. Final provisions
   Tax privileges provided by legislative (representative) authorities of components of the Russian Federation in the
part of the sums of tax placed in accordance with the legislation of the Russian Federation into their budgets, before
coming into effect of this Code, shall be effective during the period for which these privileges were granted. If no
period of time during which the privileges may apply was determined in establishing the tax privileges, these privileges
shall cease their effect according to the decision of legislative (representative) authorities of the Russian Federation.
(the article has been added since 1 January 2001 by the Federal law N 166-FZ from 29 December 2000);




                                       Chapter 24. Uniform Social Tax
                                 (the title is in the wording enforced from 1 January 2002
                     by the Federal act No 198-FZ of 31 December 2001, - see the previous wording)




                                        Article 234. General provisions
                                      (the article lost force since 1 January 2005 -
                                         Federal act N 70-FZ on 20 July 2004. -
                                                See the previous wording)




                                             Article 235. Taxpayers
  1. Payers of the tax (hereinafter in this chapter referred to as taxpayers) shall be:

  1) persons making payments to natural persons:

  - organizations;

  - sole traders;
  - natural persons not considered to be sole traders;

  2) sole traders, lawyers.

   For purposes of this chapter, members of the peasant (farmer) holding shall be equaled to sole traders (the
paragraph has been added from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to
relations arising from 1 January 2002).

   2. If the taxpayer refers at the same time to several categories of taxpayers specified in subclauses 1 and 2 of
clause 1 of this article, they calculate and pay the tax on each ground.
   (The article is in the wording enforced from 1 January 2002 by the Federal act No 198-FZ of 31 December 2001, -
see the previous wording).



                                         Article 236. Object of taxation
  1. The object of taxation for taxpayers specified in paragraphs two and three of subclause 1 of clause 1 of article
235 of this Code shall involve payments and other remuneration charged by taxpayers in favour of natural persons
under labour and civil-labour contracts whose subject is performance of works, rendering of services (except
remuneration paid to sole traders), as well as under author’s contracts.

   For taxpayers specified in paragraph four of subclause 1 of clause 1 of article 235 of this Code, the object of
taxation shall involve payments and other remuneration under labour and civil-labour contracts, contracts whose
subject is performance of works, rendering of services, paid by taxpayers in favour of natural persons.

   Payments made within civil-labour contracts whose subject is transfer of the right of ownership or other property
rights, as well as contracts connected with transfer of property (property rights) for use shall not refer to the object of
taxation.

   2. For taxpayers specified in subclause 2 of clause 1 of article 235 of this Code, the object of taxation shall involve
incomes from entrepreneurial or other professional activity less expenses connected with gain thereof.

   The paragraph is excluded from 1 January 2003 by the Federal act No 191-FZ of 31 December 2002. - See the
previous wording.

  For taxpayers - members of the peasant (farmer) holding (including the head of the peasant (farmer) holding)
expenses connected with development of the peasant (farmer) holding actually made by this holding shall be
excluded from the income (the paragraph has been added from 1 July 2002 by the Federal act No 57-FZ of 29 May
2002; the effect shall apply to relations arising from 1 January 2002).

  3. Payments and remuneration specified in clause 1 of this article (regardless of the form they are made) shall not
be the object of taxation, if:

   Taxpayers - organizations do not refer these payments to expenses reducing the taxable base for the tax on profit
of organizations in the current accounting (tax) period;

   These payments made by taxpayers - sole traders or natural persons do not reduce the taxable base for the tax on
incomes of natural persons in the current accounting (tax) period.
   (The article is in the wording enforced from 1 January 2002 by the Federal act No 198-FZ of 31 December 2001, -
see the previous wording).



                                            Article 237. Taxable base
   1. The taxable base of taxpayers specified in paragraph two and three of subclause 1 of clause 1 of article 235 of
this Code shall be determined as the sum of payments and other remuneration provided by clause 1 of article 236 of
this Code charged by taxpayers for the accounting period in favour of natural persons.

   Any payments and remuneration (except the sums specified in article 238 of this Code) regardless of the form they
are made, in particular, full or partial payment of goods (works, services, property and other rights) intended for the
natural person - labourer, including public utilities, catering, rest, education in his interests, payment of insurance fees
under voluntary insurance contracts (except sums of insurance fees specified in subclause 7 of clause 1 of article 238
of this Code) shall be taken into account in determining the taxable base (paragraph is in the wording enforced since 1
January 2005 by the Federal act N 70-FZ on 20 July 2004, - see the previous wording).

  Taxable base of taxpayers specified in paragraph four of subclause 1 of clause 1 of article 235 of this Code shall
be determined as the sum of payments and remuneration provided by clause 2 of article 236 of this Code for the tax
period in favour of natural persons.

  2. Taxpayers specified in subclause 1 of clause 1 of article 235 of this Code shall determine the taxable base
separately for each natural person, cumulative from the beginning of the tax period upon expiration of each month.

   3. Taxable base of taxpayers specified in subclause 2 of clause 1 of article 235 of this Code shall be determined as
the sum of incomes gained by these taxpayers for the tax period both in pecuniary form and in kind from
entrepreneurial and other professional activity, less expenses connected with gaining thereof. The composition of the
expenses to be deducted for purposes of taxation by this group of taxpayers shall be determined according to the
procedure similar to the procedure for determining the composition of costs established for payers of the profit tax by
certain articles of chapter 25 of this Code.

   The paragraph has been excluded from 1 January 2003 by the Federal act No 191-FZ of 31 December 2002. - See
the previous wording.

   4. In the case of calculation of the taxable base, payments and other remuneration in kind in the form of goods
(works, services) shall be taken into account as the cost of these goods (works, services) on the date of payment
thereof, paid on the basis of their market prices (tariffs), and in the case of state regulation of prices (tariffs) for these
goods (works, services) - on the basis of the state regulated retail prices.

  The cost of these goods (works, services) shall include certain amount of the value-added tax, for goods liable to
excise duty - certain amount of excise duties.

  5. The sum of remuneration taken into account when determining the taxable base concerning the author’s contract
shall be determined according to article 210 of this Code with the account of expenses provided by clause 3 of part
one of article 221 of this Code.
  (The article is in the wording enforced from 1 January 2002 by the Federal act No 198-FZ of 31 December 2001, -
see the previous wording)




                           Article 238. Sums which are not subject to taxation
  1. The following sums shall not be subject to taxation (the paragraph is in the wording enforced from 1 January
2001 by the Federal act No 166-FZ of 29 December 2000):

   1) state allowances paid according to the RF legislation, legislative acts of components of the Russian Federation,
decisions of representative authorities of local self-management, including temporary disability allowances,
allowances for taking care of a sick child, allowances for unemployment, maternity allowances;

   2) all types of compensation payments established by the RF legislation, legal acts of components of the Russian
Federation, decisions of representative authorities of local self-management (within the norms established according
to the RF legislation), connected with:

   compensation for the damage inflicted by an injury or another health damage;

   provision of free dwelling premises and public utilities, catering and foods, fuel or certain pecuniary compensation
(the paragraph has been added to from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000; added to
from 1 January 2002 by the Federal act No 198-FZ of 31 December 2001, - see the previous wording);

   payment of the cost and (or) giving out the due allowance in kind, as well as payment of pecuniary funds instead of
this allowance;
  payment of the cost of catering, sport facilities, equipment, sport and ceremonial uniform obtained by sportsmen
and workers of physical culture organizations for education and training process and participation in sport
competitions;

  dismissal of labourers including compensations for unused leave;

  compensation for other expenses including expenses for improvement of the professional level of labourers;

  employment of labourers made redundant or as a result of reorganization or liquidation of the organization;

  performance by the natural person of their labour duties (including movement to work to other areas and
compensation for travel expenses) (the paragraph is in the wording enforced from 1 January 2002 by the Federal act
No 198-FZ of 31 December 2001, - see the previous wording).

    When the taxpayer pays for travel expenses of labourers both inside and outside the country, the daily allowance
shall not be taxed within the norms established according to the RF legislation, nor actually made target travel
expenses to the place of destination and back, fees for airport services, commission fees, travel to the airport or
railway station in places of departure, destination or change, luggage expenses, rent of dwelling premises, payment
for communication services, fees for issuance (receipt) and registration of the official foreign passport, fees for
issuance (receipt) of visas, expenses for exchange of cash currency or check in a bank for cash foreign currency, if
they are confirmed by documents. If documents confirming payment of expenses for rent of dwelling premises are not
submitted, the sums of this payment should be exempted from taxation within the norms established in accordance
with the RF legislation. Similar taxation procedure shall be applied to payments made for natural persons staying
under powerful or administrative subordination of an organization, as well as for members of the board of directors,
board or another similar body of this company (the paragraph is in the wording enforced from 1 January 2001 by the
Federal act No 166-FZ of 29 December 2000; in the wording enforced from 1 January 2002 by the Federal act No
198-FZ of 31 December 2001, - see the previous wording);

  3) lump sums of material aid rendered by the taxpayer:

   to natural persons in connection with natural disasters or other emergency situations in order to compensation for
the material damage or health damage inflicted thereon, as well as to natural persons who suffered from terrorist acts
on the territory of the Russian Federation;

  members of the family of a diseased labourer, or labourer in connection with death of a member (members) of their
family;
  (the subclause is in the wording enforced from 1 January 2002 by the Federal act No 198-FZ of 31 December
2001, - see the previous wording)

  4) the subclause has been excluded from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000;

  5) the subclause has been excluded from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000;
  ____________________________________________________________________
  Subclause 6 of the previous wording shall be subclause 4 of this wording from 1 January 2001 - Federal act No
166-FZ of 29 December 2000.
  ___________________________________________________________________

   4) sums of remuneration of labour in foreign currency paid to their labourers, as well as military men sent to work
(service), by taxpayers - financed from the federal budget by state institutions or organizations - within the sizes
established by the RF legislation;
   ____________________________________________________________________
   Subclause 7 of the previous wording shall be subclause 5 of this wording from 1 January 2001 - Federal act No
166-FZ of 29 December 2000.
   ___________________________________________________________________

  5) incomes of members of the peasant (farmer) holding gained in this holding from production and sale of
agricultural products, as well as from production of agricultural products, their processing and sale - within five years
beginning from the registration of this holding.

   This norm shall be applied referring to incomes of the members of peasant (farmer) holdings which have not used
this norm (the paragraph is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29
December 2000);
  ___________________________________________________________________
  Subclause 8 of the previous wording shall be subclause 6 of this wording from 1 January 2001 - Federal act No
166-FZ of 29 December 2000.
  ____________________________________________________________________

   6) incomes (except remuneration of labour of hired labourers) gained by members of tribal and family communities
of the peoples of the North registered according to the established procedure, from selling products obtained as a
result of traditional crafts carried out by them (the paragraph is in the wording enforced from 1 January 2001 by the
Federal act No 166-FZ of 29 December 2000);
   ____________________________________________________________________
   Subclause 9 of the previous wording shall be subclause 7 of this wording from 1 January 2001 - Federal act No
166-FZ of 29 December 2000.
   ____________________________________________________________________

   7) sums of insurance payments (fees) of obligatory insurance of labourers carried out by the taxpayer according to
the procedure established by the RF legislation, sums of payments (fees) of the taxpayer under contracts of voluntary
personal insurance of labourers made for not less than one year, providing payment by the insurers of medical
expenses of these insured persons; sums of payments (fees) of the taxpayer under contracts of voluntary personal
insurance of labourers made exceptionally for the cases of death of the insured person or loss by the latter of labour
capacity as a result of performance by them of labour duties (the subclause is in the wording enforced from 1 January
2002 by the Federal act No 198-FZ of 31 December 2001, - see the previous wording);
   ____________________________________________________________________
   Subclauses 10-14 of the previous wording shall be subclauses 8-12 of this wording from 1 January 2001 - Federal
act No 166-FZ of 29 December 2000.
   ___________________________________________________________________

  8) subclause lost its force since 1 January 2005 - Federal act N 70-FZ on 20 July 2004.

   9) cost of travel of labourers and members of their families to the place of their leave and back, paid by the
taxpayer to persons working and living in regions of the Far North and areas equaled thereto, in accordance with
current legislation, labor agreements (contracts) and (or) collective agreements (the subclause is in the wording
enforced from 1 January 2002 by the Federal act No 198-FZ of 31 December 2001; is in the wording enforced since 1
January 2005 by the Federal act N 122-FZ on 22 August 2004, - see the previous wording);

   10) sums paid to natural persons by election commissions, referendum commissions as well as from funds of
electoral funds of candidates, registered candidates for the position of the President of the Russian Federation,
candidates, registered candidates for election of the legislative (representative) state authority of the component of the
Russian Federation, candidates, registered candidates for election in another federal state authority, state authority of
the component of the Russian Federation provided by the Constitution of the Russian Federation, constitution, charter
of the component of the Russian Federation and elected directly by citizens, registered candidates for election of the
representative authority of the municipal formation, registered candidates for the position of head of the municipal
formation, for other positions provided by the charter of the municipal formation and filled by means of direct elections,
electoral funds of electoral associations, electoral funds of regional departments of political units which are not being
electoral associations from referendum funds of initiative group for holding a referendum of the Russian Federation,
referendum of the component of the Russian Federation, local referendum, initiative propaganda group of referendum
of the Russian Federation, other groups of referendum participants of the component of the Russian Federation, local
referendum for performance by these persons of work directly connected with carrying out electoral campaigns,
referendum campaigns (the subclause is in the wording enforced from 1 January 2006 by the Federal act N 93-FZ of
21 July 2005, - see the previous wording);

   11) cost of the uniform given to workers, students, pupils in accordance with the RF legislation, as well as state
employees of state authorities free of charge or with partly payment, staying in permanent personal use (the
subclause is in the wording enforced from 1 January 2002 by the Federal act No 198-FZ of 31 December 2001, - see
the previous wording);

  12) cost of privileges on travel expenses provided by the RF legislation to certain categories of labourers, students,
pupils;

  15) the subclause has been excluded from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000;
  ____________________________________________________________________
  Subclause 16 of the previous wording shall be subclause 13 of this wording from 1 January 2001 - Federal act No
166-FZ of 29 December 2000.
  ____________________________________________________________________

  13) the subclause lost its force since 1 January 2005 - Federal act N 70-FZ on 20 July 2004.

  14) the subclause lost its force since 1 January 2005 - Federal act N 70-FZ on 20 July 2004.

  15) amounts of welfare, being paid by budgetary institutions to individuals for the account of budgetary sources, not
exceeding 3000 Roubles per one individual for the taxation period (the subclause has been added since 1 January
2005 - by the Federal act N 70-FZ on 20 July 2004).

  2. The subclause lost its force since 1 January 2005 - Federal act N 70-FZ on 20 July 2004.

   3. The taxable base (in the part of the sum o the tax to be paid to the RF Social Insurance Fund), besides
payments specified in clauses 1 and 2 of this article shall not include any remuneration paid to natural persons under
civil-legal contracts, author’s contracts (the clause is in the wording enforced from 1 January 2001 by the Federal act
No 166-FZ of 29 December 2000; in the wording enforced from 1 January 2002 by the Federal act No 198-FZ of 31
December 2001; in the wording enforced from 1 January 2005 by the Federal act N 70-FZ on 20 July 2004, - see the
previous wording).




                                            Article 239. Tax privileges
  1. The following entities shall be exempted from the tax:

   1) organizations of any legal forms of organization - on sums of payments and other remuneration, which do not
exceed 100000 rubles per each disabled natural person of I, II or III group during the tax period (the paragraph is in
the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000; is in the wording
enforced from 1 January 2005 by the Federal act No 70-FZ of 20 July 2004, - see the previous wording);

   2) the following categories of taxpayers - on sums of payments and other remuneration, which do not exceed
100000 rubles per each
   natural person during the tax period (the clause is in the wording enforced from 1 January 2001 by the Federal act
No 166-FZ of 29 December 2000; in the wording enforced from 1 January 2002 by the Federal act No 198-FZ of 31
December 2001; is in the wording enforced from 1 January 2005 by the Federal act No 70-FZ of 20 July 2004, - see
the previous wording):

   public organizations of the disabled (including those created as unions of public organizations of the disabled),
where the disabled and their legal representatives make not less than 80% of members thereof (the paragraph is in
the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000);

   organizations whose authorized capital fully consists of deposits of public organizations of the disabled and where
the list average number of the disabled in less than 50%, the share of the wage of the disabled in the remuneration
fund being not less than 25% (the paragraph is in the wording enforced from 1 January 2001 by the Federal act No
166-FZ of 29 December 2000);

   institutions created for reaching educational, cultural, medical- health improving, physical culture and sport,
scientific, informational and other social goals, as well as for rendering legal and other aid to the disabled, disabled
children and their parents whose only owners of property thereof are the above mentioned public organizations of the
disabled.

   Privileges specified in this subclause shall not apply to taxpayers involved in productions and (or) sale of goods,
mineral raw materials, other natural resources liable to excise duty, as well as other goods in accordance with the list
approved by the RF Government upon presentation of All-Russian public organizations of the disabled (the paragraph
is in the wording enforced from 1 January 2002 by the Federal act No 198-FZ of 31 December 2001, - see the
previous wording);

  3) taxpayers specified in subclause 2 of clause 1 of article 235 of this Code being disabled of I, II or III group, in the
part of incomes from their entrepreneurial and other professional activity at the amount not exceeding 100000 rubles
during the tax period (the subclause is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of
29 December 2000);
  4) the subclause is excluded from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000.

   4) The subclause was added from 1 January 2002 by the Federal act No 198-FZ of 31 December 2001, lost force
since 1 January 2005 by the Federal act No 70-FZ of 20 July 2004, - see the previous wording.

   2. The clause has lost its force from 1 January 2003 - Federal act No 198-FZ of 31 December 2001, - see the
previous wording.



                                 Article 240. Tax and accounting periods
                               (the title is in the wording enforced from 1 January 2001
                                 by the Federal act No 166-FZ of 29 December 2000)

  It is calendar year, which is considered to be the tax period.

   Accounting periods for the tax shall be the first quarter, half-year and none months of the calendar year (the part
has been added from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000; in the wording enforced
from 1 January 2002 by the Federal act No 198-FZ of 31 December 2001, - see the previous wording).




                                                Article 241. Tax rates
    1. For the taxpayers, specified in Subclause 1 of Clause 1 of Article 235 of this Code, except for those acting as
employers of the taxpayers-organizations and sole traders having the resident status of the technique-introduced
specific economic zone and making payments to natural persons, working within the territory of the technique-
introduced specific economic zone, producers of agricultural goods, folk craft and family organizations, communities of
indigenous people in Far North Area involved with traditional branches of economy, the following tax rates shall apply:

 Assessment basis       Federal budget      Social insurance       Funds of     obligatory   medical   Total
 per each the natural                       Fund     of  the       insurance
 person           by                        Russian
 progressive    total                       Federation
 since the beginning
 of the year
                                                                      Federal           Territorial
                                                                   fund         of   funds of
                                                                   obligatory           Obligatory
                                                                   medical           medical
                                                                   insurance         insurance
         1                      2                       3                 4                  5               6
   Up to 280,000           20.0 %                2.9%                 1.1 %             2.0%             26.0%
 Roubles
   From     280,001        56,000                8,120 Roubles        3,080             5,600             72,800
 Roubles to 600,000     Roubles +           +                      Roubles +         Roubles +         Roubles +
 Roubles                   7.9 per cent        1.0 per cent of        0.6 per cent      0.5 per cent      10.0 per cent
                        of the amount in    the amount in          of the amount     of the amount     of the amount in
                        excess        of    excess of 280,000      in excess of      in excess of      excess        of
                        280,000             Roubles                280,000           280,000           280,000
                        Roubles                                    Roubles           Roubles           Roubles
   Above     600,000       81,280             11,320                  5,000             7,200             104,800
 Roubles                Roubles +           Roubles                Roubles           Roubles           Roubles + 2.0
                           2.0 per cent                                                                per cent of the
                        of the amount in                                                               amount        in
                        excess 600,000                                                                 excess        of
                        Roubles                                                                        600,000
                                                                                                       Roubles.


  For the taxpayers-producers of agricultural goods, folk craft organizations, families and communities of indigenous
people of Far North Area involved with traditional branches of economy, the following tax rates shall apply:
 Assessment basis       Federal budget      Social insurance       Funds of         obligatory   medical   Total
 per each the natural                       Fund     of  the       insurance
 person           by                        Russian
 progressive    total                       Federation
 since the beginning
 of the year
                                                                      Federal               Territorial
                                                                   fund             of   funds of
                                                                   obligatory               Obligatory
                                                                   medical               medical
                                                                   insurance             insurance
   1                      2                     3                     4                     5                6
   Up to 280,000          15.8 %                1.9%                  1.1 %                 1.2%             20.0%
 Roubles
   From     280,001        44,240               5,320 Roubles         3,080                 3,360             56,000
 Roubles to 600,000     Roubles +           +                      Roubles +             Roubles +         Roubles +
 Roubles                   7.9 per cent        0.9 per cent of        0.6 per cent          0.6 per cent      10.0 per cent
                        of the amount in    the amount in          of the amount         of the amount     of the amount in
                        excess        of    excess of 280,000      in excess of          in excess of      excess        of
                        280,000             Roubles                280,000               280,000           280,000
                        Roubles                                    Roubles               Roubles           Roubles
   Above     600,000       69,520               8,200 Roubles         5000                  5,280             88,000
 Roubles                Roubles +                                  Roubles               Roubles           Roubles + 2.0
                           2.0 per cent                                                                    per cent of the
                        of the amount in                                                                   amount        in
                        excess 600,000                                                                     excess        of
                        Roubles                                                                            600,000
                                                                                                           Roubles.

    For the taxpayers-taxpayers-organizations and sole traders having the resident status of the technique-introduced
specific economic zone and making payments to natural persons, working within the territory of the technique-
introduced specific economic zone, the following tax rates shall apply:

 Assessment basis per each the             Federal budget                                Total
 natural person by progressive total
 since the beginning of the year
 Up to 280,000 Roubles                        14.0 %                                  14.0%
 From 280,001 Roubles to 600,000              39,200 Roubles +                          39,200 Roubles +
 Roubles                                         5.6 per cent of the amount in          5.6 per cent of the amount in
                                              excess of 280,000 Roubles               excess of 280,000 Roubles
    Above 600,000 Roubles                        57,120 Roubles +                       57,120 Roubles + 2.0 per cent of
                                                 2.0 per cent of the amount in the amount in excess of 600,000
                                              excess 600,000 Roubles                  Roubles.
(The clause is in the wording enforced since 9 January 2006 by the Federal act N 158-FZ of 6 December 2005, the
effect shall apply to legal relations arising from 1 January 2006. - See the previous wording).

  2. The clause lost force since 1 January 2005 by the Federal act N 70-FZ on 20 July 2004. - See the previous
wording.

   3. For taxpayers specified in Subclause 2, Clause 2, Article 235 of this Code, the following tax rates shall apply,
unless otherwise stipulated by Clause 4 of this Article:

  Assessment basis       Federal budget         Funds of obligatory medical                  Total
 per each the natural                                   insurance
      person by
   progressive total
 since the beginning
      of the year
                                             Federal fund of    Territorial funds
                                               obligatory               of
                                                medical           Obligatory
                                                insurance          medical
                                                                  insurance
         1                      2                   3                 4                  5
   Up to 280,000           7.3 %                0.8 %             1.9%               10.0%
 Roubles
   From     280,001        20,440               2,240             5,320               28,000
 Roubles to 600,000     Roubles +            Roubles +         Roubles +           Roubles +
 Roubles                   2.7 per cent of      0.5 per cent      0.4 per cent        3.6 per cent of
                        the amount in        of the amount     of the amount       the amount in
                        excess          of   in excess of      in excess of        excess          of
                        280,000 Roubles      280,000           280,000             280,000 Roubles
                                             Roubles           Roubles
   Above     600,000       29,080               3,840             6,600         39,520
 Roubles                Roubles +            Roubles           Roubles        Roubles + 2.0
                           2.0 per cent of                                    per cent of the
                        the amount in                                         amount        in
                        excess 600,000                                        excess        of
                        Roubles                                               600,000
                                                                              Roubles.
(The clause is in the wording enforced since 1 January 2005 by the Federal act N 70-FZ on 20 July 2004, - see the
previous wording)

  4. Lawyers shall pay the tax at the following tax rates:

  Assessment basis       Federal budget         Funds of obligatory medical             Total
 per each the natural                                   insurance
      person by
   progressive total
 since the beginning
      of the year
                                             Federal fund of   Territorial funds
                                               obligatory             of
                                                medical          Obligatory
                                               insurance           medical
                                                                 insurance
         1                      2                  3                   4                 5
   Up to 280,000           5.3 %               0.8 %             1.9%                8.0%
 Roubles
   From     280,001        14,840               2,240             5,320         22,400
 Roubles to 600,000     Roubles +            Roubles +         Roubles +     Roubles +
 Roubles                   2.7 per cent         0.5 per cent      0.4 per cent  3.6 per cent
                        of the amount in     of the amount     of the amount of the amount in
                        excess        of     in excess of      in excess of  excess        of
                        280,000              280,000           280,000       280,000
                        Roubles              Roubles           Roubles       Roubles
    Above 600,000          23,480               3,840             6,600         33,920
 Roubles                Roubles +            Roubles           Roubles       Roubles + 2.0
                           2.0 per cent                                      per cent of the
                        of the amount in                                     amount        in
                        excess 600,000                                       excess        of
                        Roubles                                              600,000
                                                                             Roubles”;
(The clause is in the wording enforced since 1 January 2005 by the Federal act N 70-FZ on 20 July 2004, - see the
previous wording)

   5. The clause has been excluded from 1 January 2002 by the Federal act No 198-FZ of 31 December 2001. - See
the previous wording.



                Article 242. Determining the date of making payments and other
                                Remuneration (gaining incomes)
                               (the title is in the wording enforced from 1 January 2001
                                 by the Federal act No 166-FZ of 29 December 2000)

  The date of making payments and other remuneration or gaining incomes shall be determined as follows (the
paragraph is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000):

   Date of calculation of payments and other remuneration in favour of the labourer (natural person in whose favour
payments are made) - for payments and other remuneration charged by the taxpayers specified in subclause 1 of
clause 1 of article 235 of this Code (the paragraph is in the wording enforced from 1 January 2001 by the Federal act
No 166-FZ of 29 December 2000);

  Date of payment of the remuneration to the natural person in whose favour payments are made - for the taxpayers
specified in paragraph four of subclause 1 of clause 1 of article 235 of this Code (the paragraph is in the wording
enforced from 1 January 2002 by the Federal act No 198-FZ of 31 December 2001).

   Date of actual receipt of the corresponding income - for incomes from entrepreneurial or other professional activity
(the paragraph is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000,
as well as other incomes connected with this activity).

   The paragraph has been excluded from 1 January 2002 by the Federal act N 198-FZ of 31 December 2001. - See
the previous wording.


                   Article 243. Procedure for calculation, procedure and dates of
                   Payment of the tax by the taxpayers paying to natural person
                              (The title is in the wording enforced since 1 January 2005
                       by the Federal act N 70-FZ on 20 July 2004, - see the previous wording)

  1. The sum of the tax shall be calculated and paid by taxpayers separately to the federal budget and every fund
and shall be determined as a certain interest share of the taxable base.

   2. The sum of the tax to be paid to the RF Social Insurance Fund shall be decreased by the taxpayers by the sum
of expenses made by them independently for purposes of state social insurance, provided by the RF Legislation.

   The sum of the tax (advance payment of the tax) to be paid to the federal budget shall be reduced by taxpayers by
the sum of insurance fees (advance payments of the insurance fee) paid by them for obligatory pension insurance (tax
deduction) within the sums calculated on the basis of the insurance tariffs provided by the Federal act No 167-FZ “ON
obligatory pension insurance in the Russian Federation” of 15 December 2001. The sum of the tax deduction may not
exceed the sum of the tax (sum of the advance payment of the tax) to be paid to the federal budget, charged for the
same period.

   3. During the accounting period according to the results of each calendar year, taxpayers shall calculate monthly
prepayments of the tax on the basis of the size of payments and other remuneration calculated (made for the
taxpayers - natural persons) from the beginning of the tax period until the end of this calendar month, and the tax rate.
The sum of the monthly prepayment of the tax to be paid for the accounting period shall be determined with the
account of early paid sums of monthly prepayments.

  Monthly prepayments shall be made not later than the 15-th day of the following month.

   According to the results of the accounting period taxpayers shall calculate the difference between the sum of the
tax calculated on the basis of the taxable base cumulative from the beginning of the tax period until the end of the
respective tax period, and the sum of monthly prepayments made for the same period to be paid within the term
established for submission of the settlement of the tax.

   If in the accounting (tax) period the sum of the applied tax deduction exceeds the sum of insurance payment
actually made for the same period, this difference shall be considered an underestimation of the sum of the tax to be
paid from the 15-th day of the month following the month when the prepayments of the tax were made (the paragraph
is in the wording enforced from 1 February 2003 by the Federal act No 196-FZ of 31 December 2002, - see the
previous wording).

  The taxpayer shall show the data on the sums of calculated and made prepayments, the data on the sum of the tax
deduction which the taxpayer has used, as well as on the sums of actually paid insurance fees for the same period in
the settlement to be submitted not later than the 20-th of the month following the accounting period to the fiscal
agency according to the form approved by the RF Ministry for finance (the paragraph is in the wording enforced since
2 August 2004 by the Federal act N 58-FZ on 29 June 2004, - see the previous wording).

   The difference between the sum of the tax to be paid according to the results of the tax period and sums of the tax
paid during the tax period shall be paid within 15 days following the date established for submitting the tax declaration
for the tax period, or offset for the account of future payments of the tax, or returned to the taxpayer according to the
procedure provided by article 78 of this Code. If according to the results of the tax period the sum of insurance
payments for obligatory pension insurance (prepayments of insurance fees for obligatory pension insurance) actually
made for this period exceeds the sum of the applied tax deduction for the tax, the sum of this excess shall be
considered to be paid in surplus and shall be returned to the taxpayer according to the procedure provided by article
78 of this Code.

   4. Taxpayers must keep record of the sums of charged payments and other remuneration, sums of the tax referring
thereto, as well as sums of tax deductions for each natural person in whose favour the payments have been made.

   5. Quarterly, not later than the 15-th of the month following the expired quarter taxpayers must submit information
(reports) on the following sums to regional RF Social Insurance Funds according to the form approved by the RF
Social Insurance Fund:

  1) calculated tax to the RF Social Insurance Fund;

   2) those used for payment of allowances for temporary disability, maternity, taking care of a child under a year and
a half, child birth, compensation of the cost of guaranteed list of services and social allowance for burial, other types of
allowances within the state social insurance;

   3) those sent by them to sanatorium and resort service to labourers and their children according to the established
procedure;

  4) expenses to be setoff;

  5) those paid to the RF Social Insurance Fund.

   6. Payment of the tax (prepayment of the tax) shall be provided by separate payment orders to the federal budget,
RF Social Insurance Fund, Federal Fund of Obligatory medical Insurance and territorial funds of obligatory medical
insurance.

   7. Taxpayers shall submit the tax declaration according to the form approved by the RF Ministry for finance not
later than 30 March of the year following the expired tax period. A copy of the tax declaration with a note of the fiscal
agency or another document confirming the submission of the declaration to the fiscal agency shall be submitted by
the taxpayer to the territorial agency of the RF Pension Fund not later than 1 July of the year following the expired tax
period (paragraph is in the wording enforced since 2 August 2004 by the Federal act N 58-FZ on 29 June 2004; is in
the wording enforced since 1 January 2005 by the Federal act N 70-FZ on 20 July 2004, - see the previous wording).

   Fiscal agencies must submit to agencies of the RF Pension Fund copies of taxpayers’ payment orders on payment
of the tax, as well as other data necessary for performance by agencies of the RF Pension Fund of pension insurance
including data of tax secret. Taxpayers acting as insurants of obligatory pension insurance shall submit to the RF
Pension Fund data and documents in accordance with the Federal act “On obligatory pension insurance in the
Russian Federation” referring to the insured persons.

  Agencies of the RF Pension Fund shall submit to fiscal agencies information on incomes of natural persons from
personal accounts opened for keeping individual (personified records).

   8. Independent subdivisions having separate balance sheet, settlement account and charging payments and other
remuneration in favour of natural persons shall perform duties of the organization on tax payment (prepayments of the
tax), as well as duties on submission of settlements of the tax and tax declaration at the place of their location.

  The sum of the tax (prepayment of the tax) to be paid at the place of location of the independent subdivision shall
be determined on the basis of the size of the taxable base referring to this independent subdivision.
  The sum of the tax to be paid at the place of location of the organization including independent subdivisions shall
be determined as the difference between the total sum of the tax to be paid by the organization on the whole and the
aggregate sum of the tax to paid at the place of location of the independent subdivisions of the organization.

   9. In case individual business is terminated before the end of taxation period, taxpayers are obliged to provide the
tax body with tax return for the period since the beginning of the taxation period up to submission of mentioned
application, inclusively, in five days upon submission to the registering body of an application for termination of
mentioned activity. The difference between tax amount to be paid according to tax return, and the ones paid by the
taxpayers since the beginning of a year, should be paid in 15 days since submission of such tax return at the latest, or
should be returned to a taxpayer in the procedure stipulated by Article 78 of this Code (the paragraph has been added
since 1 January 2005 by the Federal act N 70-FZ on 20 July 2004, - see the previous wording).
   (The article is in the wording enforced from 1 January 2002 by the Federal act No 198-FZ of 31 December 2001, -
see the previous wording)



  Article 244. Procedure of tax calculation and payment by the taxpayers paying neither
                     money nor bonuses in favor of natural persons
                               (the title is in the wording enforced since 1 January 2005
                       by the Federal act N 70-FZ on 20 July 2004, - see the previous wording)

   1. Calculation of sums of prepayments to be paid during the tax period by taxpayers specified in subclause 2 of
clause 1 of article 235 of this Code shall be made by the fiscal agency on the basis of this taxpayers taxable base for
the previous tax period and rates specified in clause 3 of article 241 of this Code, unless otherwise provided by
clauses 2 and 6 of this article (the clause is in the wording enforced from 1 January 2002 by the Federal act No 198-
FZ of 31 December 2001, - see the previous wording).

  The paragraph has been excluded from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall
apply to relations arising from 1 January 2002. - See the previous wording.

  The paragraph has been excluded from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall
apply to relations arising from 1 January 2002. - See the previous wording.

   2. If taxpayers start performing entrepreneurial or other professional activity after the beginning of the next tax
period, they must submit to the fiscal agency at the place of registration a application, according to form approved by
Russian Federation Ministry of Finances, specifying the sums of assumed income for the currency tax period, within
five days upon expiration of the month following the date of beginning the activity. The sum of the assumed income
(sum of the assumed expenses connected with drawing incomes) shall be determined by the taxpayer independently
(the paragraph has been added to from 1 January 2002 by the Federal act No 198-FZ of 31 December 2001; is in the
wording enforced since 1 January 2005 by the Federal act N 70-FZ on 20 July 2004, - see the previous wording).

   Sums of advance payments for the current tax period shall be calculated by the fiscal agency on the basis of the
sum of assumed income with the account of expenses connected with gain thereof, and rates specified in clause 3 of
article 241 of this Code.

   3. In the case of considerable (more than by 50%) increase of income in the tax period, the taxpayer must (and in
the case of a considerable reduction of income shall have the right) to submit a new declaration, specifying the sums
of the assumed income for the current tax period. In this case the tax agency shall make recalculation of prepayments
of the tax for the current tax period ahead of the time, within five days following the submission of the new declaration.
The difference obtained as a result of this recalculation shall be paid within term established for the next prepayment
or setoff for the account of future payments.

  4. Advance payments shall be paid by the taxpayer on the basis of tax notifications:

  1) for January-June - not later than 15 July of the current year at the amount of the half annual sum of advance
payments;

   2) for July-September - not later than 15 October of the current year at the amount of one quarter of the sum of
prepayments;

   3) for October-December - not later than 15 January of the next year at the amount of one quarter of the sum of
prepayments.
   5. Calculation of the tax according to the results of the tax period shall be made by taxpayers specified in
subclause 2 of clause 1 of article 235 of this Code, except for lawyers, independently, on the basis of all the incomes
drawn in the tax period, with the account of expenses connected with drawn thereof, and rates specified in clause 3 of
article 241 of this Code.

   The sum of the tax shall be calculated by the taxpayer separately referring to each fund and shall be determined as
a certain interest share of the taxable base.

   The difference between the sums of prepayments paid for the tax period and the sum of the tax to be paid
according to the tax declaration shall be paid not later than 15 July of the year following the tax period, or setoff for the
account of future payments of the tax, or returned to the taxpayer according to the procedure provided by article 78 of
this Code.

   6. Calculation and payment of the tax on lawyers’ income shall be made by the bars, lawyer’s offices and bureaus
according to the procedure provided by article 243 of this Code, without tax deduction (the clause has been added to
from 1 January 2002 by the Federal act No 198-FZ of 31 December 2001; in the wording enforced from 1 July 2002
by the Federal act No 57-FZ of 29 May 2002; to apply to relations arising from 1 January 2002; in the wording
enforced from 1 February 2003 by the Federal act No 187-FZ of 31 December 2002; is in the wording enforced since
1 January 2005 by the Federal act N 70-FZ on 20 July 2004, - see the previous wording).

   The Bars, Lawyers’ offices, legal advice offices shall provide tax bodies with data on tax amounts calculated from
lawyers’ income for expired taxation period before 30(th) March of the following year according to the format approved
by Russian Federation Ministry of Finances (the paragraph has been added since 1 January 2005 by the Federal act
N 70-FZ on 20 July 2004).

   7. Taxpayers specified in subclause 2 of clause 1 of article 235 of this Code shall submit the tax declaration not
later than the 30-th of April of the year following the expired tax period.

    When submitting the tax declaration, lawyers must submit to the fiscal agency a reference from the bar, lawyer’s
office or consultant bureau on the sums of the tax paid for the them for the expired tax period (the paragraph is in the
wording enforced from 1 February 2003 by the Federal act No 187-FZ of 31 December 2002, - see the previous
wording).

   8. In case individual business is terminated before the end of taxation period, taxpayers are obliged to provide the
tax body with tax return for the period since beginning of the taxation period up to submission of mentioned
application, inclusively, in five days upon submission to the registering body of an application for termination of
mentioned activity.

  For cancellation or suspension of lawyer’s status, taxpayers are obliged to provide a tax body with tax return for the
period since the beginning of taxation period up to the day of cancellation or suspension of lawyer’s status inclusively.

   The tax calculated on the basis of tax return being submitted according to this Clause (with the view of charged
advance payments on expired terms for the current taxation period) shall be paid 15 days upon submission of such
tax return, at the latest.
   (The clause has been added since 1 January 2005 by the Federal act N 70-FZ on 20 July 2004)
   (The article is in the wording enforced from 1 January 2001 by the Federal act No 166-FZ of 29 December 2000)



                     Article 245. Specifics of calculation and payment of the tax
                                  by certain categories of taxpayers
  1. Taxpayers specified in subclause 2 of clause 1 of article 235 of this Code do not calculate, nor pay the tax in the
part of the sum of the tax placed to the RF Social Insurance Fund.

   2. Federal executive body authorized in area of defense, other federal executive bodies, military personnel are
running service for, federal executive bodies authorized in area of internal affairs, migration, execution of penalties,
communication by courier, customs business, control of narcotic drugs and psychotropic substances movement, State
Fire Preventive Service of the Russian Federation Ministry for Civil Defense, Emergencies and Liquidation of
Consequences of Natural Disasters, tribunals, Court Department at Superior Court of the Russian Federation, Military
Collegium of the Superior Court of the Russian Federation in the part of money allowances, food and property
provision and other payments being received by military personnel, rank and file and officers of Russian Federation
bodies of internal affairs, State Fire Preventive Service of Russian Federation Ministry for Civil Defense, Emergencies
and Liquidation of Consequences of Natural Disasters, personnel of criminal executive system, customs system of the
Russian Federation and bodies for control of narcotic drugs and psychotropic substances movement, having special
rank with the view of performance of military duties and other service being equalized to the one aforesaid according
to legislation of the Russian Federation, shall be exempted from tax payment (the clause is in the wording enforced
since 2 August 2004 by the Federal act N 58-FZ on 29 June 2004, - see the previous wording).

  3. Cash allowances of prosecutors, investigators, judges of Federal Courts and Justice of Peace of Russian
Federation entities shall not be incorporated into the assessment basis (the clause is in the wording enforced since 1
January 2005 by the Federal act N 70-FZ on 20 July 2004, - see the previous wording).

  4. The clause has lost its force since 2 August 2004 - the Federal act N 58-FZ on 29 June 2004. - See the previous
wording.
  (The article is in the wording enforced from 1 January 2002 by the Federal act No 198-FZ of 31 December 2001)




                                 Chapter 25. Tax on profit of organizations
                         (the chapter has been added since 1 January 2002 by the Federal act
                                             No 110-FZ of 6 August 2001)



                                              Article 246. Taxpayers
  Payers of the tax on profit of organizations (hereinafter in this chapter referred to as taxpayers) shall be:

  Russian organizations;

  Foreign organizations performing their activity in the Russian Federation via their permanent representative offices
and (or) gaining incomes from sources in the Russian Federation.



                                         Article 247. Object of taxation
   The object of taxation for the tax on profit of organizations (hereinafter referred to as the tax) shall be profit gained
by the taxpayer.

  For purposes of this chapter, profit shall mean:

  1) for Russian organizations - gained incomes reduced by the value of expenses made, which are determined in
accordance with this chapter (the clause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of
29 May 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording)

    2) for foreign organizations performing their activity in the Russian Federation via their permanent representative
offices - incomes gained via these permanent representative offices, reduced by the value of expenses made by these
permanent representative offices, which are determined in accordance with this chapter (the clause is in the wording
enforced from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relations arising from
1 January 2002, - see the previous wording)

   3) for other foreign organizations - incomes gained from sources in the Russian Federation. Incomes of these
taxpayers shall be determined in accordance with this chapter (the clause is in the wording enforced from 1 July 2002
by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relations arising from 1 January 2002, - see the
previous wording).




                             Article 248. Procedure for determining incomes
                                           Classification of incomes
  1. For purposes of this chapter, incomes shall include:

  1) revenues from sales of goods (works, services) and property rights (hereinafter referred to as sales revenues);

   For purposes of this chapter goods shall be determined according to clause 3 of article 38 of this Code (the
paragraph has been added from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to
relations arising from 1 January 2002).

  2) non-sales incomes.

   When determining incomes, sums of taxes claimed by the taxpayer from the buyer (acquirer) of goods (works,
services, property rights) according to this Code shall be excluded.

   Incomes shall be determined on the basis of primary documents and other documents confirming the incomes
obtained by the taxpayer, tax accounting documents (the paragraph is in the wording enforced from 1 January 2006
by the Federal act N 58-FZ of 6 June 2005, - see the previous wording).

  Sales revenues shall be determined according to the procedure established by article 249 of this Code with the
accounts of this article.

  Non-sales incomes shall be determined according to the procedure established by article 250 of this Code with the
account of the provisions of this article.

   2. For purposes of this chapter property (works, services) or property rights shall be considered received on a
gratis basis, if receipt of this property (works, services) or property rights is not connected with arising with the
recipient of a duty to transfer the property (property rights) to the transferring person (perform works for the
transferring, render services to the transferring person).

  3. Incomes gained by the taxpayer, the cost of which is expressed in foreign currency shall be taken into account in
aggregate with the incomes, the cost of which is expressed in rubles.

  Incomes gained by the taxpayer, the cost of which is expressed in standard units shall be taken into account in
aggregate with the incomes, the cost of which is expressed in rubles.

   Recalculation of the above mentioned incomes shall be provided by the taxpayer subject to the method of
considering incomes according to articles 271 and 273 of this Code, selected in the accounting policy for purposes of
taxation.

   For purposes of this chapter, the sums shown within the taxpayer’s incomes shall not be included once more within
his incomes.
   (The clause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect
shall apply to relations arising from 1 January 2002, - see the previous wording).



                                         Article 249. Sales revenues
   1. For purposes of this chapter sales revenues shall mean proceeds of sales of goods (works, services) of both
internal production and previously acquired, proceeds of sales of property rights (the clause is in the wording enforced
from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relations arising from 1
January 2002, - see the previous wording).

   2. Proceeds of sales is determined on the basis of all the earnings connected with settlement of sold goods (works,
services) or property rights expressed in pecuniary form and (or) in kind. Depending on the method of considering
incomes and expenditures selected by the taxpayer, earnings connected with settlement of sold goods (works,
services) or property rights shall be considered for purposes of this chapter according to article 271 or 273 of this
Code (the clause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect
shall apply to relations arising from 1 January 2002, - see the previous wording).
   3. Specifics of determining sales revenues for certain categories of taxpayers or sales revenues received referring
to specific circumstances shall be established by the provisions of this chapter.




                                       Article 250. Non-sales revenues
  For purposes of this chapter non-sales revenues shall be revenues not specified in article 249 of this Code.

  In particular, taxpayer’s non-sales taxes shall be:

   1) those from share participation in other organizations, except for the income directed for payment of the
additional stocks (shares), placed among stockholders (participants) of the organization (the clause is supplemented
from 14 July 2005 by the Federal act N 58-FZ of 6 June 2005, the effect shall apply to relations arising from 1 January
2005, - see the previous wording);

   2) in the form of positive (negative) rate difference appearing as a result of deviation of the rate of selling (buying)
foreign currency from the official rate established by the RF Central Bank on the date of delegation of the right of
ownership to the foreign currency (specifics of determining bank revenues from these operations shall be established
by article 290 of this Code) (the clause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29
May 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording);

  3) in the form of fines, penalties and (or) other sanctions for violation of contract agreements, acknowledged by the
debtor or to be paid by the debtor on the basis of the court verdict, which came into the legal force, as well as sums of
compensation for losses or damage (the clause is in the wording enforced from 1 July 2002 by the Federal act No 57-
FZ of 29 May 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording);

   4) from giving property in rent (sub-rent), if these revenues are not determined by the taxpayer according to the
procedure established by article 249 of this Code (the clause has been added to from 1 July 2002 by the Federal act
No 57-FZ of 29 May 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording);

   5) from providing for use rights to results of intellectual activity and individualization means equaled thereto (in
particular, from granting for use rights arising from patents for inventions, industrial samples and other types of
intellectual property), if these revenues are not determined by the taxpayer according to the procedure established by
article 249 of this Code (the clause has been added to from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002;
the effect shall apply to relations arising from 1 January 2002, - see the previous wording);

   6) in the form of interest received under contracts of loan, credit, bank account, bank deposit, as well as on
securities and other debentures (specifics of determining bank revenues in the form of interest shall be established by
article 290 of this Code);

   7) in the form of sums of restored reserve, if costs of creation thereof were accepted within the costs according to
the procedure and on terms established by articles 266, 267, 292, 294, 294_1, 300, 324 and 324_1 of this Code (the
clause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply
to relations arising from 1 January 2002; has been added since 1 February 2005 by the Federal Act N 204-FZ of 29
December 2004, the effect shall apply to legal relations arising from 1 January 2003, - see the previous wording);

  8) in the form of property (works, services) or property rights obtained on a gratuitous basis, except for the cases
specified in article 251 of this Code.

   If property (works, services) are obtained on a gratuitous basis, estimation of incomes shall be provided basing on
the market prices determined with the account of article 40 of this Code, but not lower than the residual value
determined according to this chapter - for the depreciated property, and not lower than the costs of production
(acquisition) - for other property (works, performed, services rendered). Information on prices must be confirmed by
the taxpayer - recipient of the property (works, services) with documents or by an independent evaluation (the
paragraph is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall
apply to relations arising from 1 January 2002, - see the previous wording);

   9) in the form of income distributed in favour of the taxpayer, with their participation in standard partnership, taken
into account according to the procedure provided by article 278 of this Code (the clause is in the wording enforced
from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relations arising from 1
January 2002, - see the previous wording);
  10) in the form of the income of previous years revealed in the accounting (tax) period;

    11) in the form of positive (negative) rate difference appearing as a result of revaluation of the property in the form
of currency valuables (except for the securities nominated in foreign currency) and claims (obligations), whose cost is
expressed in foreign currency, as well as on currency bank accounts, established in connection with the change of the
official foreign currency rate to ruble of the Russian Federation, established by the RF Central Bank (the clause is in
the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relations
arising from 1 January 2002; is supplemented from 14 July 2005 by the Federal act N 58-FZ of 6 June 2005, the effect
shall apply to relations arising from 1 January 2002, - see the previous wording);

   For purposes of this chapter, the positive rate difference shall be the one arising in final evaluation of the property
in the form of currency valuables (except for the securities nominated in foreign currency) and claims expressed in
foreign currency, or in price reduction of obligations expressed in foreign currency (the paragraph has been added
from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply to relations arising from 1
January 2002; is supplemented from 14 July 2005 by the Federal act N 58-FZ of 6 June 2005, the effect shall apply to
relations arising from 1 January 2002, - see the previous wording);

   11_1) in the form of the difference in sums arising with taxpayers, if the sum of the appearing obligations and
claims calculated according to the rate of standard pecuniary units established by an agreements of the sides on the
date of sales (crediting) of goods (works, services) or property rights, does not correspond to the sum in rubles
actually paid (arrived) (the clause has been added from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the
effect shall apply to relations arising from 1 January 2002);

   12) in the form of fixed assets and intangible assets received on a gratuitous basis according to international
agreements of the Russian Federation or with the RF legislation by atomic stations to increase their safety, which are
not used for production purposes (the clause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ
of 29 May 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording);

   13) in the form of the cost of received materials or other property while dismounting or disassembling of fixed
assets taken out of operation in the case of liquidation thereof (except the cases provided by subclause 18 of clause 1
of article 251 of this Code) (the clause is in the wording enforced from 1 January 2006 by the Federal act N 58-FZ of 6
June 2005, the effect shall apply to relations arising from 1 January 2002, - see the previous wording);

   14) in the form of property (including pecuniary funds), works, services not used within target orientation, which
have been received within the framework of charitable activity (as well as charitable aid, donations), target earnings,
target financing, except budgetary funds. It is norms of the RF budget legislation, which shall be applied referring to
budget funds used without target orientation.

   Upon expiration of the tax period, taxpayers who received property (including pecuniary funds), works, services
within the framework of charitable activity, target earnings or target financing shall submit a report on the target use of
the funds and means received to fiscal agencies at the place of their registration, according to the form approved by
the RF Ministry for finance (the paragraph is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of
29 May 2002; the effect shall apply to relations arising from 1 January 2002, is in the wording enforced since 2 August
2004 by the Federal act N 58-FZ of 29 June 2004, - see the previous wording);

  The paragraph shall be excluded since 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall
apply to relations arising from 1 January 2002. - See the previous wording.

   15) in the form of received pecuniary funds, not used within target orientation, intended for forming up reserve for
development and provision of functioning and safety of atomic power stations, or pecuniary funds received by atomic
stations from these reserves according to the legislation of the Russian Federation on atomic power use (the clause is
in the wording enforced since 1 January 2006 by the Federal act N 58-FZ on 6 June 2005, - see the previous
wording);

   16) in the form of sums by which the authorized capital (fund) of the organization was reduced in the accounting
(tax) period, if this reduction was provided with simultaneous refusal from return of the cost of the corresponding part
of the fees (investments) to stockholders (participants) of the organization (except for the cases provided by
subclause 17 of clause 1 of article 251 of this Code) (the clause is in the wording enforced since 1 January 2006 by
the Federal act N 58-FZ of 6 June 2005, - see the previous wording);
   17) in the form of return of previously paid fees (investments) from a non-commercial organization, if these fees
(investments) were previously taken into account within the costs in creation of the taxable base;

   18) in the form of creditors indebtedness (obligations to creditors) written off in connection with expiration of the
legal limitation or on the other grounds, except for the cases provided by subclause 21 of clause 1 of article 251 of this
of the Code. This Clause’s Provisions shall not extend to hypothec agent’s writing off credit indebtedness in the form
of liabilities to holders of bonds secured by hypothec (the clause is in the wording enforced from 1 July 2002 by the
Federal act No 57-FZ of 29 May 2002; the effect shall apply to relations arising from 1 January 2002; is in the wording
enforced since 1 January 2005 by the Federal act N 105-FZ on 20 August 2004; is in the wording enforced since 1
January 2006 by the Federal act N 58-FZ of 6 June 2005, - see the previous wording);

   19) in the form of incomes received from operations with financial instruments of futures deals with the account of
provisions of articles 301-305 of this Code;

   20) in the form of surplus of material - industrial stocks and other property revealed as a result of the inventory (the
clause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 May 2002; the effect shall apply
to relations arising from 1 January 2002; is in the wording enforced since 1 January 2006 by the Federal act N 58-FZ
of 6 June 2005, - see the previous wording);

   21) in the form of cost of mass media and book products to be replaced in return or writing off these products on
the grounds provided by subclauses 43 and 44 of clause 1 of article 264 of this Code. Estimation of cost of the
products specified in this clause shall be made according to the procedure for estimation of the rests of the finished
goods, established by article 319 of this Code (the clause has been added from 1 July 2002 by the Federal act No 57-
FZ of 29 May 2002; the effect shall apply to relations arising from 1 January 2002; is supplemented since 1 January
2006 by the Federal act N 58-FZ of 6 June 2005, - see the previous wording).



         Article 251. Incomes not taken into account in determining the taxable base
  1. The following incomes shall not be taken into account in determining the taxable base:

   1) in the form of property, property rights, works or services received from other persons in the order of prepayment
of goods (works, services) by taxpayers determining incomes and expenditures according to the computation method;

  2) in the form of property, property rights received in the form of pledge or mortgage as security of liabilities;

   3) in the form of property, property rights or non-property rights having pecuniary assessment, received in the form
of fees (investments) in the authorized capital (fund) of the organization (including income in the form of surplus of the
price of placement of stocks (shares) over their par value (initial size);

   4) in the form of property, property rights received within the deposit (contribution) by the participant of a company
or partnership (their legal successor or heir), in the case of leaving (withdrawal) the company or partnership, or in
distributing the property of the liquidated company or partnership between the participants (the subclause is in the
wording enforced since 1 January 2006 by the Federal act N 58-FZ of 6 June 2005, - see the previous wording);

   5) in the form of property, property rights and (or) non-property rights having pecuniary assessment, received within
the contribution by the participant of a contract of standard partnership (contract of joint activity) or their legal
successor in the case of singling their stake out of the property staying in the common ownership of participants of the
agreement or division of this property (the subclause is in the wording enforced since 1 January 2006 by the Federal
act N 58-FZ of 6 June 2005, - see the previous wording);

   6) In the form of funds and other property received in the form of gratuitous aid (assistance) according to the
procedure established by the Federal act “On gratuitous aid (assistance) to the Russian Federation and amendments
and additions to certain RF legal acts on taxes and fees and on establishing privileges on payments to state
extrabudgetary funds in connection with rendering gratuitous aid (assistance) to the Russian Federation”;

  7) In the form of fixed assets and intangible assets received on a gratuitous basis according to international
contracts of the Russian Federation, as well as according to the RF legislation by atomic stations for safety
improvement, used for production purposes;

  8) In the form of property received by budget institutions by the decision of executive authorities of all the levels;
   9) In the form of property (including funds), which arrived to the commissioner, agent and (or) another attorney in
connection with carrying out of obligations under a contract of commission, agency or another similar contract, as well
as for the account of compensation for costs made by the commissioner, agent and (or) another attorney for the client,
principal and (or) another trustee, if these costs are not to be included in the costs of the commissioner, agent and (or)
another attorney in accordance with the terms of the contracts made. These incomes shall not include commissions,
agent’s or similar remuneration;

   10) In the form of property (including funds) received under contracts of credit or loan (other similar funds or other
property regardless of the form of borrowings made, including securities under debentures), as well as funds or other
property received for the account of paying these borrowings back;

  11) In the form of property received by the Russian organization on a gratuitous basis:

   From a organization, if the authorized capital (fund) of the recipient is more than 50% the contribution (stake) of the
transferring organization (the paragraph is in the wording enforced from 1 January 2003 by the Federal act No 191-FZ
of 31 December 2002, - see the previous wording);

   From a organization, if the authorized capital (fund) of the transferring side is more than 50% the contribution
(stake) of the recipient (the paragraph is in the wording enforced from 1 January 2003 by the Federal act No 191-FZ
of 31 December 2002, - see the previous wording);

   From a natural person, if the authorized capital (fund) of the recipient is more than 50% the contribution (stake) of
this natural person (the paragraph is in the wording enforced from 1 January 2003 by the Federal act No 191-FZ of 31
December 2002, - see the previous wording).

  If the property received shall not be considered income for purposes of taxation only if during one year following the
date of the receipt this property (except pecuniary funds) is not transferred to other persons;

  12) in the form of interest received according to requirements of articles 78, 79, 176 and 203 of this Code from the
budget (extrabudgetary fund);

   13) in the form of sums of guarantee fees to special funds created according to the RF legislation, intended for
reduction of risks of non-performance of obligations under deals, received in carrying out clearing activity or trade
organizing activity on the security market;

   14) in the form of property received by the taxpayer within the framework of target financing. Taxpayers who
received funds of target financing must keep separate accounting of incomes (expenditures) gained (made) within the
framework of target financing. In the absence of this accounting with the taxpayer who received funds of target
financing, these funds shall be considered as subject to taxation following the date of receipt. All the norms of the RF
budget legislation shall apply to budgets of all the levels, state extrabudgetary funds, allocated to budget institutions
according to the estimate of incomes and expenditures but not used within the target orientation.

   Target financing funds include property received by the taxpayer and used as determined by the organization
(natural person) - the source of target financing of by the federal acts (the paragraph has been added since 1 January
2005 by the Federal act N 178-FZ of 23 December 2003, - see the previous wording):
   ____________________________________________________________________
   Effect of the second paragraph of subclause 14 of clause 1 of this article (in the wording of the Federal act N 178-
FZ of 23 December 2003) shall be applied to the legal relations arising from 1 January 2004 - see the Federal act N
58-FZ of 6 June 2005.
   ____________________________________________________________________

  In the form of funds of budgets of all the levels, state extrabudgetary funds, allocated to budget institutions
according to the estimate of incomes and expenditures of the budget institution;

   In the form of grants. For purposes of this chapter grants shall mean pecuniary funds or other property, if transfer
(receipt) thereof meets the following requirements:

   Grants are provided on a gratuitous and non-return basis by Russian natural persons, non-commercial institutions
including foreign and international organizations and associations according to the list of these organizations
approved by the RF Government for realization of the concrete programs in the sphere of education, arts, culture,
public health care (directions - AIDS, narcotism, children’s oncology, including onco-haematology, nursery
endocrinology, hepatitis and tuberculosis), environment protection, protection of the rights and freedom of the person
and the citizen stipulated by the legislation of the Russian Federation, social service of the needy and socially
unprotected categories of citizens, and also for carrying out of the concrete scientific researches (the paragraph is in
the wording enforced from 1 January 2006 by the Federal act N 58-FZ of 6 June 2005, - see the previous wording);

  The paragraph has lost its force from 1 January 2006 - the Federal act N 58-FZ of 6 June 2005, - see the previous
wording

   Grants are provided on terms determined by the grantor, the report on targeted use of the grant being provided
thereto;

   In the form of investments received during investment competitions (tenders) in accordance with the procedure
established by the RF legislation;

   In the form of investments received from foreign investors for financing production capital investments, provided
they are used within one calendar year following the date of receipt;

  In the form of funds of shareholders and (or) investors accumulated on accounts of building organization;

   In the form of funds received by the mutual insurance company from organizations - members of the mutual
insurance company;

   In the form of funds received from the Russian Fundamental Research Fund, Russian technology development
Fund, Russian humanitarian scientific fund, small enterprises development assistance Fund in the scientific and
technical sphere, Federal fund of industrial innovations;

   In the form of funds that arrived for creation of the Russian technology development Fund, as well as industrial and
inter-industrial funds of financing scientific and research and development works registered according to the
procedure provided by the Federal act “On science and state scientific and technical policy”, (the paragraph has been
added from 1 January 2004 by the Federal act No 117-FZ of 7 July 2003; is in the wording enforced from 14 July 2005
by the Federal act N 58-FZ of 6 June 2005, the effect shall apply to the legal relations arising from 1 January 2005, -
see the previous wording);

   In the form of funds received by enterprises and organizations involving specifically dangerous radiation and
nuclear industries and projects, from reserves intended for provision of safety and security of these industries and
projects at all the stages of their life cycle and development according to the RF legislation on use of atomic power.
These funds shall be included in non-sales incomes, if the recipient actually used these funds beyond the target
orientation, or did not use them within the target orientation within one year after expiration of the tax period when they
arrived;

  In the form of funds of contributions for air navigation maintenance of flights of air vessels in the air space of the
Russian Federation, received by a special authority in the sphere of civil aviation;

   in the form of insurance payments of banks to the fund of deposit insuring according to the federal act on deposit
insuring of natural persons in the banks of the Russian Federation (the paragraph has been added since 1 January
2005 by the Federal act N 178-FZ of 23 December 2003; the effect shall apply to the legal relations arising from 1
January 2004, - see article 4 of the Federal act N 58-FZ of 6 June 2005);

  in the form of resources obtained by medical institutions carrying out medical activity within the system of obligatory
medical insurance, for rendering medical services to the insured from insurance organizations carrying out obligatory
medical insurance of these persons (the paragraph has been added since 1 February 2005 by the Federal Act N 204-
FZ of 29 December 2004, the effect shall apply to legal relations arising from 1 January 2003).

    15) in the form of value of stocks additionally received by the organization-stockholder, distributed among the
stockholders by the decision of the general meeting, proportionately to the number of stock belonging thereto, or the
difference between the par value of new stocks received in exchange for the primary ones and the par value of the
primary stocks of the stockholder, when stocks are distributed among the stockholders in the case of an increase of
the authorized capital of the joint-stock company (without changing the stockholder’s stake in this joint-stock
company);

  16) in the form of positive difference which formed up as a result of revaluation of precious stones, in the case of a
change of price lists of calculated prices for precious stones according to the established procedure;
  17) in the form of sums by which the authorized capital of the organization was reduced in the accounting (tax)
period in accordance with the RF legislation;

   18) in the form of cost of materials and other property obtained in dismounting, disassembling and liquidation of
projects put out of operation, eliminated in accordance with article 5 of the Convention on banning development,
production, accumulation and application of chemical weapons and elimination thereof, and part 5 of the Appendix on
inspection to the Convention on banning development, production, accumulation and application of chemical weapons
and elimination thereof;

   19) in the form of cost of irrigation and other agricultural projects obtained by producers of agricultural products
(including internal water lines, gas and electric power networks), built for the account of budget funds of all levels;

   20) in the form of property and (or) property rights received by organizations in charge of state stock of specialized
(radioactive) raw materials and fissionable materials of the Russian Federation from operations of material valuables
of state stocks of specialized (radioactive) raw materials and fissionable materials are forwarded to restoration of
these stocks;

   21) in the form of creditor indebtedness of the taxpayer for payment of taxes and duties to budgets of different
levels written off and (or) reduced otherwise in accordance with the RF legislation and by the decision of the RF
Government (the subclause is in the wording enforced from 14 July 2005 by the Federal act N 58-FZ of 6 June 2005,
the effect shall apply to the legal relations arising from 1 January 2005, - see the previous wording);

  22) in the form of property received on a gratuitous basis by state and municipal educational institutions, as well as
non-governmental educational institutions having licenses for the right to perform educational activity, charted activity;

   23) in the form of fixed assets received by organizations within the structure of the Russian defense sport and
technical organization (ROSTO) (when transferred among two and more organizations - ROSTO members), used for
training citizens in military specialties, military-patriotic education of the youth, development of aviation, technical and
military-applied kinds of sport in accordance with the RF legislation;

  24) in the form of positive difference received in revaluation of securities at the market value;

  25) in the form of sums of restored reserves for devaluation of securities (except reserves, whose cost of creation
according to article 300 of this Code previously reduced the taxable base);

  26) in the form of funds and other property received by unitary enterprises from the owner of the property of this
enterprise or an authorized body;

   27) in the form of property (including pecuniary funds) and (or) property rights received by a religious organization
in connection with serving religious rites and ceremonies, and from selling religious literature and religious objects (the
subclause is in the wording enforced from 1 January 2004 by the Federal act No 117-FZ of 7 July 2003, - see the
previous wording);

   28) in the form of sums received by operators of universal maintenance from the reserve of universal maintenance
in accordance with the RF legislation in the sphere of communication (the subclause has been added from 1 January
2004 by the Federal act No 117-FZ of 7 July 2003);

  29) as a property including funds, and (or) property rights, which have been obtained by hypothec agent in
connection with his statutory activity (the subclause has been added since 1 January 2005 by the Federal act N 105-
FZ on 20 August 2004);

   30) in the form of property (works, services) obtained by medical organizations carrying out medical activity within
the system of obligatory medical insurance from insurance organizations carrying out obligatory medical insurance for
the account of the reserve of financing of preventive measures, used according to the established procedure (the
subclause has been added since 1 February 2005 by the Federal Act N 204-FZ of 29 December 2004, the effect shall
apply to legal relations arising from 1 January 2003);

   31) in the form of the sums of income from investment funds of the pension savings intended for financing of a
savings part of labour pension, obtained by the organizations representing as insurers on obligatory pension
insurance themselves (the subclause has been added since 1 January 2006 by the Federal act N 204-FZ of 29
December 2004).
  32) in the form of capital investments as inseparable improvements of the rented property made by the tenant (the
subclause has been added since 1 January 2006 by the Federal act N 58-FZ of 6 June 2005).


   33) incomes of shipowners obtained from operation of the vessels, the vessels registered in the Russian
international register. For the purposes of the present chapter operation of the vessels registered in the Russian
international register of vessels shall be understood as using such vessels for transportation of cargoes, passengers
and luggage thereof and rendering of the other services connected with realization of the specified transportations
provided that a point of departure and (or) destination are located outside the territory of the Russian Federation, and
also renting of such vessels for rendering of such services (the subclause has been added since 23 January 2006 by
the Federal act N 168-FZ of 20 December 2005).

   2. When determining the taxable base, target earnings (except target earnings in the form of goods liable to excise
duty) shall not also be taken into account. They include target earnings from the budget to budget receivers and target
earnings for maintenance of non-commercial organizations and performance by them of charted activities, which
arrived on a gratuitous basis from other organizations and (or) natural persons, and use by these recipients according
to the target orientation. Taxpayers - recipients of these target earnings must keep separate accounting of incomes
(expenditures) gained (made) within the target earnings (the paragraph is in the wording enforced from 1 January
2004 by the Federal act No 117-FZ of 7 July 2003, - see the previous wording).

  These target earnings for maintenance of non-commercial organization and performance of non-carted activity
shall include:

   1) entrance fees, membership fees, share investments and donations considered to be as such in accordance with
the RF Civil Code (the subclause is in the wording enforced from 1 January 2006 by the Federal act N 58-FZ of 6
June 2005, - see the previous wording);

   1_1) target earnings for creation of the Russian fund of technological development, as well as other industrial and
inter-industrial funds of financing scientific-research and development works registered according to the procedure
provided by the Federal act “On science and state scientific-technical policy (the subclause has been added from 1
January 2004 by the Federal act No 117-FZ of 7 July 2003; is in the wording enforced from 14 July 2005 by the
Federal act N 58-FZ of 6 June 2005, the effect shall apply to the legal relations arising from 1 January 2005, - see the
previous wording);

  2) property transferred to non-commercial organizations according to the will in the order of inheritance;

   3) sums of financing from the federal budget, budgets of components of the Russian Federation, local budgets,
budgets of state extrabudgetary funds allocated for performance of chartered activity of non-commercial
organizations;

  4) funds and other property received for performance of charitable activity;

  5) aggregate contribution of founders of non-governmental pension funds;

   6) pension contributions to non-governmental pension funds, if thy are forwarded in the size not less than 97
percent to formation of pension reserves of the non-governmental pension fund (the subclause is in the wording
enforced from 14 July 2005 by the Federal act N 58-FZ of 6 June 2005, the effect shall apply to the legal relations
arising from 1 January 2005, - see the previous wording);

   6_1) pension accumulations including insurance premiums of obligatory pension insurance intended for financing
of the accumulative part of the labour pension in accordance with the RF legislation (the clause has been added since
1 February 2005 by the Federal Act N 204-FZ of 29 December 2004, the effect shall apply to legal relations arising
from 1 January 2004, the effect shall apply to the legal relations arising from 1 January 2004);

  7) earnings of owners to institutions created by them, used according to target orientation;

   8) deductions of lawyer’s chambers of components of the Russian Federation to general needs of the Federal
chamber of lawyers at the amount and according to the procedure determined by the All-Russian congress of lawyers;
deductions of lawyers to general needs of the lawyer’s chamber of the corresponding component of the Russian
Federation at the amount and according to the procedure determined by the annual meeting (conference) of lawyers
of the lawyer’s chamber of this component of the Russian Federation, as well as to maintenance of the corresponding
lawyer’s office, the bar or bureau (the subclause is in the wording enforced from 1 February 2003 by the Federal act
No 187-FZ of 31 December 2002, - see the previous wording);

   9) funds which arrived to trade union organizations in accordance with the collective contracts (agreements) for
carrying out by trade union organizations of social-cultural and other events provided by their charted activity;

   10) funds used according to their purposes, received by ROSTO organizations from federal executive body
authorized in area of defense and (or) another executive authority under a general contract, as well as targeted
deductions from organizations included in the ROSTO structure, used according to the founding documents for
training citizens military specialties, military-patriotic education of the youth, development of aviation and military-
applied kinds of sport, in accordance with the RF legislation (the clause is in the wording enforced since 2 August
2004 by the Federal act N 58-FZ on 29 June 2004, - see the previous wording);

  11) property (including pecuniary funds) and (or) property rights obtained by religious organizations for
performance of charted activity;

   12) resources received by a professional association of insurers created in accordance with the Federal act N 40-
FZ “On obligatory insurance of civil responsibility of owners of transport means” 25 April 2002, which are intended for
financing of compensation payments provided by the RF legislation on obligatory insurance of civil responsibility of
owners of transport means, for formation of funds meeting standards of international systems of obligatory insurance
of civil responsibility of owners of transport means, which the Russian Federation joined, as well as resources
received in accordance with the RF legislation on obligatory insurance of civil responsibility of owners of transport
means by the above-mentioned professional association of insurers in the form of reimbursement of compensation
pay-outs and expenses incurred in connection with consideration of claims of victims for compensation pay-outs (the
clause has been added since 1 February 2005 by the Federal Act N 204-FZ of 29 December 2004, the effect shall
apply to legal relations arising from 1 July 2003, the effect shall apply to legal relations arising from 1 July 2003).

   3. In case of reorganization of the organizations when determining the taxable base, the cost of the property,
property and non-property rights having a monetary estimation, and (or) obligations, obtained (transmitted) by way of
assignment in case of reorganization of legal entities which have been got (created) by the reorganized organizations
before the date of termination of the reorganization is not registered in structure of incomes of the new created, being
reorganized and reorganized organizations (the clause has been added since 14 July 2005 by the Federal act N 58-
FZ of 6 June 2005, the effect shall apply to legal relations arising from 1 January 2006).
   (The article is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect
shall apply to legal relations arising from 1 January 2002. - See the previous wording).



                         Article 252. Expenditures. Grouping of expenditures
   1. For purposes of this chapter the taxpayer shall reduce the incomes obtained by the sum of expenditures made
(except expenditures specified in article 270 of this Code).

  Expenditures shall mean costs substantiated and confirmed by documents (and in the cases provided by article
265 of this Code, losses), incurred by the taxpayer.

  Substantiated expenditures shall mean economically justified costs evaluated in terms of money.

   Expenditures confirmed by documents shall mean costs confirmed by documents according to the RF legislation or
the documents which have been made out according to the customs of business circulation, used in a foreign state
within which territory the corresponding expenditures have been made, and (or) the documents indirectly confirming
the made expenditures (including the customs declaration, order on business trip, travel papers, report on the
executed work according to the contract). Costs shall mean any costs, provided they have been made for
performance of the activity directed to gaining income (the paragraph is supplemented from 1 January 2006 by the
Federal act N 58-FZ of 6 June 2005, - see the previous wording).

   2. Subject to the character and terms of making and directions of activities of the taxpayer, expenditures shall be
subdivided into costs connected with production and sales, and non-sales expenditures (the paragraph is in the
wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations
arising from 1 January 2002, - see the previous wording).
  The paragraph has been excluded from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect
shall apply to relations arising from 1 January 2002. - See the previous wording.

   2_1. With the purpose of the present chapter, the cost (residual cost) of property, property rights having a
pecuniary estimation admits as expenditures of the new created and reorganized organizations, and (or) obligations
obtained in the procedure for assignment when reorganization of legal entities which have been got (created) by
reorganized organizations before the date of completion of the reorganization. The cost of property, property rights
having a pecuniary estimation shall be determined on the data and documents of the tax accounting of the
transmitting party for the date of transfer of the property right on the specified property, property rights.

   Expenditures of the new created and reorganized organizations (and in the cases stipulated by the present Code,
losses), stipulated by articles 255, 260-268, 275, 275_1, 279, 280, 283, 304, 318-320 of the present chapter, carried
out (incurred) by the reorganized organizations in that part which has not been registered thereby at formation of the
taxable base. With a view of taxation the specified expenditures shall be registered by organizations - assignees in the
procedure and under conditions which are stipulated by the present chapter. Structure of such expenditures and
estimation thereof shall be determined on the data and documents of the tax accounting of the reorganized
organizations for the date of termination of the reorganization (date of record’s entering on termination of activity of
each adjoined legal entity - at reorganization in the form of adjoining).

   The additional expenditures connected to transfer (reception) of the property (property rights) at reorganization of
the organizations, shall be registered in the procedure established by the present chapter with a view of taxation.
   (The clause has been added since 14 July 2005 by the Federal act N 58-FZ of 6 June 2005, the effect shall apply
to the legal relations arising from 1 January 2005).

  3. Specifics of determining expenditures for purposes of taxation for certain categories of taxpayers, or
expenditures made in connection with specific circumstances, shall be established by provisions of this chapter.

   4. If certain expenditures may on equal grounds be referred to several charges groups simultaneously, the
taxpayer shall have the right to determine independently, which group specifically they refer these expenditures to (the
subclause is in the wording enforced from 14 July 2005 by the Federal act N 58-FZ of 6 June 2005, the effect shall
apply to the legal relations arising from 1 January 2005, - see the previous wording).

  5. Expenditures made by the taxpayer, whose cost is expressed in foreign currency shall be taken into account in
aggregate with the expenditures, whose cost is expressed in rubles.

  Expenditures made by the taxpayer, whose cost is expressed in standard units shall be taken into account in
aggregate with the expenditures, whose cost is expressed in rubles.

  Recalculation of the above mentioned expenditures shall be provided depending on the method of
acknowledgement of these expenditures according to articles 272 and 273 of this Code.

  For purposes of this article sums shown within expenditures of taxpayers shall not be included again in their
expenditures.
  (The clause has been added from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall
apply to relations arising from 1 January 2002)




                  Article 253. Expenditures connected with production and sales
  1. Expenditures connected with production and sales shall include:

   1) Expenditures connected with manufacturing (production), storage and delivery of goods, performance of works,
rendering of services, acquisition and (or) sales of goods (works, services, property rights);

   2) expenditures on keeping and operation, repair and technical maintenance of the fixed assets and other property,
as well as maintenance thereof in working order;

  3) expenditures on development of natural resources;

  4) expenditures on scientific research and development works;
  5) expenditures on obligatory and voluntary insurance;

  6) other expenses connected with production and (or) sales.

  2. Expenditures connected with production and (or) sales shall be subdivided into:

  1) material expenditures;

  2) expenditures on remuneration of labour;

  3) sums of charged depreciation;

  4) other expenditures.

   3. Specifics of determining expenditures of banks, insurance organizations, non-governmental pension funds,
consumer cooperation organizations, professional participants of security market and foreign organizations shall be
established with the account of provisions of article 291, 292, 294, 296, 297, 299, 300, 307, 308, 309 and 310 of this
Code (the paragraph is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the
effect shall apply to relations arising from 1 January 2002, - see the previous wording).




                                      Article 254. Material expenditures
  1. Material expenditures, in particular, shall include the following taxpayer’s costs:

   1) on acquisition of raw materials and (or) materials used in production of goods (performance of works, rendering
of services) and (or) making their base, or being a necessary component in production of goods (performance of
works, rendering of services);

  2) on acquisition of materials used:

  the paragraph has been excluded 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall
apply to relations arising from 1 January 2002, - see the previous wording;

  for packaging and other preparation of produced and (or) sold goods (including pre-selling preparation);

   for other production and economic purposes (tests, control, maintenance, operation of fixed assets and other
similar purposes);

   3) for acquisition of instruments, devices, stock, instruments, laboratory equipment, special garments and other
means of individual and collective protection stipulated by the legislation of the Russian Federation and other property
that are not depreciated property. The cost of this property is included in material expenditures in full volume, as soon
as it is put into operation (the subclause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29
January 2002; the effect shall apply to relations arising from 1 January 2002; is supplemented from 1 January 2006 by
the Federal act N 58-FZ of 6 June 2005, - see the previous wording);

  4) for acquisition of completing parts of articles to be assembled and (or) semi-finished products to be subject to
additional processing by the taxpayer (the subclause is in the wording enforced from 1 July 2002 by the Federal act
No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous
wording);

   5) for acquisition of fuel, water and energy of all types, spent for technological purposes, generation (as well as by
the taxpayer himself for production purposes) of all types of power, heating of buildings, as well as expenses on
transformation and transfer of power (the subclause is in the wording enforced from 1 July 2002 by the Federal act No
57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording);

   6) for acquisition of production works and services performed by other organizations or sole traders, as well as for
performance of these works (rendering these services) by structural subdivisions of the taxpayer (the paragraph is in
the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to
relations arising from 1 January 2002, - see the previous wording).
   Production works (services) include performance of certain operations on production (manufacturing) of products,
performance of works, rendering services, processing of raw materials (materials), control over observance of the
established technological processes, technical maintenance of fixed assets and other similar works.

   Production works (services) also include transportation services of other organizations (including sole traders) and
(or) structural subdivisions of the taxpayers themselves involved in transportation of cargoes inside the organization,
in particular, transportation of raw materials (materials), tools, parts, blanks, other types of cargoes from the basic
(central) warehouse (department) and delivery of finished products in accordance with the contract terms (the
paragraph is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect
shall apply to relations arising from 1 January 2002, - see the previous wording);

   7) referring to maintenance and operation of fixed assets and other property intended for nature protection (as well
as expenditures, connected with maintenance and operation of purification installations, ash filters, filters and other
nature protection projects, expenditures for burial of ecologically dangerous wastes, acquisition of services of other
organizations referring to acceptance, storage and elimination of ecologically dangerous wastes, purification of
sewage, formation of sanitary - protective zones according to effective state sanitary-and-epidemiologic rules and
specifications, payments for limit admissible discharge of polluting substances into the environment and other similar
expenditures) (the subclause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January
2002; the effect shall apply to relations arising from 1 January 2002; is supplemented from 1 January 2006 by the
Federal act N 58-FZ of 6 June 2005, - see the previous wording).

   2. Cost of material-industrial stocks included in material expenditures is determined on the basis of acquisition
prices (without taking into account the tax on the added cost and excises, except for the cases stipulated by the
present Code), including commissions paid to intermediary organizations, import customs duties and fees, expenses
for transportation and other costs connected with acquisition of the commodities and materials (the clause is in the
wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations
arising from 1 January 2002; is in the wording enforced from 1 January 2006 by the Federal act N 58-FZ of 6 June
2005, - see the previous wording).

   The cost of material - industrial stocks as the surpluses revealed in the course of inventory, and (or) the property
received in case of dismantle or disassembly of the fixed assets to be put off from operation shall be determined as a
sum of the tax estimated from income, stipulated by clauses 13 and 20 of the second part of article 250 of the present
Code (the paragraph has been added since 1 January 2006 by the Federal act N 58-FZ of 6 June 2005).

   3. If the cost of reusable tare accepted from the supplier with material-industrial stocks is included in the price of
these items, the cost of reusable tare shall be excluded from the total amount of acquisition costs at the price of its
possible use or sale. The cost of unreturned tare and packaging accepted from the supplier with commodities and
materials shall be included in the sum of the acquisition costs (the paragraph is in the wording enforced from 1
January 2006 by the Federal act N 58-FZ of 6 June 2005, - see the previous wording).

   Tare shall be considered reusable or unreturned under the terms of the contract for acquisition of material-industrial
stocks (the paragraph is in the wording enforced from 1 January 2006 by the Federal act N 58-FZ of 6 June 2005, -
see the previous wording).

   4. If the taxpayer uses goods of the own production as raw materials, spare parts, completing parts, semi-finished
products and other material expenses, as well as if the taxpayer includes in material expenses results of works or
services of the own production, evaluation of these products, results of works or services of the own production shall
be made on the basis of the evaluation of the finished products according to article 319 of this Code (the clause has
been added from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations
arising from 1 January 2002).

   5. The sum of material expenses of the current month shall be reduced by the sum of residues of material-industrial
stocks transferred to production but not used in production by the end of the month. Evaluation of these material-
industrial stocks must correspond to the evaluation, when they are written off (the clause has been added from 1 July
2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002;
is in the wording enforced from 1 January 2006 by the Federal act N 58-FZ of 6 June 2005, - see the previous
wording).
   ___________________________________________________________________
   Clause 4 of the previous wording shall be clause 6 of the present wording from 1 July 2002 - Federal act No 57-FZ
of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
   ___________________________________________________________________
   6. The sum of material expenses shall be reduced by the sum of returned wastes. For purposes of this chapter,
returnable wastes shall mean residues of raw materials (materials), semi-finished products, heat-transport media and
other types of material resources appearing in the process of production of goods (performance of works, rendering of
services), which have partly lost consumer properties of initial resources (chemical or physical properties) and
because of that used with increased expenses (decreased yield of products) or not used according to their direct
purpose.

   Returnable wastes shall not include residues of material-industrial stocks, which according to the technological
process are transferred to other subdivisions as full-bodied raw materials (materials) for production of other types of
goods (works, services), as well as following (adjacent) products obtained as a result of the technological process (the
paragraph is in the wording enforced from 1 January 2006 by the Federal act N 58-FZ of 6 June 2005, - see the
previous wording).

  Returnable wastes shall be evaluated according to the following procedure:

  1) at a lower price of the initial material resource (at the price of possible use), if these wastes may be used for
basic or auxilliary production, but with increased expenses (decreased yield of finished products);

   2) at the selling price, if these wastes are sold outside.
   ___________________________________________________________________
   Clause 5 of the previous wording shall be clause 7 of the present wording from 1 July 2002 - Federal act No 57-FZ
of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
   ___________________________________________________________________

  7. The following costs shall be equaled to material expenses for purposes of taxation:

   1) costs of recultivation of lands and other nature protection measures, unless otherwise established by article 261
of this Code;

  2) losses from shortage and (or) spoilage during storage and transportation of material-industrial stocks within the
norms of natural loss approved according to the procedure established by the RF Government (the subclause is in the
wording enforced from 1 January 2006 by the Federal act N 58-FZ of 6 June 2005, - see the previous wording);

   3) Technological losses in case of production and (or) transportation. Technological losses admit as losses in case
of production and (or) transportation of the goods (works, services), caused by technological features of a production
cycle and (or) process of transportation, and also physical and chemical characteristics of the used raw material (the
subclause is in the wording enforced from 1 January 2006 by the Federal act N 58-FZ of 6 June 2005, - see the
previous wording);

   4) expenses on mining preparatory works in extraction of natural resources, operational opening works at quarries
and cutting works in underground mines within the mining abstractions of mining enterprises (the subclause is in the
wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations
arising from 1 January 2002, - see the previous wording).
   ___________________________________________________________________
   Clause 6 of the previous wording shall be clause 8 of the present wording from 1 July 2002 - Federal act No 57-FZ
of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
   ___________________________________________________________________

   8. When determining the size of material expenses in writing off raw materials and materials used in production
(manufacturing) of goods (performance of works, rendering of services), one of the following method of evaluation of
the above mentioned raw materials and materials shall be applied for purposes of taxation in accordance with the
adopted organization of the accounting policy:

  Method of evaluation according to the cost of the stock unit (the paragraph is in the wording enforced from 1 July
2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, -
see the previous wording);

   Method of evaluation according to the average cost (the paragraph is in the wording enforced from 1 July 2002 by
the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the
previous wording);
   Method of evaluation according to the cost of first time acquisitions (FIFO) (the paragraph is in the wording
enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising
from 1 January 2002, - see the previous wording);

   Method of evaluation according to the cost of last time acquisitions (LIFO) (the paragraph is in the wording
enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising
from 1 January 2002, - see the previous wording).



                              Article 255. Costs of remuneration of labour

   Taxpayer’s costs of remuneration of labour shall include any charges to labourers in pecuniary form and (or) in kind
stimulating charges and additional payments, compensations connected with the work schedule or labour conditions,
premiums and lump sum allowances, costs connected with maintenance of these labourers provided by norms of the
RF legislation, labour contracts and (or) collective contracts (the paragraph is in the wording enforced from 1 July
2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, -
see the previous wording).

  For purposes of this chapter, costs of remuneration of labour shall include in particular:

  1) sums charged at the tariff rates, according to wages, costs by piece or in interest terms of the proceeds in
accordance with the forms and systems of remuneration of labour (the clause is in the wording enforced from 1 July
2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, -
see the previous wording);

   2) stimulating charges including premiums for industrial results, surcharges to tariff rates and wages for
professional skills, high achievements in labour and other similar indices;

   3) stimulating and (or) compensation charges connected with the work schedule and labour conditions, including
surcharges to tariff rates and wages for night work, multiple shift work, combining professions, expansion of service
zones, for work in hard, harmful, specially harmful labour conditions, for overtime work and work in days off and
holidays performed in accordance with the RF legislation;

   4) cost of public utilities, catering and products provided to labourers on a gratuitous basis according to the RF
legislation, free of charge dwelling provided to taxpayer’s labourers in accordance with the established RF legislation
(sums of pecuniary compensation for non-granting free dwelling, public utilities and similar services (the clause is in
the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to
relations arising from 1 January 2002, - see the previous wording);

   5) expenditures for purchase (production) given to labourers free of charge in accordance with the RF legislation or
sold to labourers at the reduced prices of uniform and outfits (in the part of the cost which is not compensated by
labourers) staying in permanent personal use. Expenditures for purchase or manufacturing shall be registered in the
same procedure by the organization of uniform and footwear which testify to belonging of labourers to this
organization (the paragraph is in the wording enforced from 1 January 2006 by the Federal act N 58-FZ of 6 June
2005, - see the previous wording);

   6) sum of the average earnings charged to labourers, kept during the time when the labourers perform state and
(or) social duties and in other cases provided by the RF labour legislation;

   7) costs of remuneration of labour kept for labourers for the time of their vacation provided by the RF legislation,
actual traveling expenses of labourers and their dependants to the place of their vacation on the territory of the
Russian Federation and back (including costs of baggage travel of labourers of organizations located in the regions of
the Far North and areas equaled thereto) in accordance with the procedure stipulated by current legislation - for
organizations financed from corresponding budgets and in the procedure stipulated by employer - for other
companies, additional payment to persons under age for reduced working time, costs of payment of intervals in the
work of mothers for feeding children, as well as costs of payment for the time connected with taking medical
examination (the clause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002;
the effect shall apply to relations arising from 1 January 2002; is in the wording enforced since 1 January 2005 by the
Federal act N 122-FZ on 22 August 2004, - see the previous wording);
   8) pecuniary compensations for unused vacations in accordance with the RF labour legislation (the clause is in the
wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations
arising from 1 January 2002, - see the previous wording);

   9) charges to labourers released in connection with reorganization or liquidation of the taxpayer, reduction of the
number of or staff of the taxpayer’s labourers (the clause is in the wording enforced from 1 July 2002 by the Federal
act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous
wording);

  10) lump sum remuneration for the length of service (surcharges for the length of service in specialty) in
accordance with the RF legislation;

  11) surcharges due to regional regulation of remuneration of labour, including charges by regional coefficients and
coefficients for work in hard natural and climate conditions (the clause is in the wording enforced since 1 January
2005 by the Federal act N 122-FZ on 22 August 2004, - see the previous wording);

   12) surcharges for continuous length of service in regions of the Far North and areas equaled thereto, in regions of
the European North and other regions with hard natural and climate conditions (the clause is in the wording enforced
since 1 January 2005 by the Federal act N 122-FZ on 22 August 2004, - see the previous wording);

   12_1) fare under actual expenditures and cost of conveyance at the rate of no more than 5 tons for family under
actual expenditures, but is not higher than the tariffs stipulated for railway transportations to the labourer of the
organization, located in the Far North regions and the districts equal thereto (in case of the railway absence the
specified expenditures shall be accepted at a rate of the minimal fare for air transport), and to members of his family in
case of moving to a new residence place to other district in connection with cancellation of labour contract with the
labourer under any grounds, including in case of his death, except for dismissal for guilty actions (the clause has been
added since 1 January 2006 by the Federal act N 58-FZ of 6 June 2005);

    13) costs of remuneration of labour kept in accordance with the RF legislation for the time of academic leaves
provided to taxpayer’s labourers and also expenditures for payment of travel to a place of study and back (the clause
is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to
relations arising from 1 January 2002; is supplemented from 1 January 2006 by the Federal act N 58-FZ of 6 June
2005, - see the previous wording);

    14) costs of remuneration of labour for the time of enforced idleness or the time of performance of lower paid work
in the cases provided by the RF legislation;

   15) expenses on additional payment to actual wage level in the case of temporary loss of disability established by
the RF legislation;

   16) sums of payments (contributions) of employers under contracts of obligatory insurance, as well as sums of
payments (contributions) of employers under contracts of voluntary insurance (contracts of non-governmental pension
security) made in favour of workers with insurance organizations (non-governmental pension funds) having licenses
issued according to the RF legislation for performance of certain types of activities in the Russian Federation.

  In the case of voluntary insurance (non-governmental pension security) these sums shall refer to expenses on
remuneration of labour under contracts:

    Of long-term life insurance, if these contracts are made for not less than 5 years and during these 5 years do not
provide insurance pay-outs, as well as in the form of rents and (or) annuities (except for insurance payments provided
in the case of death of the insured person), in favour of the insured person;

   non-state pension security subject to application of the pension plan ensuring the account of pension premiums on
registered accounts of participants of non-governmental pension funds and (or) voluntary pension insurance subject to
presence of pension grounds of the participant and (or) insured person, ensured by the RF legislation , which give the
right to the pension under the state pension insurance and (or) labour pension and during the validity period of the
pension grounds. The contracts of non-state pension security must ensure payment of pensions until the resources on
the registered account of the participant have been exhausted, but not less than five years, and contracts of voluntary
pension insurance - life payment of pensions (the paragraph is in the wording, enforced since 1 February 2005 by the
Federal Act N 204-FZ of 29 December 2004, the effect shall apply to legal relations arising from 1 January 2005, - see
the previous wording);
  Voluntary personal insurance of labourers made for not less than one year, providing payment by the insurants of
medical expenses of the insured labourers;

   Voluntary personal insurance of labourers made exclusively in the case of death of the insured person or loss by
the latter of working capacity in connection with performance of labour duties.

   The aggregate sum of payments (contributions) of employers paid under contracts of long-term life insurance of
labourers, voluntary pension insurance and (or) non-governmental pension security of labourers shall be taken into
account for purposes of taxation at the amount not exceeding 12% of the sum of costs of remuneration of labour (the
paragraph has been added since 1 February 2005 by the Federal Act N 204-FZ of 29 December 2004, the effect shall
apply to legal relations arising from 1 January 2002, - see the previous wording).

    In the case of changes made to contract terms and (or) reduction of the validity period of the contracts of long-term
life insurance, voluntary pension insurance and (or) non-governmental pension security, or cancellation thereof,
contributions of the employer under these contracts previously included in the expenses shall be subject to taxation
from the date of change of considerable terms of these contracts and (or) reduction of validity periods of these
contracts or cancellation thereof (except for the cases of cancellation of contracts beforehand because of force major
circumstances, i.e. emergency situations) (the paragraph is in the wording enforced since 1 February 2005 by the
Federal Act N 204-FZ of 29 December 2004, the effect shall apply to legal relations arising from 1 January 2002, - see
the previous wording).

   Contributions under contracts of voluntary personal insurance providing payment by the insurants of medical
expenses of the insured persons shall be included in the expenditures at the amount not exceeding 3% of the sum of
the costs of remuneration of labour.

    Contributions under contracts of voluntary personal insurance made exclusively for the case of death of the insured
labourer or loss by the latter of working capacity because of performance by him of his labour duties shall be included
in the costs at the amount not exceeding ten thousand rubles a year per one insured labourer.

   When calculating limiting sizes of payments (contributions) calculated in accordance with this subclause, sums of
payments (contributions) provided by this subclause shall not be included in the costs of remuneration of labour (the
clause has been added from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to
relations arising from 1 January 2002);

   17) sums charged at the amount of the tariff rate or wage (in the case of work performance by watch method),
provided by collective contracts for the days of travelling from the place of location of the organization (collection
point) to the place of work and back, provided by the watch work schedule, as well as for days of delay of labourers on
their way because of meteorological conditions;

  18) sums charged for work performed by natural persons attracted for work at taxpayer in accordance with special
contracts for provision of the labour force with state organizations (the clause is in the wording enforced from 1 July
2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, -
see the previous wording);

   19) in the cases provided by the RF legislation charges at the basic place of work to workers, managers or
specialists of the taxpayer during their training with giving up their job in the system of qualification improvement or
staff retraining (the clause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January
2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording);

   20) costs of remuneration of labour of donor labourers for the days of examination, blood delivery and rest provided
after each day of blood delivery;

   21) costs of remuneration of labour of workers not being on the staff of the taxpayer’s organization for performance
by them of work under civil-legal contracts (including turnkey contracts), except remuneration of labour under civil-
legal contracts made with sole traders (the clause is in the wording enforced from 1 July 2002 by the Federal act No
57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording);

   22) charges to military men provided by the RF legislation, who take up military service at state unitary enterprises
and in building organizations of federal executive authorities, where military service is provided by the RF legislation,
and soldiers and officers of bodies of internal affairs, State Fire Service, provided by federal acts, acts on the status of
military men and on institutions and bodies executing criminal punishments in the form of imprisonment (the clause is
supplemented from 1 January 2003 by the Federal act No 116-FZ of 25 July 2002, - see the previous wording);
  23) additional payments to the disabled provided by the RF legislation;

  24) expenses in the form of deductions to the reserve for forthcoming leaves to labourers and (or) to the reserve for

payment of an annual award for the length of service, incurred according to article 324 of this Code (the clause has
been added from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations
arising from 1 January 2002);
   ___________________________________________________________________
   Clause 24 of the previous wording shall be clause 25 of the present wording from 1 July 2002 - Federal act No 57-
FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
   ___________________________________________________________________

  25) other types of expenses incurred in favour of the labourer, provided by the labour contract and (or) collective
contract.




                                      Article 256. Depreciated property
   1. For purposes of this chapter depreciated property shall be property, results of intellectual activity and other
objects of intellectual property, which stay with the taxpayer on the right of ownership (unless otherwise provided by
this chapter), are used by them to gain income, and whose cost is redeemed by depreciation charges. Depreciated
property shall be considered as such, if the term of its useful exploitation exceeds 12 months and initial cost of higher
than 10000 rubles (the paragraph is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29
January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording).

   Depreciated property obtained by a unitary enterprise from the owner of the property of the unitary enterprise for
operative management or economic holding shall be depreciated with this unitary enterprise according to the
procedure established by this chapter (the paragraph is in the wording enforced from 1 July 2002 by the Federal act
No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous
wording).

   Depreciable property, received by investing company from the property’s owner according to legislation of the
Russian Federation pertaining to investment agreements in the field of services in communal utilities, is subject to
depreciation with the said company within the period of validity of the investment agreement in the procedure
established by this Chapter (the paragraph has been added since 1 January 2005 by the Federal act N 110-FZ on 20
August 2004).

   Capital investments also admit as depreciable property in the objects given in rent of the fixed assets in the form of
inseparable improvements made by tenant from the renter’s consent (the paragraph has been added since 1 January
2006 by the Federal act N 58-FZ of 6 June 2005).

   Depreciable property obtained by the organization from the property’s owner according to the legislation of the
Russian Federation on investment agreements in the sphere of activity on rendering municipal services or to the
legislation of the Russian Federation on concessive agreements, is subject to amortization at this organization during
effective term of investment agreement or concessive agreement in the procedure established by the present chapter
(the paragraph has been added since 1 January 2006 by the Federal act N 58-FZ of 6 June 2005).

   2. Land and other objects of use of nature (water, the bowels of the earth and other natural resources), as well as
material and production stock, goods, objects of building in progress, securities, financial instruments of futures deals
(including forward, futures contracts, option contracts) shall not be subject to depreciation (the paragraph is in the
wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations
arising from 1 January 2002, - see the previous wording).

   The following types of depreciated property shall not be subject to depreciation (the paragraph is in the wording
enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising
from 1 January 2002, - see the previous wording):

   1) property of budget organizations except property acquired in connection with entrepreneurial activity and used
for performance of this activity (the paragraph is in the wording enforced from 31 August 2002 by the Federal act No
110-FZ of 24 July 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording);
   2) property of non-commercial organizations received as target earnings or acquired from funds of target earnings
and used for performance of non-commercial activity (the paragraph is in the wording enforced from 1 July 2002 by
the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the
previous wording);

   3) property acquired (created) using budgetary funds of target financing. This norm shall not apply referring to
property received by the taxpayer in the course of privatization (the paragraph is in the wording enforced from 1 July
2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, -
see the previous wording);

   4) objects of external improvement (objects of forestry, road industry, where constructions were provided attracting
sources of budget or other similar target financing, specialized navigation constructions) and other similar objects (the
subclause is supplemented from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to
relations arising from 1 January 2002, - see the previous wording)

  5) productive livestock, buffaloes, oxen, deer, other domestic wild animals (except working livestock);

    6) acquired editions (books, brochures and other similar objects), works of art. The cost of the acquired editions an
other similar objects, except works of art shall be included in other expenses connected with production and sales in
full volume as soon as these objects are acquired (the subclause is in the wording enforced from 1 July 2002 by the
Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the
previous wording);

  7) the subclause has been excluded from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect
shall apply to relations arising from 1 January 2002, - see the previous wording;
  ___________________________________________________________________
  Subclause 8 of the previous wording shall be clause 7 of the present wording from 1 July 2002 - Federal act No 57-
FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
  ___________________________________________________________________

   7) property acquired (created) for the account of the funds that arrived according to subclauses 14, 19, 22, 23 and
30 of clause 1 of article 251 of this Code, as well as property specified in subclause 6 and 7 of article 251 of this Code
(the subclause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect
shall apply to relations arising from 1 January 2002; in the wording enforced from 1 January 2003 by the Federal act
No 191-FZ of 31 December 2002; is in the wording, enforced since 1 February 2005 by the Federal Act N 204-FZ of
29 December 2004, the effect shall apply to legal relations arising from 1 January 2003, - see the previous wording).

   8) acquired rights for results of intellectual activity and other objects of intellectual ownership, if under contract for
acquisition of these rights, with regular payments made during the effective period of this contract (the subclause has
been added from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations
arising from 1 January 2002).

  3. The following fixed assets shall be excluded from depreciated property for purposes of this chapter:

  Transferred (received) under contracts for gratuitous use;

  Transferred by the decision of the company management for conservation for more than 3 months;

  Being by the decision of the company management under reconstruction and modernization for more than 12
months.

   In the case of deconservation of the object of the fixed assets depreciation thereon shall be charged according to
the procedure that was effective before the moment of conservation, and the period of useful exploitation shall be
extended by the period of conservation of the object of the fixed assets.
   (The clause has been added from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall
apply to relations arising from 1 January 2002).


                             Article 257. Procedure for determining the cost
                                       Of depreciation of property
                            (the title of the article is in the wording enforced from 1 July 2002
                  by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations
                              arising from 1 January 2002, - see the previous wording)

  1. For purposes of this chapter fixed assets shall mean the part of property used as means of labour for production
and sales of goods (performance of works, rendering of services) or for management of the organization (the
paragraph is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect
shall apply to relations arising from 1 January 2002, - see the previous wording).

    Initial cost of the fixed asset shall be determined as the sum of expenses for acquisition thereof (and if the fixed
asset is obtained by the taxpayer on a gratuitous basis - as the sum at which this property is evaluated in accordance
with clause 8 of article 250 of this Code), construction, manufacturing, delivery and bringing it to the condition in which
it is suitable for use, except for the tax to the added cost and excises, except for the cases stipulated by this Code (the
paragraph is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect
shall apply to relations arising from 1 January 2002; is in the wording enforced from 1 January 2006 by the Federal act
N 58-FZ of 6 June 2005, - see the previous wording).

   Initial cost of property being the subject of leasing shall be the sum of lessor’s costs of acquisition, construction,
delivery, manufacturing and bringing to the condition when it is suitable for use, except sums of the tax to be deducted
or taken into account within the expenditures in accordance with this Code (the paragraph is in the wording enforced
from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1
January 2002, - see the previous wording).

   Renovation cost of depreciated fixed assets acquired (created) before enforcement of this chapter shall be
determined as their initial cost with the account of revaluation made before the date of enforcement of this chapter
(the paragraph is in the wording enforced from 31 August 2002 by the Federal act No 110-FZ of 24 July 2002; the
effect shall apply to relations arising from 1 January 2002, - see the previous wording)

   When determining the renovation cost of depreciated fixed assets for purposes of this chapter, revaluation of the
fixed assets shall be taken into account, made by the taxpayer’s decision as of 1 January 2002 and shown in the
taxpayer’s financial statements after 1 January 2002. This revaluation shall be taken up for purposes of taxation at the
amount not exceeding 30% of the renovation cost of certain objects of the fixed assets shown in the taxpayer’s
financial statements as of 1 January 2001 (with the account of the revaluation as of 1 January 2001 made by the
taxpayer’s decision and shown in the financial statements in 2001). The size of the revaluation (price reduction) as of
1 January 2002 shown by the taxpayer in 2002 shall not be considered income (expenditure) of the latter for purposes
of taxation. Similar procedure shall be applied to revaluation of sums of depreciation for purposes of taxation (the
paragraph is in the wording enforced from 31 August 2002 by the Federal act No 110-FZ of 24 July 2002; the effect
shall apply to relations arising from 1 January 2002, - see the previous wording).

   If the taxpayer takes up in subsequent accounting (tax) periods after enforcement of this chapter revaluation
(reduction in price) of the cost of objects of fixed assets by the market value, the positive (negative) difference of this
revaluation shall not be considered income (expenditure for purposes of taxation an shall not be taken into account in
determining the renovation cost of depreciated property in charging depreciation, taken into account for taxation
purposes in accordance with this chapter (the paragraph has been added from 31 August 2002 by the Federal act No
110-FZ of 24 July 2002; the effect shall apply to relations arising from 1 January 2002).

    The residual cost of fixed assets introduced before enforcement of this chapter shall be determined as the
difference between the renovation cost of these fixed assets and the sum of depreciation determined according to the
procedure established by paragraph five of this clause (the paragraph has been added from 31 August 2002 by the
Federal act No 110-FZ of 24 July 2002; the effect shall apply to relations arising from 1 January 2002).

   The residual cost of fixed assets introduced after enforcement of this chapter shall be determined as the difference
between their initial cost and the sum charged for the period of depreciation exploitation (the paragraph has been
added from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising
from 1 January 2002; the effect shall apply to relations arising from 1 January 2002; in the wording enforced from 31
August 2002 by the Federal act No 110-FZ of 24 July 2002, - see the previous wording).

   If the taxpayer uses objects of fixed assets of the own production, the initial cost if these objects shall be
determined as the cost of finished products calculated according to clause 2 of article 319 of this Code increased by
the sum of certain excise duties for fixed assets being goods liable to excise duty (the paragraph is in the wording
enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising
from 1 January 2002, - see the previous wording).
   2. Initial cost of the fixed assets shall change in the cases of completing building, equipment, reconstruction,
modernization, technical retooling, partial liquidation of certain objects and on other similar grounds (the paragraph is
in the wording from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations
arising from 1 January 2002, - see the previous wording).

   Works on completing building, equipment, reconstruction, modernization include works induced by the change of
technological or official purpose of equipment, building, construction or another object of depreciated fixed assets,
increased loads and (or) other new qualities.

   For purposes of this chapter, reconstruction shall mean rearrangement of the existing objects of fixed assets
connected with improvement of production and increase of its technical-economic indices and carried out according to
the design of reconstruction of fixed assets in order to increase production capacities, improvement of the quality and
change of the product range.

  Technical retooling shall imply a complex of measures for increase of technical-economic indices of the fixed
assets or certain parts thereof on the basis of implementation of advanced machinery and technology, mechanization
and automation of production, modernization and replacement of obsolete and depreciated equipment with the new,
more productive one (the paragraph is in the wording from 1 July 2002 by the Federal act No 57-FZ of 29 January
2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording).

   3. For purposes of this chapter, intangible assets shall be results of intellectual activity acquired and (or) created by
the taxpayer, and other objects of intellectual ownership (exclusive rights thereto) used in manufacturing of products
(performance of works, rendering of services) or for managerial purposes of the organization during long period of
time (duration over 12 months).

   To recognize an intangible asset, an ability is required to bring economic profit (income) to the taxpayer, as well as
properly executed documents confirming existence of the very intangible asset and (or) an exclusive right of the
taxpayer to the results of intellectual activity and (including patents, certificates, other protective documents, contract
of patent concession (acquisition), trademark).

  Intangible assets include in particular:

  1) exclusive right of the owner of the patent to the invention, production sample, useful model;

  2) exclusive right of the author and another owner of the right to use computer software, databases;

  3) exclusive right of the author and another owner of the right to use microchip typology;

  4) exclusive right for the trade mark, service sign, name of the place of origin of goods and firm name;

  5) exclusive right of the owner of the patent to selection achievements;

  6) possession of “know-how”, secret formula or process, information referring to industrial, commercial or scientific
experience.

   Initial cost of depreciated intangible assets is determined as the sum of expenses for acquisition (creation) thereof
and bringing them to the condition suitable for use, except for the tax to the added cost and excises, except for the
cases stipulated by the present Code (the paragraph is in the wording enforced from 1 January 2006 by the Federal
act N 58-FZ of 6 June 2005, - see the previous wording).

   Cost of intangible assets created by the organization itself is determined as the sum of actual expenses for
creation, manufacturing thereof (as well as material expenses, costs of remuneration of labour, costs of services of
other organizations, patent duties connected with getting patents, certificates), except for sums of the taxes taken into
account within the expenses in accordance with this Code.

  Intangible assets shall include:

  1) scientific and research, research and development and technology works;

  2) intellectual and business qualities of labourers of the organization, their qualification and aptitude to labour.
                                Article 258. Depreciation groups.
           Specifics of inclusion of depreciated property within depreciation groups
   1. Depreciated property shall be distributed in depreciated groups in accordance with the terms of useful
exploitation thereof. The date of useful exploitation is the period during which the object of fixed assets serves for
performance of goals of the taxpayer. The term of useful exploitation is determined by the taxpayer independently as
of the date of putting into operation of this object of depreciated property in accordance with the provisions of this
article and with the account of classification of fixed assets, approved by the RF Government (the paragraph is in the
wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations
arising from 1 January 2002, - see the previous wording).

   Taxpayer shall have the right to increase the term of useful exploitation of the object of fixed assets after the date
of putting it in operation, if after reconstruction, modernization or technical retooling of this object, the term of its useful
exploitation increased. The term of useful exploitation of the object of fixed assets may be extended within the limits
established for the depreciation group, which this fixed asset was included (the paragraph has been added from 1 July
2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002).

   If as a result of reconstruction, modernization or technical retooling of the object of fixed assets its term of useful
exploitation got extended, the taxpayer shall take into account the rest term of useful exploitation when calculating
depreciation (the paragraph has been added from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the
effect shall apply to relations arising from 1 January 2002).

   Capital investments in the rented objects of fixed assets specified in the first paragraph of clause 1 of article 256 of
the present chapter shall be depreciated in the following procedure (the paragraph has been added since 1 January
2006 N 58-FZ of 6 June 2005):

   capital investments, which cost is compensated to the tenant by the renter, shall be depreciated in the procedure
established by the present chapter (the paragraph has been added since 1 January 2006 N 58-FZ of 6 June 2005);

   capital investments made by the tenant from the renter’s consent, which cost is not compensated by the renter
shall be depreciated by the tenant during effective period of a rent contract proceeding from the depreciation sums
calculated with account of the term for useful use, determined for the rented objects of fixed assets according to the
Classification of fixed assets confirmed by the Government of the Russian Federation (the paragraph has been added
since 1 January 2006 N 58-FZ of 6 June 2005).

   2. The term of useful exploitation of the object of intangible assets shall be determined on the basis of the effective
period of the patent, certificate and (or) other restrictions of terms of useful exploitation of objects of intellectual
ownership in accordance with the RF legislation or applicable legislation of the foreign state, as well as on the basis of
the term of useful exploitation of intangible assets under certain contracts. For intangible assets for which the term of
useful exploitation is impossible to determine, depreciation norms are established for ten years (but not more than the
activity period of the taxpayer) (the clause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of
29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording).

   3. Depreciated fixed assets (property) shall be associated in the following depreciation groups (the paragraph is in
the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to
relations arising from 1 January 2002, - see the previous wording):

   Group one - all the short-lived property with the term of useful exploitation from 1 year to 2 years inclusive;

   Group two - property with the term of useful exploitation more than 2 years to 3 years inclusive;

   Group three - property with the term of useful exploitation more than 3 years to 5 years inclusive;

   Group four - property with the term of useful exploitation more than 5 years to 7 years inclusive;

   Group five - property with the term of useful exploitation more than 7 years to 10 years inclusive;

   Group six - property with the term of useful exploitation more than 10 years to 15 years inclusive;

   Group seven - property with the term of useful exploitation more than 15 years to 20 years inclusive;
  Group eight - property with the term of useful exploitation more than 20 years to 25 years inclusive;

  Group nine - property with the term of useful exploitation more than 25 years to 30 years inclusive;

  Group ten - property with the term of useful exploitation more than 30 years.

   4. Classification of fixed assets included in depreciation groups is approved by the RF Government (the clause is in
the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to
relations arising from 1 January 2002, - see the previous wording).

   5. For those types of fixed assets which are not specified in the depreciation groups the term of useful exploitation
is established by the taxpayer in accordance with the technical specifications or recommendations or manufacturing
organizations (the clause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January
2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording).

   6. For purposes of this chapter depreciated property shall be taken into records at its initial cost determined in
accordance with article 257 of this Code, unless otherwise provided by this chapter (the clause is in the wording
enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising
from 1 January 2002, - see the previous wording).

   7. The property received (transferred) for financial leasing under a contract of financial leasing shall be included in
the respective depreciation group by the side by which this property must be taken onto account according to the
terms of the contract of financial leasing.

   8. If rights for fixed assets are subject to the state registration in accordance with the RF legislation, these fixed
assets shall be included within certain depreciation group following the moment of confirmation by documents of the
fact of submission of the documents for registration of these rights.

  9. The clause has been excluded from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall
apply to relations arising from 1 January 2002. - See the previous wording.

  10. The clause has been excluded from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect
shall apply to relations arising from 1 January 2002. - See the previous wording.




          Article 259. Methods and procedure for calculation of sums of depreciation
   1. For purposes of this chapter taxpayers shall charge depreciation by one of the following method provided by this
article:

  1) linear method;

  2) non-linear method.

   1_1. Taxpayer is entitled to include in structure of expenditures of the accounting (tax) period charges on capital
investments at the amount no more than 10 percent of initial cost of fixed assets (except for the fixed assets obtained
gratuitously) and (or) charges incurred in case of additional construction, additional equipment, modernization,
technical modernization, partial liquidation of the fixed assets which sums are determined according to article 257 of
the present Code (the paragraph has been added since 1 January 2006 by the Federal act N 58-FZ of 6 June 2005).

   2. The sum of depreciation for purposes of taxation shall be determined by the taxpayer monthly according to the
procedure established by this article. Depreciation shall be charged separately for each object of depreciated
property.

    Depreciation of the object of depreciated property shall be charged beginning from the 1-st day of the month
following the month when this object was put in operation. Charging depreciation on the depreciated property as
capital investments in objects of the rented fixed assets which according to the present chapter is subject to
depreciation begins at the renter from the 1-st date following the month in which this property was in operation, but not
earlier than the month in which the renter has made compensation to the tenant of cost of the specified capital
investments, at the tenant - from the 1-st date following the month in which this property was put in operation (the
paragraph has been added from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to
relations arising from 1 January 2002; is supplemented from 1 January 2006 by the Federal act N 58-FZ of 6 June
2005, - see the previous wording).

    Charging depreciation of the object of depreciated property shall be stopped from the 1-st day of the month
following the month when the cost of this object was fully written off, or when this object was withdrawn from the
depreciated property of the taxpayer on any grounds (the paragraph has been added from 1 July 2002 by the Federal
act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002).

   In case of calculation of the depreciation sum expenditures on capital investments stipulated by clause 1_1 of this
article shall not be registered by the taxpayer (the paragraph has been added since 1 January 2006 by the Federal act
N 58-FZ of 6 June 2005).

   3. The taxpayer shall apply linear method of charging depreciation to buildings, constructions, transmission devices
included in groups eight - ten regardless of the terms of putting these objects in operation.

  The taxpayer shall have the right to apply one of the methods specified in clause 1 of this article to other fixed
assets.

  The method of charging depreciation chosen by the taxpayer may not be changed during the whole period of
charging depreciation for the object of depreciated property (the paragraph is in the wording enforced from 1 July
2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, -
see the previous wording).

  Depreciation referring to the object of depreciated property shall be charged in accordance with the depreciation
norm determined for this object on the basis of its term of useful exploitation.

   4. When using linear method, the sum of depreciation charged for one month referring to the object of depreciated
property shall be determined as the product of its initial (renovation) cost and the depreciation norm determined for
this object.

  When using the linear method, the depreciation norm for each object of the depreciated property shall be
determined according to the formula:

  K = [1/n] õ 100%,

   Where K is the depreciation norm in interest terms to the initial (renovation) cost of the object of depreciated
property;

  n - term of useful exploitation of this object of depreciated property expressed in months.

  5. When using non-linear method, the sum of depreciation charged for one month referring to the object of
depreciated property shall be determined as the product of residual cost of the object of depreciated property and the
depreciation norm determined for this object.

  When applying non-linear method, the depreciation norm of the object of depreciated property shall be determined
according to the formula:

  K = [2/n] x l00%,

   Where K is the depreciation norm in interest terms to the residual cost applied to this object of depreciated
property;

  n - term of useful exploitation of this object of depreciated property expressed in months.

   Beginning from the month when the residual cost of the object of depreciated property reaches 20% of the initial
(renovation) cost of this object, depreciation thereon shall be calculated according to the following procedure:

  1) for purposes of charging depreciation, residual cost of the object of depreciated property shall be fixed as the
basic cost for further calculations;

  2) the sum of depreciation charged for one month referring to this object of depreciated property shall be
determined by dividing the basic cost of this object by the number of months left until the term of useful exploitation of
this object expires (the subclause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29
January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording).

   6. If during some calendar month the organization was established, liquidated, reorganized or otherwise
transformed in a way that according to article 55 of this Code the tax period for it begins or finishes before expiration
of the calendar month, them depreciation shall be charged with the account of the following peculiarities:

  1) depreciation shall not be charged on the liquidated organization from the 1-st day of the month when liquidation
was completed, and on the reorganized organization - from the 1-st day of the month when reorganization was
completed according to the established procedure;

   2) depreciation shall be charged by an organization established, appearing as a result of reorganization from the 1-
st day of the month following the month when its state registration took place.

  Provisions of this clause shall not apply to organizations changing their legal form of organization.

   7. Referring to depreciated fixed assets used for work under aggressive environment conditions and (or) increased
shift index, the taxpayer shall have the right to apply a special coefficient to the basic depreciation norm, which must
not be higher than 2. For depreciated fixed assets being a subject of a financial leasing contract the taxpayer that
must take this fixed asset into account in accordance with the terms of the financial leasing contract, shall have the
right to apply a special coefficient to the basic norm, but not higher than 3. These provisions shall not apply to fixed
assets referring to the first, second and third depreciation groups, if the depreciation of these fixed assets is charged
by the non-linear method (the paragraph is supplemented from 1 July 2002 by the Federal act No 57-FZ of 29 January
2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording).

   Taxpayers using depreciated fixed assets for work under aggressive environment conditions and (or) increased
shift index shall have the right to apply a special coefficient specified in this clause only when charging depreciation
referring to the mentioned fixed assets. For purposes of this chapter, aggressive environment shall mean the
aggregate of natural and (or) artificial factors whose influence lead to increased obsolescence of the fixed assets
during exploitation thereof. Contact of fixed assets with explosive, fire, toxic or other aggressive technological sphere,
which may be a reason (source) for an accident shall also be equaled to work in aggressive environment.

   Taxpayers - agricultural production organizations (poultry farms, cattle breeding complexes, animal farms,
greenhouse enterprises) shall have the right to apply to the basic depreciation norm chosen independently with the
account of provisions of this chapter a special coefficient not higher than 2, referring to internal fixed assets (the
paragraph has been added from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to
relations arising from 1 January 2002).

   Taxpayers-organizations having the resident status of industrially-production specific economic zone or tourist-
recreational specific economic zone, shall have the right to apply specific factor, but not above 2 concerning the own
fixed assets to the basic norm of depreciation (the paragraph has been added since 1 January 2006 by the Federal
act N 117-FZ of 22 July 2005; is supplemented from 8 July 2006 by the Federal act N 75-FZ of 3 June 2006, - see the
previous wording).

   8. taxpayers who transferred (received) fixed assets being the subject of a leasing contract made before
enforcement of this chapter, shall have the right to charge depreciation on this property with application of methods
and norms that existed at the moment of transfer (receipt) of the property, as well as with application of a special
coefficient, but not higher than 3 (the clause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ
of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording).

   9. For light motor cars and passenger minibuses having initial cost higher than 300 thousand rubles and 400
rubles, the basic depreciation norm shall be applied with a special coefficient of 0,5.

   Organizations that received (transferred) the above mentioned light motor cars and passenger minibuses shall
include this property within a certain depreciation group and apply the basic depreciation norm (with the account of the
coefficient applied by the taxpayer), with a special coefficient 0,5 (the paragraph has been added to from 1 July 2002
by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see
the previous wording).

   10. It is admitted to charge depreciation according to depreciation norms lower than those established by this
article by the decision of the head of the taxpaying organization, fixed in the accounting policy for purposes of
taxation. Use of reduced depreciation norms shall be admitted only with the beginning of the tax year and during the
whole tax period (the clause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January
2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording).

   11. In the case of sale of depreciated property by taxpayers using reduced depreciation norms, recalculation of the
taxable base by the sum of undercharged depreciation against norms provided by this article for purposes of taxation
shall not be made.

  12. The organization acquiring previously used objects of fixed assets shall have the right to determine the
depreciation norm on this property with the account of the term of useful exploitation reduced by the number of years
(months) of exploitation of this property by previous owners (the paragraph is in the wording enforced from 1 July
2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, -
see the previous wording).

   If the term of actual use of these fixed assets by previous owners is equal or exceeds the term its useful
exploitation determined by classification of fixed assets approved by the RF Government according to this chapter, the
taxpayer shall have the right to determine the term of useful exploitation of these fixed assets independently, with the
account of safety requirements and other factors (the paragraph has been added from 1 July 2002 by the Federal act
No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002).

  13. The clause has been excluded from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect
shall apply to relations arising from 1 January 2002. - See the previous wording.

   14. Organization obtaining objects of the early using fixed assets as a deposit in the authorized (share) capital or
by way of assignment in case of reorganization of legal entities is entitled to determine the term of their useful use as
the abovesaid term established by the previous owner of these fixed assets reduced for quantity of years (months) of
depreciation of this property by the previous owner (the paragraph has been added from 14 July 2005 by the Federal
act N 58-FZ of 6 June 2005; the effect shall apply to relations arising from 1 January 2005).




                                Article 260. Costs of repair of fixed assets
  1. Costs of repair of fixed assets made by the taxpayer shall be determined like other costs and acknowledged for
purposes of taxation in the accounting (tax) period when they were made, at the amount of actual costs.

  2. Provisions of this article shall also be applied referring to lessee’s costs of depreciated fixed assets, if the
contract (agreement) between the lessee and lessor does not provide compensation for these costs.

   3. To provide during two or more tax periods regular inclusion of costs of repair of fixed assets, taxpayers shall
have the right to create reserves for forthcoming repairs of fixed assets in accordance with the procedure established
by article 324 of this Code.
   (The article is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect
shall apply to relations arising from 1 January 2002. - See the previous wording).




                       Article 261. Costs of development of natural resources
   1. For purposes of this chapter, costs of development of natural resources shall be taxpayer’s costs of geological
study of the bowels of the earth, exploration of natural resources, performance of preparatory works.

  Costs of development of natural resources shall include:

    Costs of search and assessment of deposits of natural resources (including stock audit), exploration of natural
resources and (or) hydrogeological searches provided on the area of the bowels of the earth in accordance with the
licenses or other permits of empowered authorities obtained according to the established procedure, as well as costs
of acquisition of the necessary geological and other information from other persons including state authorities (the
paragraph is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect
shall apply to relations arising from 1 January 2002, - see the previous wording);
   Costs of preparation of the territory to performance of mining, construction and other works in accordance with the
established safety rules, protection of land, bowels of the earth and other natural resources and environment,
including arrangement of temporary ways and roads for exportation of mined rocks, natural resources and wastes,
preparation of areas for building of certain constructions, keeping fertile soils intended for subsequent land
improvement, storage of extracted rocks, natural resources and wastes;

   Costs of compensation for the complex damage inflicted on natural resources by users of land during building and
operation of projects, on resettlement and payment of compensations for demolition of habitation during development
of deposits, as well as compensation for losses of agricultural production in the case of withdrawal of lands for
purposes not related to agricultural production, elimination and damage of deer pastures. These costs shall also
include compensations provided contracts (agreements) with local management authorities and (or) tribal, family
communities of native small peoples made by these land users (the paragraph is supplemented from 1 January 2006
by the Federal act N 58-FZ of 6 June 2005, - see the previous wording).

  2. Costs of development of natural resources made after enforcement of this chapter shall be included within other
costs in accordance with this chapter, if they are not financed from the budget and (or) state extrabudgetary funds.

    Costs of development of natural resources specified in clause 1 of this article shall be taken into account according
to the procedure provided by article 325 of this Code. When making costs of development of natural resources
referring to several plots of the bowels of the earth, these costs shall be taken into account separately for each plot of
the bowels of the earth in the share determined by the taxpayer according to the accounting policy adopted by them
for purposes of taxation. These costs shall be acknowledged for purposes of taxation from the 1-st day of the month
following the month when these works (stages of the work) were completed, and shall be included within other
expenses according to the following procedure (the paragraph is in the wording enforced from 1 July 2002 by the
Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the
previous wording):

  Costs provided in paragraph three of clause 1 of this article shall be included within the costs uniformly during 12
months (the paragraph has been added from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect
shall apply to relations arising from 1 January 2002);

  Costs provided in paragraph four and five of clause 1 of this article shall be included within the costs uniformly
during 5 years but not longer than the term of exploitation (the paragraph has been added from 1 July 2002 by the
Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002).

   3. If costs of development of natural resources in the certain plot of the bowels of the earth appeared to be
unsuccessful, these costs shall be acknowledged for purposes of taxation from the 1-st day of the month following the
one when the taxpayer notified the federal authority for management of the state fund of the bowels of the earth or its
territorial subdivision on termination of further geological-searching, geological-explorative and other works in this plot
in connection with the lack of prospects.

   Geological-searching, geological-explorative and other works shall be considered unsuccessful, if as a result
thereof the taxpayer has made a decision on termination of further works on the respective plot of the bowels of the
earth in connection with lack of prospects of finding stocks of natural resources or in connection with impossibility or
inexpedience of building or exploitation of underground constructions not related with extraction of natural resources.

  The procedure provided by this clause shall be applied to costs of development of natural resources referring to the
part of the territory (aquatory) provided by the certain license. The taxpayer must keep separate records of these
costs on the respective part of the territory (aquatory).

  These costs shall be included within other costs according to the procedure provided by clause 2 of this article (the
paragraph is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect
shall apply to relations arising from 1 January 2002, - see the previous wording).

   4. The procedure for acknowledgement of costs of development of natural resources for purposes of taxation
provided by this article shall also be applied to costs of building (drilling) of the explorative holes at deposits of oil and
gas, which appeared to be unproductive, performance of a complex of geological works and tests using this hole, as
well as to subsequent liquidation of this hole. This procedure shall be applied by the taxpayer regardless of
continuation or termination of further works on the respective plot of the bowels of the earth after liquidation of the
unproductive hole, subject to separate accounting of costs referring to this hole. Costs referring to the unproductive
hole shall be acknowledged for purposes of taxation uniformly during 12 months from the 1-st day of the month
following the one when this hole was liquidated according to the established procedure as having carried out its
functions.

  The decision on considering certain hole unproductive shall be made only once and shall not be subject to change.
The taxpayer shall notify the fiscal agency at the place of location thereof on the decision made referring to each hole
not later than the deadline provided by this chapter for submission of the tax declaration for the accounting (tax)
period, when he actually included the costs (part of these costs) referring to the hole within other costs.

    5. Costs of unsuccessful works on development of natural resources shall not be included within taxation purposes,
if during five years before the date, when the taxpayer was granted rights for geological study of the bowels of the
earth, exploration and extraction of natural resources or other use of the plot of the bowels of the earth, similar works
had already been performed. This provision shall not apply, if these works were performed on the basis of principally
different technology and (or) referring to other natural resources.

   6. Costs of acquisition of works (services), geological and other information from other persons, as well as from
state authorities, as well as costs of independent carrying out works on development of natural resources shall be
made for taxation purposes at the amount of actual costs (the clause is in the wording enforced from 1 July 2002 by
the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the
previous wording).



        Article 262. Costs of scientific researches and (or) research and development
   1. Costs of scientific researches and (or) research and development shall be those referring to creation of new or
improvement of manufactured products (goods, works, services), in particular, costs of invention work, expenses on
forming up the Russian fund of technological development, other industrial and inter-industrial funds of financing
scientific researches and research and development works registered according to the procedure provided by the
Federal act “On science and state scientific-technical policy” (the clause has been added from 1 July 2002 by the
Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002; in the
wording enforced from 1 January 2004 by the federal act No 117-FZ of 7 July 2003, - see the previous wording).

   2. Taxpayer’s expenses on scientific research and (or) research and development referring to creation of new or
improvement of manufactured products (goods, works, services), in particular, expenses on inventions made by them
independently or in cooperation with other organizations (at the amount corresponding to his share of expenses), as
well as on the basis of contracts under which he acts as a customer of these researches or developments, shall be
acknowledged for taxation purposes after completion of these researches or developments (completion of certain
stages of the work) and making an acceptance deed by the sides in accordance with the procedure provided by this
article (the paragraph is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002;
the effect shall apply to relations arising from 1 January 2002, - see the previous wording).

   These expenses shall uniformly included by the taxpayer within other costs during two years subject to use of
these researches and developments in production and (or) in selling goods (performing works, rendering services)
from the 1-st day of the month following the one when these researches (certain stages of the researches) were
completed (the paragraph has been added to from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the
effect shall apply to relations arising from 1 January 2002; is in the wording enforced from 1 January 2006 by the
Federal act N 58-FZ of 6 June 2005, - see the previous wording).

   Taxpayer’s costs of scientific research and (or) research and development performed in order to create new or
improve applied technologies, create new types of raw materials or materials, which have not generated a positive
result shall also be included within other expenses uniformly during three years at the amount of expenses actually
made, according to the procedure provided by this clause (the paragraph is in the wording enforced from 1 January
2006 by the Federal act N 58-FZ of 6 June 2005, - see the previous wording).

   Taxpayer’s costs of scientific research and (or) research and development (including those not given a positive
result), performed by the taxpayers-organizations registered and working within the territories of specific economic
zones, created according to the legislation of the Russian Federation, shall admit in that accounting (tax) period in
which they have been performed, at the amount of expenses actually made (the paragraph has been added from 1
January 2006 by the Federal act N 117-FZ of 22 July 2005).

   3. Taxpayer’s costs of scientific research and (or) research and development performed in the form of deductions
to creation of the Russian fund of technological development, other industrial and inter-industrial funds of financing
scientific researches and research and development works registered according to the procedure provided by the
Federal act “On science and state scientific-technical policy” shall be acknowledged for taxation purposes within 0,5%
of incomes (gross proceeds) of the taxpayer.

   Effect of paragraph one of this clause shall not apply to costs of industrial and inter-industrial funds of financing
scientific researches and research and development works made in the form of deductions to creation of the Russian
fund of technological development.
   (The clause has been added from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall
apply to relations arising from 1 January 2002; in the wording enforced from 1 January 2004 by the federal act No
117-FZ of 7 July 2003, - see the previous wording).
   ___________________________________________________________________
   Clause 3 of the previous wording shall be clause 4 of the present wording from 1 July 2002 - Federal act No 57-FZ
of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
   ___________________________________________________________________

   4. Provisions of clause 2 of this article shall not apply to costs of scientific research and (or) research and
development in organizations carrying out scientific research and (or) research and development as an executor
(contractor or subcontractor). These costs shall be considered as costs of performance of activities by these
organizations directed to gaining incomes.

   5. If as a result of expenses made on scientific research and (or) research and development the taxpayer
organization gains exclusive rights to the results of the intellectual activity specified in clause 3 of article 257 of this
Code, these rights shall be considered intangible assets to be depreciated according to clause 2 of article 258 of this
Code (the clause has been added from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall
apply to relations arising from 1 January 2002).




                       Article 263. Costs of obligatory and voluntary insurance
                                              Of property
   1. Costs of obligatory and voluntary insurance of property involves insurance payments referring to all kind of
obligatory insurance, as well as the following types of voluntary insurance of property:

  1) voluntary insurance of means of transport (water, air, land, pipeline), including the leased one, the costs of
maintaining which are included in the production and sales costs;

  2) voluntary insurance of cargoes;

  3) voluntary insurance of the production fixed assets (including the leased ones), intangible assets, projects of
capital construction in progress (as well as those leased);

  4) voluntary insurance of risks connected with performance of construction and erection works;

  5) voluntary insurance of commodity and material stocks;

  6) voluntary insurance of the crop of agricultural plant and animals;

   7) voluntary insurance of other property used by the taxpayer in performance of the activity directed with gaining
income;

   8) voluntary insurance of responsibility for infliction of damage, if this insurance is a term for the taxpayers to
perform their activity in accordance with international obligations of the Russian Federation or generally accepted
international requirements (the subclause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of
29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording).

   2. Costs of obligatory types of insurance (established by the RF legislation) shall be included within other costs
within the insurance tariffs approved according to the RF legislation and requirements of international conventions. If
these tariffs have not been approved, costs of obligatory insurance shall be included within other costs at the amount
of actual costs.
  3. Costs referring to voluntary types of insurance specified in this article shall be included within other costs at the
amount of actual costs (the clause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29
January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording).



                    Article 264. Other costs connected with production and (or)
                                               Sales
  1. Other costs connected with production and sales shall include the following taxpayer’s expenses:

   1) sums of taxes and fees, customs duties and fees charged according to the procedure established by the RF
legislation, except those specified in article 270 of this Code (the subclause is in the wording enforced from 14 July
2005 by the Federal act N 58-FZ of 6 June 2005; the effect shall apply to relations arising from 1 January 2005, - see
the previous wording);

  2) costs of certification of products and services;

  3) sums of commissions and other similar costs of works performed (services rendered) by other organizations;

   4) sums of port and air terminal fees, costs of navigation services and other similar costs (the subclause is in the
wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations
arising from 1 January 2002, - see the previous wording);

  5) sums of paid resettlement allowances within the norms established according to the RF legislation;

   6) costs of providing fire safety of the taxpayer in accordance with the RF legislation, costs of maintenance of gas
rescuing service, costs of services on protection of property, maintenance of guard-fire safety alarm system, costs of
acquisition of services of the fire safety service and other guard services, including services rendered by out-
departmental protection under law-executive authorities of the Russian Federation according to the legislation of the
Russian Federation as well as costs of maintenance of the internal security system carrying out functions of economic
protection of bank and economic operations and safety of material values (except costs of getting equipped,
acquisition of weapons and other specific protection means) (the subclause is in the wording enforced from 1 July
2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002;
is supplemented from 14 July 2005 by the Federal act N 58-FZ of 6 June 2005, the effect shall apply to relations
arising from 1 January 2005, - see the previous wording);

   7) costs of provision of normal labour conditions and safety rules measures provided by the RF legislation, costs of
civil defense in accordance with the RF legislation, as well as costs of treating professional diseases of labourers
involved in work with poisonous or heavy labour conditions, costs of maintenance of premises and inventory of public
health posts located directly on the territory of the organization (the subclause is in the wording enforced from 1 July
2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, -
see the previous wording);

   8) costs of recruitment of labourers including costs of services of special organizations for selection of personnel
(the subclause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect
shall apply to relations arising from 1 January 2002, - see the previous wording);

   9) costs of rendering services on guarantee repair and maintenance, including deductions to the reserve for
forthcoming expenses on guarantee repair and guarantee maintenance (with the account of provisions of article 267
of this Code);

   10) rent (leasing) payments for rented (taken for leasing) property and also expenses for purchase of the property
transferred to leasing. If the property obtained under a contract of leasing is accounted by the leasing recipient,
leasing payments shall be considered the following expenses according to this subclause:

   at leasing recipient - rent (leasing) payments less the sum of depreciation charged on this property according to
article 259 of this Code;

   at leasing giver - expenses for purchase of the property transferred to leasing.
   (The subclause is in the wording enforced from 1 January 2006 by the Federal act N 58-FZ of 6 June 2005, the
effect shall apply to relations arising from 1 January 2005. - See the previous wording)
  11) costs of maintenance of official transport (motor, railway, air and other kinds of transport). Costs of
compensation for use of personal cars and motorbikes for official purposes within the norms established by the RF
Government (the subclause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January
2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording);

  12) travel expenses, in particular on:

  travel of the labourer to the place of business and back to the place of permanent work;

   rent of dwelling premises. According to this item, labourer’s expenses on payment for additional services rendered
in hotels (except expenses on services of bars and restaurants, expenses on room services, expenses for use of
recreational-health improvement projects shall be compensated according to this expenditure item;

   daily or field allowance within the norms approved by the RF Government (the paragraph is in the wording enforced
from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1
January 2002, - see the previous wording);

  execution and issuance of visas, passports, vouchers, invitations and other similar documents;

  consulate fees, air terminal fees, fees for the right of entrance, pass, transit of motor and other transport, for use of
sea channels, other similar constructions and other similar payments and fees;

   12_1) costs of delivery from the place of residence (gathering) to the place of work and back of workers employed
in organizations performing their activities by watch method or in field (expedition) conditions. These earnings must be
provided by collective contracts (the paragraph has been added from 1 July 2002 by the Federal act No 57-FZ of 29
January 2002; the effect shall apply to relations arising from 1 January 2002);

  13) costs of nutrition ration of crews of sea, river and air vessels within the norms approved by the RF Government;

   14) costs of lawyer’s and information services (the subclause is in the wording enforced from 1 July 2002 by the
Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the
previous wording);

   15) costs of consultation and other analytical services (the subclause is in the wording enforced from 1 July 2002
by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see
the previous wording);

   16) payment to the state and (or) private notary for notary execution. These costs shall be accepted within the
tariffs approved according to the established procedure;

  17) costs of auditing services (the subclause is in the wording enforced from 1 July 2002 by the Federal act No 57-
FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording);

  18) costs of management of the organization or its certain subdivisions, as well as costs of acquisition if services
on management of the organization or its certain subdivisions (the subclause is in the wording enforced from 1 July
2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, -
see the previous wording);

   19) costs of services on providing labourers (technical and managerial personnel) by other organizations for
participation in the production process, management of production or for performance of other functions connected
with production and (or) sales (the paragraph is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ
of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording);

   20) costs of publication of accounts, as well as publication and other disclosure of other information, if the RF
legislation entrusts the taxpayer with an obligation to publishing (disclosure) thereof;

  21) costs connected with submission of forms and data of the state statistical supervision, if the if the RF legislation
entrusts the taxpayer with an obligation to submit thereof;
   22) representative costs connected with official reception and services to representatives of other organizations
taking part in negotiations for purposes of establishment and maintenance of cooperation, in accordance with the
procedure provided by clause 2 of this article;

   23) costs of training and retraining personnel on the taxpayer’s staff on the contract basis, according to the
procedure provided by clause 3 of this article;

   24) costs of stationary goods;

   25) costs of postal, telephoning, telegraph and other similar services, costs of payment for communication services,
services of computation centers and banks including costs of fax and sputnik communication, electronic mail, as well
as information systems (SWIFT, Internet and other similar systems);

   26) costs connected with acquisition of the right to use computer software and databases under contracts with the
owner of the right (under license agreements). These costs shall also include those for acquiring exclusive rights for
computer software at the cost of less than 1000 rubles and updating computer software and databases (the subclause
has been added to from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to
relations arising from 1 January 2002, - see the previous wording);

   27) costs of current study (research) of the market, collection of information directly connected with production and
sales of goods (works, services) (the subclause is in the wording enforced from 1 July 2002 by the Federal act No 57-
FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording);

   28) costs of advertising of produced (acquired) and (or) sold goods (works, services), taxpayer’s activity, trademark
and service sign, including participation in exhibitions and fairs, with the account of provisions of clause 4 of this article
(the subclause is supplemented from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall
apply to relations arising from 1 January 2002, - see the previous wording);

   29) fees, contributions and other obligatory payments paid to non-commercial organizations, if payment of these
fees, contributions and other obligatory payments is the term of performance the activity by taxpayers - payers of
these fees, contributions and other obligatory payments;

   30) fees paid to international organizations and to the organizations giving payment systems and electronic
systems of the information transfer, if payment of these fees is an obligatory term of performance the activity by
taxpayers - payers of these fees, or is the term for international organizations to render services necessary for the
taxpayers - payers of these fees to perform this activity (the subclause is supplemented from 1 January 2006 by the
Federal act N 58-FZ of 6 June 2005, - see the previous wording);

   31) costs connected with payment to other organizations of services concerning maintenance and sales according
to the procedure established by the RF legislation of pledged or mortgaged objects for the time during which the
object stayed with the pledgee having been transferred by the pledger.

   32) Costs of maintenance of watch and temporary settlements including dwelling and every day life objects,
auxilliary holdings and other similar services in organizations carrying out their activities by watch method or working
in field (expedition) conditions. For purposes of taxation these costs shall be acknowledged within the norms for
maintenance of these objects and services approved by self-management bodies at the place of taxpayer’s activity. If
these norms have not been approved by local self-management bodies, the taxpayer shall have the right to apply the
procedure of determining costs of maintenance of these objects, which is effective for similar objects located on this
territory and staying within the competence of the above mentioned authorities (the subclause is in the wording
enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising
from 1 January 2002, - see the previous wording);

   33) Deductions of enterprises and organizations operating especially dangerous radiation and nuclear productions
and projects, in order to form up reserves intended for providing safety of these productions and projects at all the
stages of their life cycle and development, in accordance with the RF legislation on the use of atomic energy and
according to the procedure established by the RF Government (the subclause is in the wording enforced from 1 July
2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, -
see the previous wording);

   34) Costs of preparation and development of new industries, shops and aggregates;

   35) Non-capital costs connected with improvement of technology, organization of production and management;
   36) Costs of accounting services rendered by other organizations or sole proprietors (the subclause is in the
wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations
arising from 1 January 2002, - see the previous wording);

  37) Recurrent (current) payments for use of rights to results of intellectual activity and individualization means (in
particular, rights arising from patent for inventions, industrial samples and other types of intellectual property);

   38) Costs made by the taxpayer - organization using labour of the disabled persons in the form of funds directed to
purposes providing social security of the disabled, if the disabled make not less than 50% of the total number of
labourers of this taxpayer and the share of costs of payment for the labour of the disabled is not less than 25% of the
costs of remuneration of labour (the paragraph is in the wording enforced from 1 July 2002 by the Federal act No 57-
FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording);

   Goals of social security of the disabled are considered the following in conformity with the RF legislation (the
paragraph is in the wording enforced from 1 January 2006 by the Federal act N 58-FZ of 6 June 2005, - see the
previous wording):

  improvement of labour conditions and labour protection of the disabled (the paragraph has been added from 1
January 2006 by the Federal act N 58-FZ of 6 June 2005);

   creation and keeping of working places for the disabled (including purchase and assembling of equipment and
organization of labour of home working labourers) (the paragraph has been added from 1 January 2006 by the
Federal act N 58-FZ of 6 June 2005);

  training (as well as new professions and methods of labour) and employment of the disabled (the paragraph has
been added from 1 January 2006 by the Federal act N 58-FZ of 6 June 2005);

  manufacturing and repair of orthopedic products (the paragraph has been added from 1 January 2006 by the
Federal act N 58-FZ of 6 June 2005);

  acquisition and maintenance of technical rehabilitation means (including acquisition of guide dogs) (the paragraph
has been added from 1 January 2006 by the Federal act N 58-FZ of 6 June 2005);

   sanatorium and resort service of the disabled, and also the persons accompanying the 1-st group disabled and
disabled children (the paragraph has been added from 1 January 2006 by the Federal act N 58-FZ of 6 June 2005);

  protection of rights and legal interests of the disabled (the paragraph has been added from 1 January 2006 by the
Federal act N 58-FZ of 6 June 2005);

  actions for integration of the disabled into society (including cultural, sports and other similar actions) (the
paragraph has been added from 1 January 2006 by the Federal act N 58-FZ of 6 June 2005);

   provision of equal opportunities of the disabled and other citizens (including transport service of the persons,
accompanying the 1-st group disabled and disabled children (the paragraph has been added from 1 January 2006 by
the Federal act N 58-FZ of 6 June 2005);

  acquisition and distribution among the disabled of the printed editions of public organizations of the disabled (the
paragraph has been added from 1 January 2006 by the Federal act N 58-FZ of 6 June 2005);

  acquisition and distribution among the disabled of video materials with subtitles or sign language translation (the
paragraph has been added from 1 January 2006 by the Federal act N 58-FZ of 6 June 2005);

   contributions to maintenance of public organizations of the disabled (the paragraph has been added from 1
January 2006 by the Federal act N 58-FZ of 6 June 2005).
   ____________________________________________________________________
   The third paragraph of subclause 38 of the previous wording from 1 January 2006 shall be the 15-th paragraph of
clause 38 of this wording - the Federal act N 58-FZ of 6 June 2005.
   ____________________________________________________________________
   When determining the total number of the disabled, the disabled working combining their main work with another
one, under turnkey contracts and other civil-legal contracts shall not be included in the list average number of
labourers;

   39) costs of taxpayers - public organizations of the disabled, as well as taxpayers - institutions whose sole owner is
public organizations of the disabled, in the form of funds forwarded to performance of activities of the specified public
organizations of the disabled and to purposes specified in subclause 38 of this clause.

   Recipients of funds intended for performance of activities of the public organizations of the disabled and for
purposes of social security of the disabled shall upon expiration of the tax period submit to certain fiscal agencies a
report on targeted use of the funds received (the paragraph is in the wording enforced from 1 July 2002 by the Federal
act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous
wording).

   In the case of non-targeted use of these funds, these funds shall be considered income of the taxpayer that
received these funds from the moment when the recipient actually used it without target orientation (violated the terms
of granting these funds).

   Costs specified in subclause 38 of this clause and in this subclause may not be included in costs concerning
production and (or) sale of goods liable to excise duty, mineral raw materials, other natural resources and other goods
according to the list determined by the RF Government, as agreed with All-Russian organizations of the disabled, as
well as rendering intermediary services concerning sales of these goods mineral raw materials, other natural
resources (the paragraph is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January
2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording);

   39_1) costs of taxpayers - organizations whose authorized capital fully consists of contributions of religious
organizations in the form of sums of profit obtained from sales of religious literature and religious objects, subject to
transfer of these sums to performance of the chartered activity of these religious organizations (the paragraph has
been added from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations
arising from 1 January 2002);

   39_2) costs for formation of reserves of the forthcoming expenses with a view of social protection of the disabled in
the procedure established by article 267_1 of the present Code, stipulated by subclause 38 of the present clause
which are performed by the taxpayer - public organization of the disabled, and also by the taxpayer - organization
using work of the disabled if from the general number of workers the disabled make not less than 50 percent of such
taxpayer and share of expenses for labour payment of the disabled in expenses for labour payment makes not less
than 25 percent (the paragraph has been added from 1 January 2006 by the Federal act N 58-FZ of 6 June 2005);

   40) costs of registration of rights to real estate property and land, deals with these objects, payment for supply of
information in registered rights, payment for services of authorities and specialized organizations on evaluation of
property, manufacturing documents for making cadastre and technical records (inventory) of real-estate objects;

   41) costs under civil-legal contracts (including turnkey contracts) made with sole traders not staying on the staff of
the organization;

  42) expenses of taxpayers - agricultural organizations for nutrition of labourers employed in agricultural works;

   43) costs of replacement of scrap printed periodicals, as well as those which have lost their marketable state as a
result of transportation and (or) sales, and missing copies, but not more than 7% of the cost of the circulation of the
certain number of the printed periodical;

    44) losses in the form of scrap mass media and book products, as well as those which have lost their marketable
state or unsold within the terms specified in this subclause (obsolete), which is written off by the taxpayers involved in
manufacturing and issue of the mass media and book products, within not more than 10% of the cost of the circulation
of the certain number of the printed periodical or certain circulation of book products, as well as costs of writing off and
utilization of scrap mass media and book products, as well as those which have lost their marketable state or
remained unsold.

  Costs shall mean cost of mass media and book products remaining unsold within the following terms:

  For printed periodicals - within the term until issue of the next number of the respective printed periodical;
  For books and other non-periodical printed editions - within 24 months after their coming out;

  For calendars (regardless of their type) - until the 1(st) of April of the year they refer to;

   45) fees for obligatory insurance against industrial accidents and professional diseases made in accordance with
the RF legislation;

   46) taxpayers deductions to provide supervisory activities provided by the RF legislation of specialized institutions
in order to provide control over observance by these taxpayers of certain requirements and conditions, as well as
taxpayer’s deductions to reserves created in accordance with the RF legislation regulating the activities in the sphere
of communication;

  47) losses due to scrap (the subclause has been added from 1 July 2002 by the Federal act No 57-FZ of 29
January 2002; the effect shall apply to relations arising from 1 January 2002);

   48) costs concerning maintenance of premises of public catering projects providing services to labour collectives
(including sums of charged depreciation, costs of repair of premises, costs of illumination, heating, water supply,
electric power supply, fuel for preparing meals), unless similar costs shall be registered according to article 275_1 of
the present Code (the paragraph has been added from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002;
the effect shall apply to relations arising from 1 January 2002; is supplemented from 1 January 2006 by the Federal
act N 58-FZ of 6 June 2005, - see the previous wording);
   ___________________________________________________________________
   Subclause 47 of the previous wording shall be clause 49 of the present wording from 1 July 2002 - Federal act No
57-FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
   ___________________________________________________________________

   48_1) employer’s expenses for payment of the allowance for temporary disability as a result of a disease or trauma
(except industrial accidents and professional diseases) for the first two days of the labourer’s disability in accordance
with the RF legislation in the part not covered by insurance payments, made for labourers by insurance organizations
having licenses issued in accordance with the RF legislation for the corresponding type of activity under contracts with
the employers in favour of labourers in the case of their temporary disability as a result of a disease or trauma (except
industrial accidents and professional diseases) for the first two days of the labourer’s disability (the clause has been
added since 1 February 2005 by the Federal Act N 204-FZ of 29 December 2004, the effect shall apply to legal
relations arising from 1 January 2005);

    48_2) payments (premiums) of employers under contracts of voluntary personal insurance made with insurance
organizations having licenses issued in accordance with the RF legislation for the corresponding type of activity in
favour of labourers in the case of their temporary disability as a result of a disease or trauma (except industrial
accidents and professional diseases) for the first two days of disability. These payments (premiums) shall be included
in the expenses, if the sum of the insurance payment under these contracts does not exceed the size of the allowance
for temporary disability as a result of a disease or trauma (except industrial accidents and professional diseases) for
the first two days of disability of the labourer determined in accordance with the RF legislation. The aggregate sum of
these payments (premiums) of employers and premiums specified in paragraph ten of clause 16 of article 255 of this
Code shall be included in the expenses at the amount not exceeding 3% of the sum of expenses for remuneration of
labour (the clause has been added since 1 February 2005 by the Federal Act N 204-FZ of 29 December 2004, the
effect shall apply to legal relations arising from 1 January 2005);

  49) other costs connected with production and (or) sales.

   2. Representative costs shall include taxpayer’s costs of official receptions and (or) services to representatives of
other organizations taking part in negotiations in order to establish and (or) maintain mutual cooperation, as well as to
participants arriving to meetings of the board or another administrative authority of the taxpayer, regardless of the
place of holding these events. Representative costs shall include costs of official receptions (breakfast, dinner or
another similar event) for the above mentioned persons, as well as officials of the taxpayer organization taking part in
the negotiations, transportation services to deliver these persons to the place of holding the representative event and
(or) meeting of the board and back, buffet service during the negotiations, payment of services of translators not being
on the staff of the taxpayer during representative events (the paragraph has been added to from 1 July 2002 by the
Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the
previous wording).

  Representative costs shall include costs of organizing entertainment, leisure, prevention and treatment of diseases.
  During the accounting (tax) period representative costs shall be included within other costs at the amount not
exceeding 4% of the taxpayer’s costs of remuneration of labour for this accounting (tax) period.

   3. Taxpayer’s costs of training and retraining o the staff on a contract basis with educational institutions shall
include costs concerning training and retraining (including improvement of the personnel qualification) under contracts
with these institutions.

  The above costs shall be included within other costs, if:

   1) certain services are rendered by Russian educational institutions having obtained the state accretidation (having
a certain license) or by foreign educational institutions having a certain status.

   2) training (retraining) shall be taken up by labourers staying on the taxpayer’s staff, and for operating
organizations responsible for maintenance of qualification of labourers of nuclear installations in accordance with the
RF legislation - labourers of these installations;

  3) training (retraining) programme shall promote qualification and more efficient use of trained and retrained
personnel in this organization within the framework of the activities of the taxpayer.

   Costs connected with organizing entertainment, leisure or treatment, as well as costs connected with maintenance
of educational institutions or rendering thereto of free services, payment for education in higher and secondary special
educational institutions of labourers, where they get higher and secondary special education shall not be considered
costs of training and retraining. These costs shall not be accepted for taxation purposes.

  4. For purposes of this chapter, advertising costs of the organization shall include:

   Costs of advertising events via mass media (including announcements in press, tele- and radiocasting) and
telecommunication networks;

  Costs of illumination and other outdoors advertising including manufacturing of billboards;

   Costs of participation in exhibitions, fairs, expositions, decoration of windows, sales exhibitions, sample rooms and
show rooms, manufacturing of advertising brochures and catalogues containing information on the sold goods, the
performed works, the rendered services, trade marks and service marks and (or) on the organization itself, of
reduction in price of goods which have fully or partly lost their primary properties during exposure (the paragraph has
been added to from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations
arising from 1 January 2002; is in the wording enforced from 1 January 2006 by the Federal act N 58-FZ of 6 June
2005, - see the previous wording);

   Taxpayers costs of acquisition (manufacturing) of prizes given to winners of lotteries during mass advertising
campaigns, as well as costs of other types of advertising that are not specified in paragraphs two-four of this clause,
made by them during one accounting (tax) period shall be acknowledged for purposes of taxation at the amount not
exceeding 1% of the sales proceeds determined in accordance with article 249 of this Code (the paragraph is in the
wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations
arising from 1 January 2002).



                                         Article 265. Non-sales costs
   1. Non-sales costs which are not connected with production and sales shall include substantiated costs of
activities, which are not connected directly with production and (or) sales. These costs shall in particular include:

  1) costs of maintenance of property transferred under a contract of leasing (including depreciation of this property).

   For organizations providing on a systematic basis, for temporary use or temporary ownership and use on a paid
basis, their property, and (or) exclusive rights arising from patents for inventions, production samples and other types
of intellectual property, costs connected with production and sales shall be those connected with this activity (the
paragraph is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect
shall apply to relations arising from 1 January 2002);
   2) costs in the form of interest under promissory notes of any type, including interests charged on securities and
other obligations issued (emitted) by the taxpayer with the account of peculiarities provided by article 269 of this Code
(for banks peculiarities of determining costs in the form of interests shall be determined according to article 269 and
291 of this Code), and also interests paid in connection with re-structuring of promissory notes under taxes and fees
according to the procedure, established by the Government of the Russian Federation (the paragraph is in the
wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations
arising from 1 January 2002; is supplemented from 14 July 2005 by the Federal act N 58-FZ of 6 June 2005, the effect
shall apply to relations arising from 1 January 2005, - see the previous wording);

   Costs shall mean interests under promissory notes of any type regardless of the character of the credit or loan
(current and (or) investment) provided. Cost shall mean only the sum of interests charged for actual time of use of the
borrowed funds (actual time during which these securities stayed with the third parties) and the initial profitability
established by the issuer (creditor) under conditions of issue (release, contract), but is not higher the actual (the
paragraph is in the wording enforced from 1 January 2006 by the Federal act N 58-FZ of 6 June 2005, - see the
previous wording);

   3) costs of organizing issue of internal securities, in particular, for preparation of the prospect of emission of the
securities, manufacturing or acquisition of forms, registration of securities, costs connected with services to internal
securities, including costs of services of the registry keeper, depositary, interest (dividend) payment agent, costs
connected with keeping the registry, provision of information to stockholders in accordance with the RF legislation and
other similar costs (the subclause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29
January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording);

   4) costs concerning services of securities acquired by the taxpayer, including payment for services of the registry
keeper, depositary, costs connected with obtaining information in accordance with the RF legislation and other similar
costs (the subclause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the
effect shall apply to relations arising from 1 January 2002, - see the previous wording);

  5) costs in the form of negative rate difference arising from revaluation of property in the form of currency valuables
and claims (obligations) whose cost is expressed in foreign currency, as well as on currency accounts in banks, used
because of change of the official foreign currency rate to ruble of the Russian Federation established by the RF
Central Bank (the paragraph is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January
2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording);

   For purposes of this chapter, the negative rate difference shall be the one arising in the case of reduction in price of
property in the form of currency valuables and claims expressed in foreign currency or in the case of final evaluation
of claims expressed in foreign currency (the subclause has been added from 1 July 2002 by the Federal act No 57-FZ
of 29 January 2002; the effect shall apply to relations arising from 1 January 2002);

   5_1) costs in the form of the sum difference arising with the taxpayer, if the sum of obligations and claims
calculated according to the rate of conventional monetary units established by an agreement of the sides on the sales
(crediting) date of goods (works, services), property rights does not correspond to actually arrived (paid) sum in rubles
(the subclause has been added from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall
apply to relations arising from 1 January 2002);

   6) costs in the form of negative (positive) difference arising as a result of deviation of the sales (purchase) rate of
foreign currency from the official rate of the RF Central Bank established on the date of transfer of the right of
ownership for foreign currency (peculiarities of determining bank costs of these operations shall be established by
article 291 of this Code (the subclause in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29
January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording);

  7) the subclause has been excluded from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect
shall apply to relations arising from 1 January 2002, - see the previous wording;
  ___________________________________________________________________
  Subclause 8 of the previous wording shall be clause 7 of the present wording from 1 July 2002 - Federal act No 57-
FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
  ___________________________________________________________________

   7) costs of the taxpayer applying the method of surcharging, of formation of the reserves for bad debts (according
to the procedure established by article 266 of this Code);
   ___________________________________________________________________
  Subclause 9 of the previous wording shall be clause 8 of the present wording from 1 July 2002 - Federal act No 57-
FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
  ___________________________________________________________________

   8) costs o liquidation of fixed assets put out of operation, including sums of undercharged depreciation according to
the established term of useful exploitation, as well as costs of liquidation of objects of construction in progress and
other property erection of which has not been completed (costs of dismounting, disassembling, exportation of
disassembled property), protection of the bowels of the earth and other similar works (the subclause in the wording
enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising
from 1 January 2002, - see the previous wording);
   ___________________________________________________________________
   Subclause 10 of the previous wording shall be clause 9 of the present wording from 1 July 2002 - Federal act No
57-FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
   ___________________________________________________________________

   9) costs concerning conservation and deconservation of production capacities and projects, including costs of
maintenance of conserved production capacities and projects (the subclause in the wording enforced from 1 July 2002
by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see
the previous wording);
   ___________________________________________________________________
   Subclause 11 of the previous wording shall be clause 10 of the present wording from 1 July 2002 - Federal act No
57-FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
   ___________________________________________________________________

  10) judicial costs and arbitration fees;
  ___________________________________________________________________
  Subclause 12 of the previous wording shall be clause 11 of the present wording from 1 July 2002 - Federal act No
57-FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
  ___________________________________________________________________

   11) costs of annulled industrial orders, as well as costs of production not yielding products. Costs of annulled
industrial orders, as well as costs of production not yielding products shall be acknowledged on the basis of deeds of
taxpayers approved by the manager of the person authorized by them, at the amount of direct costs determined
according to articles 318 and 319 of this Code (the subclause is supplemented from 1 July 2002 by the Federal act No
57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording);
   ___________________________________________________________________
   Subclause 13 of the previous wording shall be clause 12 of the present wording from 1 July 2002 - Federal act No
57-FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
   ___________________________________________________________________

   12) costs of operations with tare, unless otherwise provided by provisions of clause 3 of article 254 of this Code
(the subclause in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect
shall apply to relations arising from 1 January 2002, - see the previous wording);
   ___________________________________________________________________
   Subclause 14 of the previous wording shall be clause 13 of the present wording from 1 July 2002 - Federal act No
57-FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
   ___________________________________________________________________

  13) costs in the form of fines, penalties and (or) other sanctions acknowledged or to be paid by the debtor on the
basis of the enforced verdict of the court for infringement of contract obligations or liabilities, as well as costs of
compensation for inflicted damage (the subclause in the wording enforced from 1 July 2002 by the Federal act No 57-
FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording);
  ___________________________________________________________________
  Subclause 15 of the previous wording shall be clause 14 of the present wording from 1 July 2002 - Federal act No
57-FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
  ___________________________________________________________________

   14) costs in the form of sums of taxes referring to supplied material-industrial stocks, works, services, if the
creditors (obligations to creditors) under this supply was written off in the accounting period according to clause 18 of
article 250 of this Code (the subclause is in the wording enforced from 1 January 2006 by the Federal act N 58-FZ of
6 June 2005, - see the previous wording);
   ___________________________________________________________________
  Subclause 16 of the previous wording shall be clause 15 of the present wording from 1 July 2002 - Federal act No
57-FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
  ___________________________________________________________________

   15) costs of bank services including those connected with establishing and operation of electronic systems of
document turnover between the bank and the clients, including the “bank-client” system (the subclause in the wording
enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising
from 1 January 2002, - see the previous wording);
   ___________________________________________________________________
   Subclause 17 of the previous wording shall be clause 16 of the present wording from 1 July 2002 - Federal act No
57-FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
   ___________________________________________________________________

   16) costs of holding the meetings of stockholders (participants, shareholders), in particular, costs concerning rent of
premises, preparation and distribution of the information necessary for holding the meeting, and other costs directly
connected with holding the meeting (the subclause is in the wording enforced from 1 January 2006 by the Federal act
N 58-FZ of 6 June 2005, - see the previous wording);
   ___________________________________________________________________
   Subclause 18 of the previous wording shall be clause 17 of the present wording from 1 July 2002 - Federal act No
57-FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
   ___________________________________________________________________

   17) in the form of costs of carrying out works on mobilization preparation, which are not to be compensated for from
the budget, including costs of maintenance of capacities and projects loaded (used) partly but necessary for
performance of the mobilization plan (the subclause in the wording enforced from 1 July 2002 by the Federal act No
57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording);
   ___________________________________________________________________
   Subclause 19 of the previous wording shall be clause 18 of the present wording from 1 July 2002 - Federal act No
57-FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
   ___________________________________________________________________

   18) costs of operations with financial instruments of futures deals with the account of provisions of articles 301-305
of this Code;
   ___________________________________________________________________
   Subclause 20 of the previous wording shall be clause 19 of the present wording from 1 July 2002 - Federal act No
57-FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
   ___________________________________________________________________

   19) costs in the form of deductions to organizations included in ROSTO structure for accumulation and
redistribution of funds to organizations included in ROSTO structure, intended for providing preparation of citizens in
military specialties, military-patriotic up-bringing of the youth, development of aviation, technical and military-applied
kinds of sport in accordance with the RF legislation (the subclause is in the wording enforced from 1 January 2006 by
the Federal act N 58-FZ of 6 June 2005, - see the previous wording);

   19_1) costs in the form of premium (discount) paid (given) by seller to the buyer owing to performance of the
certain treaty provisions, in particular volume of purchases (the subclause has been added from 1 January 2006 by
the Federal act N 58-FZ of 6 June 2005);

   19_2) costs in the form of target deductions from the lotteries, performed at the amount and in the procedure which
are stipulated by the legislation of the Russian Federation (the subclause has been added from 1 January 2006 by the
Federal act N 58-FZ of 6 June 2005);
   ___________________________________________________________________
   Subclause 21 of the previous wording shall be clause 20 of the present wording from 1 July 2002 - Federal act No
57-FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
   ___________________________________________________________________

  20) other substantiated costs.

  2. For purposes of this chapter, losses incurred by the taxpayer in the accounting (tax) period shall be equaled to
non-sales costs shall, in particular:

  1) in the form of previous tax periods revealed in the current accounting (tax) period;
   2) sums of bad debts, and if the taxpayer has made a decision on creation of a reserve for doubtful debts, sums of
doubtful debts not covered from the reserved funds (the subclause in the wording enforced from 1 July 2002 by the
Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the
previous wording);

  3) the subclause has been excluded from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect
shall apply to relations arising from 1 January 2002, - see the previous wording;
  ___________________________________________________________________
  Subclause 4 of the previous wording shall be clause 3 of the present wording from 1 July 2002 - Federal act No 57-
FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
  ___________________________________________________________________

  3 ) losses from idleness for internal production reasons;
  ___________________________________________________________________
  Subclause 5 of the previous wording shall be clause 4 of the present wording from 1 July 2002 - Federal act No 57-
FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
  ___________________________________________________________________

  4) losses from idleness for external reasons not compensated for by guilty persons;
  ___________________________________________________________________
  Subclause 6 of the previous wording shall be clause 5 of the present wording from 1 July 2002 - Federal act No 57-
FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
  ___________________________________________________________________

   5) costs in the form of shortage of material values in production and in warehouses, at trade enterprises in the case
of absence of guilty persons, as well as losses from misappropriations, where guilty persons have not been found out.
In these cases the fact of absence of guilty persons must be confirmed by documents by the empowered state
authority;
   ___________________________________________________________________
   Subclause 6 of the previous wording shall be clause 6 of the present wording from 1 July 2002 - Federal act No 57-
FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
   ___________________________________________________________________

   6) losses because of natural disasters, fires, accidents and other emergency situations including costs connected
with prevention or liquidation of results of natural disasters or emergency situations;

  7) losses of the deal of concession of the right to claim according to the procedure established by article 279 of this
Code (the subclause has been added from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect
shall apply to relations arising from 1 January 2002).




                   Article 266. Costs of formation of reserves for doubtful debts
   1. Doubtful debt shall be any indebtedness to the taxpayer arisen in connection with selling of goods, performance
of works, rendering of services, if this indebtedness has not been paid within the terms established by the contract,
nor secured by a pledge, commission, bank guarantee; is supplemented from 14 July 2005 by the Federal act N 58-
FZ of 6 June 2005, - see the previous wording).

  For banks-taxpayers, indebtedness for which according to article 292 of this Code creation of the reserve for
possible losses under loans is provided, shall not be considered doubtful (the subclause has been added from 1 July
2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002).

   For taxpayers - insurance organizations determining incomes and expenditures according to the method of
charging under insurance, co-insurance, reinsurance contracts under which insurance reserves have been formed up,
reserve of doubtful debts under the debtors connected with payment of insurance premiums (fees) shall not be formed
up (the subclause has been added from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall
apply to relations arising from 1 January 2002).

   2. Bad debts (debts that cannot be levied) shall be those to the taxpayer under which the established limitation
term has expired, as well as the debts under which the obligation has been terminated according to the civil legislation
because of impossibility of execution thereof on the basis of the act of the state authority or liquidation of the
organization (the subclause has been added to from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the
effect shall apply to relations arising from 1 January 2002, - see the previous wording).

   3. Taxpayers shall have the right to create reserves under bad debts according to the procedure provided by this
article. Sums of deductions to these reserves shall be included within non-sales costs as of the last day of the
accounting (tax) period. This provision shall not apply referring to costs of formation of reserves for debts, which
appeared as a result of non-payment of interests, except for the banks. Banks shall have the right to form up reserves
for bad debts referring to indebtedness appearing as a result of non-payment of interests under promissory notes, as
well as referring to other indebtedness, except the loan one and those equaled thereto (the clause is in the wording
enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising
from 1 January 2002, - see the previous wording).

   4. The sum of the reserve for bad debts shall be determined according to the results of the inventory of the debtors
carried out as of the last day of the accounting (tax) period and shall be calculated the following way (the paragraph is
in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to
relations arising from 1 January 2002, - see the previous wording):

   1) for doubtful indebtedness with the start term more than 90 days - the full sum of the indebtedness revealed as a
result of the inventory shall be included in the sum of the reserve to be created;

   2) for doubtful indebtedness with the start term from45 to 90 days (inclusive) - 50% of the sum of the indebtedness
revealed as a result of the inventory shall be included in the sum of the reserve;

   3) for doubtful indebtedness with the start term up to 45 days - does not increase the sum of the reserve to be
created.

   The sum of the reserve to be created for doubtful debts may not exceed 10% of the proceeds of the accounting
(tax) period determined in accordance with article 249 of this Code (for banks - from the sum of incomes determined
in accordance with this chapter, except for incomes in the form of renovated reserves) (the paragraph has been added
to from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1
January 2002, - see the previous wording).

  The reserve for doubtful debts may be used by the organization only to cover losses from bad debts considered as
such according to the procedure established by this article.

   5. The sum of the reserve for doubtful debts not fully used by the taxpayer in the accounting period for covering
losses under bad debts may be transferred to the next accounting (tax) period. The sum of the new reserve created
according to the results of the inventory must be corrected by the sum of the residue of the reserve of the previous
accounting (tax) period. If the sum of the new reserve created according to the results of the inventory is less than the
sum of the residue of the reserve of the previous accounting (tax) period, the difference shall be included within non-
sales incomes of the taxpayer in the current accounting (tax) period. If the sum of the new reserve created according
to the results of the inventory is more than the sum of the residue of the reserve of the previous accounting (tax)
period, the difference shall be included within non-sales expenditures in the current accounting (tax) period (the
paragraph is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect
shall apply to relations arising from 1 January 2002, - see the previous wording).

   If the taxpayer makes a decision on creation of a reserve for doubtful debts, the bad debts considered as such
according to this article shall be written off for the account of the sum of the created reserve. If the sum of the created
reserve is less than the sum of bad debts to be written off, the difference (loss) shall be included within non-sales
expenditures (the paragraph is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January
2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording).



                   Article 267. Costs of formation of reserve for guarantee repair
                                    And guarantee maintenance
   1. Taxpayers selling goods (works, services) shall have the right to create reserves for forthcoming expenses for
guarantee repair and guarantee maintenance, and deductions for formation of these reserves shall be accepted for
taxation purposes according to the procedure provided by this article.
   2. Taxpayers shall make a decision independently on creation of such a reserve and determine in the accounting
policy for purposes of taxation the limiting size of the deductions to this reserve. The reserve shall be created referring
to the goods (works, services), where maintenance and repair are provided during the guarantee period according to
the contract made with the buyer.

   3. The taxpayer shall have the right to create reserves for doubtful debts according to the procedure provided by
this article. Sums of deductions to these reserves shall be included within non-sales costs as of the last day of the
accounting (tax) period. This provision shall not apply to costs of formation of the reserves for debts appearing in
connection with non-payment of interests, except for banks. Banks shall have the right to form reserves for doubtful
debts referring to the indebtedness appearing as a result of non-payment of interest on promissory notes, as well as
referring to other indebtedness, except loan indebtedness and those equaled thereto (the clause is in the wording
enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising
from 1 January 2002, - see the previous wording).

  4. The taxpayer who has not previously sold goods (works) under conditions of guarantee repair and maintenance
shall have the right to create the reserve for the guarantee repair and maintenance of goods (works) at the amount not
exceeding the expected expenditures for these costs. Expected expenditures shall mean costs provided in the plan for
performance of guarantee obligations with the account of the guarantee period.

   Upon expiration of the tax period the taxpayer must correct the size of the created reserve on the basis of the share
of costs of guarantee repair and maintenance in the volume of proceeds of sales of these goods (works) for the
expired period.

   5. The sum of the reserve for guarantee repair and maintenance of goods (works) not fully used by the taxpayer in
the tax period for repair of goods (works) sold under condition of guarantee may be transferred by them to the next tax
period. The sum of the reserve newly created in the next tax period must be corrected by the sum of the residue of the
previous tax period. The sum of the reserve newly created in the next tax period must be corrected by the sum of the
residue of the reserve of the previous tax period. If the sum of the newly created reserve is less than the sum of the
reserve residue created in the previous tax period, the difference between them is to be included within non-sales
incomes of the taxpayer of the current tax period.

   If the taxpayer has made a decision on creation of the reserve for guarantee repair and maintenance of goods
(works), costs of the guarantee repair shall be written off for the account of the sum of the created reserve. If the sum
of the created reserve is less than the sum of the costs of repair made by the taxpayer, the difference between them is
to be included within other costs.
   (The clause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect
shall apply to relations arising from 1 January 2002, - see the previous wording).

   6. If the taxpayer has made a decision on termination of sales of goods (performance of works) with the condition
of their guarantee repair and guarantee maintenance, the sum of previously created and unused reserve shall be
included within the taxpayer’s incomes upon expiration of the validity term of the contracts of guarantee repair and
guarantee maintenance (the clause has been added from 1 July 2002 by the Federal act No 57-FZ of 29 January
2002; the effect shall apply to relations arising from 1 January 2002).




 Article 267_1. Costs for formation of reserves of the forthcoming expenses intended for
                 the purposes, providing social protection of the disabled

   1. Taxpayers - public organizations of the disabled and the organizations specified in the first paragraph of
subclause 38 of clause 1 of article 264 of the present Code may create a reserve of the forthcoming expenses
intended for the purposes, providing social protection of the disabled. The specified reserves may be created for the
term not more than five years.

   2. Taxpayer on the basis of the programs developed and established thereby, independently makes a decision on
creation of the reserve specified in clause 1 of this article that is reflected in a registration policy for the taxation
purposes. Thus taxpayer’s costs performed thereby at realization of the specified programs shall be made at the
expense of a reserve specified in clause 1 of the present article.

   3. The size of a created reserve shall be determined by the planned expenses (estimate) on realization of the
programs established by the taxpayer. The sum of deductions of this reserve is included in structure of operative
expenses upon the last day of the accounting (tax) period. Thus the limiting size of deductions in the reserve specified
in clause 1 of the present article, cannot exceed 30 percent of the taxable profit obtained in the current period
estimated without registration of the specified reserve.

  4. If the sum of the created reserve specified in clause 1 of the present article become less the sums of actual
expenses for holding the programs specified in clause 2 of this article, the difference between the specified sums shall
be included in structure of operative expenses.

   The reserve sum not completely used by the taxpayer during the planned period is subject to inclusion in the
structure of operative incomes of the taxpayer of the current accounting (tax) period.

   5. The taxpayers forming reserves of the forthcoming expenses intended for the purposes providing social
protection of the disabled shall be obliged to submit the report to fiscal agencies on target using of these funds upon
termination of the tax period.

   When no-purpose using of the funds specified in the first paragraph of this clause they are subject to inclusion into
taxation base of that tax period in which no-purpose using thereof has been made.
   (The article has been added from 1 January 2006 by the Federal act N 58-FZ of 6 June 2005).




                           Article 268. Specifics of determining expenditures
                          in the case of selling goods and (or) property rights
                      (the title of the article the clause is in the wording enforced from 1 July 2002
                                      by the Federal act No 57-FZ of 29 January 2002;
                               the effect shall apply to relations arising from 1 January 2002;
                  is supplemented from 1 January 2006 by the Federal act N 58-FZ of 6 June 2005, -
                                                   see the previous wording).

   1. When selling goods and (or) property rights, the taxpayer shall have the right to reduce income from these
operations by the cost of sold goods determined according to the following (the paragraph is in the wording enforced
from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1
January 2002; is supplemented from 1 January 2006 by the Federal act N 58-FZ of 6 June 2005, - see the previous
wording).

   1) when selling depreciated property - by the cost of depreciated property determined according to clause 1 of
article 257 of this Code (the subclause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29
January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording);

  2) when selling other property (except securities, goods of internal production, purchased goods) - by the
acquisition (creation) price of this property (the subclause is supplemented from 1 January 2006 by the Federal act N
58-FZ of 6 June 2005, - see the previous wording).

  2_1) when selling property rights (shares, stakes) - for the acquisition price of these property rights (shares, stakes)
and for the sum of the expenses connected to purchase and selling thereof.

   When selling shares, stakes, obtained by participants, shareholders in case of reorganization of the organizations,
the cost determined according to clauses 4-6 of article 277 of the present Code shall be the acquisition price of such
shares.
   ____________________________________________________________________
   The second paragraph of subclause 2_1 of clause 1 of this article shall come into force from 14 July 2005, the
effect shall apply to legal relations, arising from 1 January 2005 - see article 8 of the Federal act N 58-FZ of 6 June
2005.
   ____________________________________________________________________

   When selling the property right which represents the right to claim a debt, the tax base shall be determined with
account of the provisions established by article 279 of the present Code.
   (The subclause has been added from 1 January 2006 by the Federal act N 58-FZ of 6 June 2005, - see the
previous wording).
  3) when selling purchased goods - by the cost of acquisition of these goods determined according to the
accounting policy adopted by the organization for taxation purposes by one of the following methods of evaluation of
purchased goods:

   by the cost of first time acquisitions (FIFO) (the paragraph is in the wording enforced from 1 July 2002 by the
Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the
previous wording);

   by the cost of last time acquisitions (FIFO) (the paragraph is in the wording enforced from 1 July 2002 by the
Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the
previous wording);

  by the average cost (the paragraph is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29
January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording);

  by the cost of a unit of goods (the paragraph is in the wording enforced from 1 July 2002 by the Federal act No 57-
FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording).

   When selling property and (or) property rights specified in this article, the taxpayer shall also have the right to
reduce incomes from these operations by the sum of expenditures directly connected with this sale, in particular, by
the costs of estimation, storage, maintenance and transportation of the property to be sold. When purchased goods
are sold, costs connected with purchase and sale thereof shall be formed with the account of article 320 of this Code
(the paragraph is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect
shall apply to relations arising from 1 January 2002, is in the wording enforced from 1 January 2006 by the Federal act
N 58-FZ of 6 June 2005, - see the previous wording).

   2. If the acquisition (creation) price for property (property rights) specified in subclauses 2 and 3 of clause 1 of this
article, with the account of the costs connected with its sales, exceeds proceeds of sales thereof, the difference
between these values shall be considered taxpayer’s loss taken into account for taxation purposes (the clause is in
the wording enforced from 1 January 2006 by the Federal act N 58-FZ of 6 June 2005, - see the previous wording).

    3. If the residual cost of depreciated property specified in subclause 1 of clause 1 of this article, with the account of
costs connected with sales thereof, exceeds the proceeds of sales thereof, the difference between these values shall
be considered taxpayer’s loss, taken into account for taxation purposes according to the following procedure. The loss
incurred shall be included within other costs of the taxpayers in equal shares during the term determined as the
difference between the term of useful exploitation of this property and actual term of operation thereof until the date of
sales (the paragraph is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the
effect shall apply to relations arising from 1 January 2002, - see the previous wording).



                  Article 269. Specifics of referring interests on promissory notes
                                           To expenditures
                      (the title of the article the clause is in the wording enforced from 1 July 2002
                                      by the Federal act No 57-FZ of 29 January 2002;
               the effect shall apply to relations arising from 1 January 2002, - see the previous wording)

   1. For purposes of this chapter, promissory notes shall include credits, commodity and commercial credits, loans,
bank deposits, bank accounts or other borrowings regardless of the form of execution thereof (the paragraph has
been added to from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations
arising from 1 January 2002, - see the previous wording).

   Expenditures shall mean interests charged on a promissory note of any type, provided the size of interests charged
by the taxpayer on the promissory note is not considerably deviated from the average level of interests levied under
promissory notes given in the same quarter (month - for taxpayers who got transferred to calculation of monthly
advance payments on the basis of actually gained profit) on comparable terms. Promissory notes given on
comparable terms shall mean those issued in the same currency for the same terms in comparable volumes against
similar security. When determining the average level of interests on interbank credits, only information on interbank
credits shall be taken into account. This provision shall also be applied to interests in the form of discount, which
appears with the bill provider as the difference between the price of counter purchase (redemption) and sales price of
the bill (the paragraph is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002;
the effect shall apply to relations arising from 1 January 2002, - see the previous wording).
   Considerable deviation of the size of charged interests on the promissory note shall be more than 20% deviation
towards an increase or decrease of the average level of interests charged on similar promissory notes issued in the
same quarter on comparable terms (the paragraph is in the wording enforced from 1 July 2002 by the Federal act No
57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording).

   In the absence of promissory notes issued in the same quarter on comparable terms to the Russian organizations,
as well as at the taxpayer’s choice, the limiting value of interests considered to be an expenditure shall be those equal
to the RF Central Bank refinancing rate increased 1,1- fold if the promissory note is executed in rubles, and equal to
15% for promissory notes in foreign currency (the paragraph is in the wording enforced from 1 July 2002 by the
Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002 is in the
wording enforced from 1 January 2006 by the Federal act N 58-FZ of 6 June 2005, - see the previous wording).

   For the purposes of this clause the following shall be understood under the refinancing rate of the Central bank of
the Russian Federation (the paragraph has been added from 1 January 2006 by the Federal act N 58-FZ of 6 June
2005):

   With respect to the promissory notes which are not containing a provision on changing of the interest rate within the
whole effective term of the promissory note, - the refinancing rate of the Central bank of the Russian Federation,
effective for the date of attraction of pecuniary funds (the paragraph has been added from 1 January 2006 by the
Federal act N 58-FZ of 6 June 2005);

   With respect to the other promissory notes - the refinancing rate of the Central bank of the Russian Federation,
effective for the date of a recognition of expenses as interests (the paragraph has been added from 1 January 2006
by the Federal act N 58-FZ of 6 June 2005).

   2. If the taxpayer - a Russian organization has an unpaid indebtedness under a promissory note to a foreign
organization owing directly or indirectly more than 20% of the authorized capital (fund) of this Russian organization or
under a promissory note of the Russian organization recognized to be affiliated by person of the specified foreign
organization according to the legislation of the Russian Federation, and also under a promissory note concerning
which such affiliated person and (or) this foreign organization directly act as a trustee, guarantor or obliged to provide
performance otherwise of the promissory note of Russian organization (hereinafter in this article referred to as
controlled indebtedness), and if the size of the promissory notes provided by the foreign organization unpaid by the
taxpayer - Russian organization more than three times (for banks and organizations involved in leasing activity - more
than twelve and a half times) exceeds the difference between the sum of its assets and the size of liabilities
(hereinafter for purposes of this clause referred to as internal capital) as of the last day of the accounting (tax) period,
the following rules shall be applied in determining the limiting size of interests to be included within the expenditures
with the account of clause 1 of this article (the paragraph is in the wording enforced from 1 January 2006 by the
Federal act N 58-FZ of 6 June 2005, - see the previous wording).

  The paragraph has been excluded from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect
shall apply to relations arising from 1 January 2002. - See the previous wording.

  The taxpayer must as of the last day of each accounting (tax) period calculate the limiting value of interests on
controlled indebtedness considered to be expenditures by dividing the sum of interests charged by the taxpayer in
each accounting (tax) period on the controlled indebtedness by the capitalization coefficient calculated as of the last
accounting date of the corresponding accounting (tax) period (the paragraph is in the wording enforced from 1 July
2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, -
see the previous wording).

   Capitalization coefficient shall be determined by dividing the value of the corresponding unpaid controlled
indebtedness by the value of internal capital corresponding to the share of direct or indirect participation of this foreign
organization in the authorized capital (fund) of the Russian organization, and dividing the result obtained by three (for
banks and organizations involved in leasing activity - by twelve and a half) (the paragraph is in the wording enforced
from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1
January 2002, - see the previous wording).

   For purposes of this clause, when determining the value of the internal capital, sums of promissory notes in the
form of indebtedness under taxes and fees including current indebtedness under payment of taxes and fees, sums of
delays, installments, tax credit and investment tax credit shall not be taken into account (the paragraph has been
added from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising
from 1 January 2002).
   3. Expenditures shall include interests under controlled indebtedness calculated according to clause 2 of this
article, but not more than actually charged interests.

  Rules established by clause 2 of this article should not apply referring to interests under borrowed funds, if the
unpaid indebtedness is not controlled.

   4. The positive difference between the charged interests and limiting interests calculated according to the
procedure established by clause 2 of this article shall for taxation purposes be equaled to dividends, paid to a foreign
organization concerning which there is a controllable indebtness and shall be taxed according to clause 3 of article
284 of this Code (the paragraph is in the wording enforced from 1 January 2006 by the Federal act N 58-FZ of 6 June
2005, - see the previous wording).



                  Article 270. Expenditures not accounted for taxation purposes
  The following expenditures shall not be accounted in determining the taxable base:

   1) in the form of sums of dividends charged by the taxpayer and other sums of income after taxation (the clause is
in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to
relations arising from 1 January 2002; is in the wording enforced from 14 July 2005 by the Federal act N 58-FZ of 6
June 2005, - see the previous wording);

   2) in the forms of penalties, fines and other sanctions transferred to the budget (state extrabudgetary funds), as
well as fines and other sanctions levied by state organizations, which have the right of imposing these sanctions on
the basis of the RF legislation;

  3) in the form of a contribution to the authorized capital, contribution to a simple partnership;

   4) in the form of the sum of the tax, as well as sums of payments for over-normal discharge of contaminating
substances into the environment (the clause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ
of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording);

   5) in the form of costs of acquisition and (or) creation of depreciated property and also costs effected in case of
additional construction, additional equipment, reconstruction, modernization, technical modernization of objects of the
fixed assets, except for the costs specified in clause 1_1 of article 259 of the present chapter (the paragraph is
supplemented from 1 January 2006 by the Federal act N 58-FZ of 6 June 2005, - see the previous wording);

   6) in the form of fees for voluntary insurance, except fees specified in articles 255, 263 and 291 of this Code (the
clause is in the wording enforced from 14 July 2005 by the Federal act N 58-FZ of 6 June 2005, - see the previous
wording);

  7) in the form of fees for non-governmental pension insurance, except fees specified in article 255 of this Code;

   8) in the form of interests charged by the taxpayer-borrower to the creditor over the sums considered to be
expenditures for taxation purposes in accordance with article 269 of this Code (the clause is in the wording enforced
from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1
January 2002, - see the previous wording);

   9) in the form of property (including pecuniary funds) transferred by the commissioner and (or) agent in connection
with performance of obligation under the contract of commission, agency or another similar contract, as well as for the
account of payment of costs made by the commissioner or agent for the client, principal and or another trustee, if
these costs are not to be included within the costs of the commissioner and (or) agent in accordance with the terms of
the contracts made (the clause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January
2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording);

   10) in the forms of sums of deductions to the reserve for devaluation of investments in securities created by
organizations in accordance with the RF legislation, except for the sums of deductions to reserves for devaluation of
securities made by professional participants of the security market in accordance with article 300 of this Code;
   11) in the form of guarantee fees transferred to special funds created according to requirements of the RF
legislation, intended for reduction in risks of non-performance of obligations under deals in clearing activities or
activities on organizing trade on the security market;

   12) in the form of funds or other property regardless of the form of execution of the borrowings including promissory
notes), as well as in the form of funds or other property forwarded to repayment of these borrowings (the clause is in
the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to
relations arising from 1 January 2002, - see the previous wording);

  13) in the form of sums of losses on projects rendering services to productions and holdings including objects of
housing-communal and social-cultural sphere in the part exceeding the limiting size determined according to article

275 of this Code (the clause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January
2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording);

   14) in the form of property, works, services, property rights transferred in the order of preliminary payment by
taxpayers determining incomes and expenditures by method of charging;

   15) in the form of voluntary membership fees (including entrance fees) to public organizations, sums of voluntary
fees of participants of unions, associations, organizations (associations) for maintenance of these unions,
associations, organizations (associations);

  16) in the form of cost of property (works, services, property rights) transferred on a gratuitous basis and expenses
concerning this transfer (the clause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29
January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording);

   17) in the form of cost of the property transferred within target financing in accordance with subclause 14 of clause
1 of article 251 of this Code (the clause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29
January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording);

  18) in the form of negative difference appearing as a result of revaluation of precious stones in changing price lists
according to the established procedure;

  19) in the form of sums of taxes presented according to this Code by the taxpayer to the buyer (acquirer) of goods
(works, services, property rights), unless otherwise provided by this Code (the clause has been added to from 1 July
2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, -
see the previous wording);

  20) in the form of funds transferred to trade union organizations;

  21) in the form of expenditures for any types of remuneration provided to the administration or labourers besides
remuneration paid on the basis of labour contracts;

  22) in the forms of premiums paid to workers from specific funds or target oriented incoming;

   23) in the form of sums of material aid to labourers (as well as for initial contribution for acquiring and (or)
construction of dwelling for full or partial redemption of credit provided for acquisition and (or) construction of dwelling,
non-interest or privileged loans for improvement of dwelling conditions, arrangement of house keeping business and
other social needs);

  24) for payment of leaves to labourers including women bringing up children, provided according to a collective
contract (in addition to those provided by the effective legislation);

   25) in the form of additional payments to pensions, lump sum allowances to quitting veterans of labour, incomes
(dividends, interest) on stocks or deposits of the labour collective of the organization, compensation surcharges
connected with increase of prices, provided in excess to the sizes of income indexation by decisions of the RF
Government, compensations for increase of the costs of means in canteen, buffets or preventoriums or provision
thereof at privileged prices or free of charge (except special nutrition for certain categories of workers in the cases
provided by the effective legislation, and except the cases when free or privileged nutrition is provided by labour
contracts and (or) collective contracts (the clause has been added to from 1 July 2002 by the Federal act No 57-FZ of
29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording);
   26) for payment for travel expenses to the place of work and back by transport of general use, special routs,
departmental transport, except the sums to be included within the costs of production and sales of goods (works,
services) due to technological conditions of production and except the cases when costs of travel expenses and back
are provided by labour contracts and (or) collective contracts (the clause is supplemented from 1 July 2002 by the
Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the
previous wording);

   27) for payment of price differences when selling goods (works, services) to labourers at privileged tariffs (lower
than the market prices);

   28) for payment of price differences when selling products of subsidiary holdings for organizing public catering at
privileged tariffs (lower than the market prices);

   29) for payment for vouchers for treatment or rest, excursions or journeys, training in sport groups, societies or
clubs, attendance of cultural shows, physical culture (sport) events, subscription not referring to normative-technical or
other literature used for production purposes and for payment of goods for personal consumption by labourers, as well
as other similar costs made in favour of labourers (the clause is supplemented from 1 July 2002 by the Federal act No
57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording);

   30) the clause has been excluded from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect
shall apply to relations arising from 1 January 2002, - see the previous wording;
   ___________________________________________________________________
   Clauses 31-33 of the previous wording shall be clauses 30-32 of the present wording from 1 July 2002 - Federal
act No 57-FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
   ___________________________________________________________________

   30) in the form of expenses of taxpayers - organizations of the state stock of special (radioactive) raw materials and
fissionable materials of the Russian Federation for operations with material values of the state stock of special
(radioactive) raw materials and fissionable materials connected with renovation and maintenance of the stock;

   31) in the form of stocks transferred by the taxpayer-issuer, distributed among stockholders by the decision of the
general meeting of stockholders proportionately to the number of stocks belonging thereto, or the difference between
the par value of new stocks transferred instead the primary ones and the par value of primary stocks of the
stockholder when distributing stocks among stockholders in the case of increase of the authorized capital;

  32) in the form of property or property rights delegated as pledge or mortgage;
  ___________________________________________________________________
  Clause 34 of the previous wording shall be clause 33 of the present wording from 1 July 2002 - Federal act No 57-
FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
  ___________________________________________________________________

   33) in the form of sums of taxes charged to the budgets of various levels, if these taxes were previously included by
the taxpayer within the expenditures, when writing the taxpayer’s creditors on these taxes off according to subclause
21 of clause 1 of article 251 of this Code (the clause is in the wording enforced from 1 July 2002 by the Federal act No
57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording);
   ___________________________________________________________________
   Clause 35 of the previous wording shall be clause 34 of the present wording from 1 July 2002 - Federal act No 57-
FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
   ___________________________________________________________________

  34) in the form of target deductions made by the taxpayer for purposes specified in clause 2 of article 251 of this
Code;

  36) the clause has been excluded from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect
shall apply to relations arising from 1 January 2002;
  ___________________________________________________________________
  Clause 37 of the previous wording shall be clause 35 of the present wording from 1 July 2002 - Federal act No 57-
FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
  ___________________________________________________________________

   35) for performance of unsuccessful works on development of natural resources in accordance with clause 5 of
article 261 of this Code;
  ___________________________________________________________________
  Clause 38 of the previous wording shall be clause 35 of the present wording from 1 July 2002 - Federal act No 57-
FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
  ___________________________________________________________________

   36) for scientific and research and (or) research and development which have not led to a positive result - in excess
to the size of expenses provided by article 262 of this Code (the clause is in the wording enforced from 1 July 2002 by
the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the
previous wording);
   ___________________________________________________________________
   Clause 39 of the previous wording shall be clause 37 of the present wording from 1 July 2002 - Federal act No 57-
FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
   ___________________________________________________________________

  37) in the form of sums of paid resettlement allowances in excess to the norms established by the RF legislation;
  ___________________________________________________________________
  Clause 40 of the previous wording shall be clause 38 of the present wording from 1 July 2002 - Federal act No 57-
FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
  ___________________________________________________________________

    38) for compensation for use of personal cars and motorbikes for official purposes, for payment of daily allowances,
field allowances and nutrition ration of crews of river and air vessels in excess to norms of these expenses established
by the RF Government (the clause has been added to from 1 July 2002 by the Federal act No 57-FZ of 29 January
2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording);
    ___________________________________________________________________
    Clauses 41-45 of the previous wording shall be clause 39-43 of the present wording from 1 July 2002 - Federal act
No 57-FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
    ___________________________________________________________________

  39) in the form of payments to the state and (or) private notary for notary execution in excess of the tariffs approved
according to the established procedure;

   40) in the form of fees, contributions and other obligatory payments paid to non-commercial organizations and
international organizations, besides those specified in subclauses 29 and 30 of clause 1 of article 264 of this Code;

  41) for replacement of scrap printed periodicals, those which lost their marketable state, or missing copies, as well
as losses in the form of the cost of scrap and unsold products of mass media and books, those which lost their
marketable state, besides expenses and losses specified in subclauses 43 and 44 of clause 1 of article 264 of this
Code;

  42) in the form of representative costs in the part exceeding their sizes provided by clause 2 of article 264 of this
Code;

  43) in the form of expenses provided by paragraph six of clause 3 of article 264 of this Code;
  ___________________________________________________________________
  Clause 46 of the previous wording shall be clause 34 of the present wording from 1 July 2002 - Federal act No 57-
FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
  ___________________________________________________________________

    44) for acquisition (manufacturing) of prizes given to winners of draws of these prizes during mass advertising
campaigns, as well as for other types of advertising not provided by paragraphs two-four of clause 4 of article 264 of
this Code, in excess of limiting norms established by paragraph five of clause 4 of article 264 of this Code (the clause
is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to
relations arising from 1 January 2002, - see the previous wording);
    ___________________________________________________________________
    Clause 47 of the previous wording shall be clause 45 of the present wording from 1 July 2002 - Federal act No 57-
FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
    ___________________________________________________________________

  45) for all types of deductions to the Russian fundamental research fund, Russian humanitarian scientific fund,
Fund for promotion of small forms of enterprises in scientific-technical sphere, Federal fund of industrial innovations,
Russian fund of technological development, as well as other industrial and inter-industrial funds of financing scientific-
research and research and development works registered according to the procedure provided by the Federal act “On
science and state scientific-technical policy” in excess to the sums of deductions provided by clause 3 of article 262 of
this Code (the clause is in the wording enforced from 1 January 2004 by the Federal act No 117-FZ of 7 July 2003, -
see the previous wording);
   ___________________________________________________________________
   Clause 48 of the previous wording shall be clause 46 of the present wording from 1 July 2002 - Federal act No 57-
FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
   ___________________________________________________________________

  46) negative difference obtained from revaluation of securities at the market value;

   47) in the form of costs of the founder of trust management concerning execution of the trust management
contract, if the trust management contract provides that the founder is not the acquirer of the profit (the clause has
been added from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations
arising from 1 January 2002);

  48) in the form of expenses made by religious organizations concerning religious rituals and ceremonies, as well as
concerning sales of religious literature and religious objects (the clause has been added from 1 July 2002 by the
Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002);

   48_1) in the form of the cost of property (works, services) received in accordance with subclause 30 of clause 1 of
article 251 of this Code, as well as the cost of property acquired (created) for the account of the above-mentioned
resources, as well as in the case of further disposal of this property (the clause has been added since 1 February
2005 by the Federal Act N 204-FZ of 29 December 2004, the effect shall apply to legal relations arising from 1
January 2003);

   48_2) in the form of costs, including compensation to the management company and specialized depositary, made
at the expense of the organizations’ funds which are representing themselves as insurers on obligatory pension
insurance, in case of funds’ investment of the pension savings intended for financing of a savings part of labour
pension (the clause has been added since 1 January 2006 by the Federal act N 204-FZ of 29 December 2004);

   48_3) in the form of the sums which are directed by the organizations which are representing themselves as
insurers on obligatory pension insurance, on updating of funds of the pension savings intended for financing of a
savings part of labour pension and which are reflected in pension accounts of a savings part of labour pension (the
clause has been added since 1 January 2006 by the Federal act N 204-FZ of 29 December 2004);

   48_4) in the form of funds of pension savings for financing a savings part of labour pension, transferred according
to the legislation of the Russian Federation by non-state pension funds to the Pension fund of the Russian Federation
and (or) to the other non-state pension fund, which represent as an insurer on obligatory pension insurance (the
clause has been added since 1 January 2006 by the Federal act N 204-FZ of 29 December 2004);

   48_5) costs of shipowners on service, repair and other purposes connected with maintenance and operation of
vessels, registered in the Russian international register of vessels (the clause has been added since 23 January 2006
by the Federal act N 168-FZ of 20 December 2005).

  49) other costs which do not meet the criteria specified in clause 1 of article 252 of this Code.




           Article 271. Procedure for acknowledging incomes at the charge method
   1. for purposes of this chapter, incomes shall be acknowledged in the same accounting (tax) period when they
were incurred, regardless of actual arrival of pecuniary funds, other property (works, services) and (or) property rights
(charging method).

   2. for incomes referring to several accounting (tax) periods and if the connection between incomes and
expenditures may not be determined exactly or is determined by an indirect way, incomes shall be distributed by the
taxpayer independently, with the account of the principle of uniformity of acknowledgement of incomes and
expenditures.

  For industries with a long (more than one tax period) technological cycle, if the contract terms do not provide stage
by stage delivery of works (services), the income from sales of these works (services) shall be distributed by the
taxpayer independently according to the principle of forming up expenditures of these works (services) (the paragraph
has been added from 1 January 2003 by the Federal act No 191-FZ of 31 December 2002);

   3. For sales incomes, unless otherwise provided by this chapter, the date of receipt of income shall be the sales
date of goods (works, services, property rights) determined according to clause 1 of article 39 of this Code, regardless
of actual arrival of pecuniary funds (other property (works, services) and (or) property rights) to pay for them. When
goods (works, services) are sold under a contract of commission (agency) by the taxpayer-customer (principal), the
date of receipt of the sales income shall be the sate of selling property (property rights) belonging to the customer,
specified in the commissioner’s (agent’s) notification on the sales and (or) in the commissioner’s (agent’s) report (the
clause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall
apply to relations arising from 1 January 2002, - see the previous wording);

  4. For non-sales incomes, the date of receipt of the income shall be:

   1) date of signing the deed of acceptance of property (works, services) - for incomes (the clause is in the wording
enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising
from 1 January 2002, - see the previous wording);

  the paragraph has been excluded from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect
shall apply to relations arising from 1 January 2002, - see the previous wording);

  in the form of property (works, services) received on a gratuitous basis;

  for other similar incomes;

  2) date of arrival of pecuniary funds at the settlement account (cash desk) of the taxpayer - for incomes:

  in the form of dividends from share participation in the activity of other organizations;

  in the form of pecuniary funds gained on a gratuitous basis;

  in the form of returned sums of fees previously paid by organizations, which were included within expenditures;

  in the form of other similar incomes;
  (The subclause has been added from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall
apply to relations arising from 1 January 2002)
  ___________________________________________________________________
  Subclause 2 of the previous wording shall be subclause 3 of the present wording from 1 July 2002 - Federal act No
57-FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
  ___________________________________________________________________

   3) the date of carrying out settlements on terms of contracts made or presenting documents to the taxpayer being
the basis for making settlements, or the mast day of the accounting (tax) period - for incomes:

  from giving property in rent;

  in the form of license payments (including royalty) for use of objects of intellectual ownership;

   in the form of other similar incomes;
   (The subclause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the
effect shall apply to relations arising from 1 January 2002, - see the previous wording)
   ___________________________________________________________________
   Subclause 3 of the previous wording shall be subclause 4 of the present wording from 1 July 2002 - Federal act No
57-FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
   ___________________________________________________________________

   4) the date of being recognized as a debtor, or the date of enforcement of the verdict of the court - for incomes in
the form of fines, penalties and (or) other sanctions for infringement of contract obligations or liabilities, as well as in
the form of sums of reimbursement of losses (damage) (the subclause is in the wording enforced from 1 July 2002 by
the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the
previous wording)
   ___________________________________________________________________
  Subclause 4 of the previous wording shall be subclause 5 of the present wording from 1 July 2002 - Federal act No
57-FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
  ___________________________________________________________________

  5) the last day of the accounting (tax) period - for incomes:

  in the form of renovated reserves and other similar incomes;

  in the form of income distributed in favour of the taxpayer, when participating in simple partnership;

  for incomes from trust management of property;

  for other similar incomes;
  ___________________________________________________________________
  Subclause 5 of the previous wording shall be subclause 6 of the present wording from 1 July 2002 - Federal act No
57-FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
  ___________________________________________________________________

   6) date of revealing incomes (receiving and (or) finding out documents confirming the availability of incomes) - for
incomes of previous years;
   ___________________________________________________________________
   Subclause 6 of the previous wording shall be subclause 7 of the present wording from 1 July 2002 - Federal act No
57-FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
   ___________________________________________________________________

   7) the date of delegation of the right of ownership for foreign currency and precious metals, when performing
operations with foreign currency and precious metals, as well as the last day of the current month - for incomes in the
form of positive rate difference for property and liabilities (obligations) whose cost is expressed in foreign currency,
and positive revaluation of the cost of precious metals (the subclause is in the wording enforced from 1 July 2002 by
the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the
previous wording);

  7) the subclause has been excluded from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect
shall apply to relations arising from 1 January 2002, - see the previous wording)

   8) the date of making the deed of liquidation of depreciated property executed according to the accounting
requirements - for incomes in the form of materials or other property obtained in liquidation of depreciated property put
out of operation;

   9) the date when the recipient of property (including pecuniary funds) has actually used this property (including the
pecuniary funds) without target orientation or violated the terms on which they were granted - for incomes in the form
of property (including pecuniary funds), specified in clauses 14, 15 of article 250 of this Code (the subclause is in the
wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations
arising from 1 January 2002, - see the previous wording);

   10) date of delegation of the right of ownership for foreign currency for incomes from sales (purchase) of foreign
currency (the subclause has been added from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect
shall apply to relations arising from 1 January 2002).

   5. When the fiscal agent sells financing services against concession of pecuniary liabilities, as well as a new
creditor who received this liability sells fiscal services, the date of receiving the income shall be determined as the
date of subsequent concession of this liability or execution of this liability by the debtor. When the taxpayer - seller of
goods (works, services) makes a concession of the claim the debt to the third party, the date of receipt of the
concession of the claim shall be determined as the date of signing the deed of concession of the claim by the sides
(the clause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect
shall apply to relations arising from 1 January 2002, - see the previous wording).

   6. Under loan contracts and other similar contracts (other liabilities including securities) whose validity period is
more than one accounting period, for purposes of this chapter, income shall be considered received and included
within the corresponding incomes as of the end of the corresponding accounting period.
   In the case of termination of the effect of the contract (repayment of the liability) before expiration of the accounting
period, income shall be considered received and included within the corresponding incomes as of the date of
termination of the effect of the contract (repayment of the liability).
   (The clause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect
shall apply to relations arising from 1 January 2002, - see the previous wording)

  7. The sum difference shall be considered income:

   1) those of the taxpayer-seller - as of the date of repayment of debtors for sold goods (works, services), property
rights, and in the case of preliminary payment - as of the date of selling goods (works, services), property rights;

   2) those of the taxpayer-buyer - as of the date of repayment of creditors for the acquired goods (works, services),
property, property or other rights, and in the case of preliminary payment - as of the date of acquiring goods (works,
services), property, property or other rights.
   (The clause has been added from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall
apply to relations arising from 1 January 2002)
   ___________________________________________________________________
   Clause 7 of the previous wording shall be clause 8 of the present wording from 1 July 2002 - Federal act No 57-FZ
of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
   ___________________________________________________________________

   8. Incomes expressed in foreign currency shall, for taxation purposes, be recalculated in rubles at the official rate
established by the RF Central Bank as of the date of acknowledgement of this income. Obligations and liabilities
expressed in foreign currency, property in the form of currency values shall be recalculated in rubles at the official rate
established by the RF Central Bank as of the date of transfer of the right of ownership on operations with the specified
property, termination (execution) of the obligations and liabilities and (or) as of the last day of the accounting (tax)
period depending on what happened earlier (the clause is in the wording enforced from 1 July 2002 by the Federal act
No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous
wording)




         Article 272. Procedure for acknowledging expenses at the charging method
   1. Expenses taken for taxation purposes with the account of the provisions of this chapter shall be considered as
such in the accounting (tax) period they refer to, regardless of the time of actual payment of pecuniary funds and (or)
another form of payment thereof, and shall be determined with the account of the provisions of articles 318-320 of this
Code (the paragraph is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the
effect shall apply to relations arising from 1 January 2002, - see the previous wording).

   Expenses shall be acknowledged in the accounting (tax) period when these expenses appear on the basis of terms
of the deals. If the deal does not contain such provisions and connection between incomes and expenses can not be
determined precisely or is determined by an indirect way, expenses shall be distributed by the taxpayer independently
(the paragraph is in the wording enforced from 1 January 2003 by the Federal act No 191-FZ of 31 December 2002;
the effect shall apply to relations arising from 1 January 2002; is supplemented from 1 January 2006 by the Federal
act N 58-FZ of 6 June 2005, - see the previous wording).

   If contract terms provide receiving incomes during more than one accounting period and do not provide stage by
stage delivery of goods (works, services), expenses shall be distributed by the taxpayer independently with the
account of the principle of uniform acknowledgement of incomes and expenditures (the paragraph is in the wording
enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising
from 1 January 2002, - see the previous wording).

   Taxpayer’s expenses, which may not be directly referred to costs concerning some certain type of activity shall be
distributed proportionately to the share of the corresponding income in the total volume of all the taxpayer’s incomes;

  2. The date of making material expenses shall be:

   The date of transfer of taw materials and materials to production - in the part of raw materials referring to
production goods (works, services);

  Date of signing by the taxpayer of the deed of acceptance of services (works) - for production services (works).
   3. Depreciation shall be considered expense monthly on the basis of the sum of charged depreciation calculated
according to the procedure established by articles 259 and 322 of this Code (the clause is in the wording enforced
from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1
January 2002, - see the previous wording).

   Expenses as capital investments, stipulated by clause 1_1 of article 259 of the present Code shall be admitted as
expenses of that accounting (tax) period on which is the date started of depreciation (date of change of the initial cost)
of fixed assets concerning which capital investments have been performed according to the present chapter (the
paragraph has been added since 1 January 2006 by the Federal act N 58-FZ of 6 June 2005).

  4. Costs of remuneration of labour shall be considered expenses monthly on the basis of the sum of costs of
remuneration of labour charged according to article 255 of this Code.

  5. Costs of repair of fixed assets shall be considered expenses in the same accounting period when they were
made, regardless of payment thereof, with the account of peculiarities provided by article 260 of this Code.

   6. Costs of obligatory and voluntary insurance (non-governmental pension security) shall be considered expenses
in the same accounting (tax) period, when pecuniary funds for payment of insurance (pension) fees were transferred
by the taxpayer (given out from the cash-desk) in accordance with the contract terms. If the terms of insurance
contract (non-governmental pension security) provide lump sum payment of the insurance (pension) fee, then, under
contracts made for more than one accounting period, expenses shall be acknowledged uniformly during the validity
period of the contract proportionally to quantity of calendar days of the contract’s effect in the accounting period (the
clause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall
apply to relations arising from 1 January 2002; is supplemented from 1 January 2006 by the Federal act N 58-FZ of 6
June 2005, the effect shall apply to relations arising from 1 January 2005, - see the previous wording).

   7. Unless otherwise provided by articles 261, 262, 266 and 267 of this Code, the date of making non-sales and
other incomes shall be:

   1) date of charging taxes (fees) - for expenses in the form of sums of taxes (advance payments of taxes), fees and
other obligatory payments (the subclause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of
29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording);

  2) charging date in accordance with the requirements of this chapter - for expenses in the form of sums of
deductions to reserves, considered expenses according to this chapter (the subclause has been added from 1 July
2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002);
  ___________________________________________________________________
  Subclause 2 of the previous wording shall be subclause 3 of the present wording from 1 July 2002 - Federal act No
57-FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
  ___________________________________________________________________

  3) settlement date according to terms of contracts made, or the date of presenting documents being the basis for
making settlements to the taxpayer, or the last day of the accounting (tax) period - for expenditures:

  in the form of commission fees;

  in the form of expenses for payments to other organizations for performed works (provided services);

  in the form of leasing payments for rented (taken to leasing) property;

   in the form of other similar expenses;
   (The subclause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the
effect shall apply to relations arising from 1 January 2002, - see the previous wording)
   ___________________________________________________________________
   Subclause 3 of the previous wording shall be subclause 4 of the present wording from 1 July 2002 - Federal act No
57-FZ of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
   ___________________________________________________________________

    4) date of remittance of pecuniary funds from the settlement account (payment from the cash-desk) of the taxpayer
- for expenses:
  in the form of paid resettlement allowances;

   in the form of compensation for use of personal cars and motorcycles for official purposes (the paragraph has been
added from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising
from 1 January 2002, - see the previous wording)
   ___________________________________________________________________
   Clause 4 of the previous wording shall be clause 5 of the present wording from 1 July 2002 - Federal act No 57-FZ
of 29 January 2002. The effect shall apply to relations arising from 1 January 2002.
   ___________________________________________________________________

  5) date of approval of the prepayment report - for expenses:

  for business trips;

  for maintenance of official transport;

  for representative expenses;

   for other similar expenses;
   (The subclause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the
effect shall apply to relations arising from 1 January 2002, - see the previous wording)

  5) The subclause has been excluded from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect
shall apply to relations arising from 1 January 2002, - see the previous wording;

   6) date of transfer of the right of ownership for foreign currency and precious metals referring to operations with
foreign currency and precious metals, as well as the last date of the current month - for expenses in the form of the
negative - rate difference for property and liabilities (obligations) whose cost is expressed in foreign currency and
negative revaluation of the cost of precious metals (the subclause is in the wording enforced from 1 July 2002 by the
Federal act No 57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the
previous wording);

   7) date of sale or other withdrawal of securities - for expenses connected with acquisition of securities, including
the cost thereof;

   8) the date of recognition as debtor or the date of enforcement of the verdict of the court - for expenses in the form
of fines, penalties and (or) sanctions) for infringement of contract obligations or liabilities, as well as in the form of
compensation for losses (damage) (the subclause is in the wording enforced from 1 July 2002 by the Federal act No
57-FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002, - see the previous wording);

   9) date of transfer of the right of ownership for foreign currency - for expenses from sale (purchase) of foreign
currency (the subclause has been added from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect
shall apply to relations arising from 1 January 2002).

  10) date of selling shares, stakes - under expenses as cost for purchase of shares, stakes (the subclause has been
added since 1 January 2006 by the Federal act N 58-FZ of 6 June 2005).

   8. Under loan contracts and other similar contracts (other liabilities including securities) whose validity period is
more than one accounting period, for purposes of this chapter, expense shall be considered made and shall be
included within certain expenses as of the end of the corresponding accounting period.

   In the case of termination of the effect of the contract (repayment of liabilities) before expiration of the accounting
period, the expense shall be considered made and included within the corresponding expenses as of the date of
termination of the effect of the contract (repayment of the liabilities).
   (The clause is in the wording enforced from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect
shall apply to relations arising from 1 January 2002, - see the previous wording)

   8_1) Expenses for purchase of the property transferred to leasing, specified in subclause 10 of clause 1 of article
264 of the present Code shall be admitted as a cost of those accounting (tax) periods in which the rent (leasing)
payments are stipulated according to treaty provisions. Thus the specified expenses shall be registered in the sum
proportional to the sum of the rent (leasing) payments (the subclause has been added since 1 January 2006 by the
Federal act N 58-FZ of 6 June 2005).
  9. The sum difference shall be considered expense:

  For the taxpayer-seller - as of the date of repayment of debtors for sold goods (works, services), property rights,
and in the case of preliminary payment - as of the date of selling (goods, services), property rights;

   For taxpayer-buyer - as of the date of repayment of creditors for the acquired goods (works, services), property,
property or other rights, and in the case of preliminary payment - as of the date of acquisition of (goods, services),
property or other rights.
   (The clause has been added from 1 July 2002 by the Federal act No 57-FZ of 29 January 2002; the effect shall
apply to relations arising from 1 January 2002)

   10. For taxation purposes, expenses expressed in foreign currency shall be recalculated in rubles at the official rate
established by the RF Central Bank as of the date of acknowledgement of this expense. Obligations and liabilities
expressed in foreign currency, property in the form of currency values shall be recalculated in rubles at the official rate
established by the RF Central Bank as of the date of transfer of the right of ownership in performing operations with
this property, termination (execution) of obligations and liabilities and (or) as of the last date of the accounting (tax)
period depending on what happened earlier (the clause has been added from 1 July 2002 by the Federal act No 57-
FZ of 29 January 2002; the effect shall apply to relations arising from 1 January 2002).



                         Article 273. Cash estimate of incomes and expenses
   1. Companies (except for banks) have the right to estimate their income (expenses incurred) by cash method,
provided that an average quarterly amount of proceeds from sale of goods (works, services) of these companies’ for
last four months less value added tax have not exceeded one million Roubles (the Clause is added since 1 July 2002
according to Federal Law No. 57-FZ of 29 May 2002; shall extend to relations arisen since 1 January 2002, in the
wording effective since 1 January 2004 according to the Federal Law No. 117-FZ of 7 July 2003, - see the previous
wording).

   2. With a view of this Chapter, the day of entering means to the banking accounts and (or) cash department,
receipts of other property (works, services) and (or) property rights, and also other ways of redeeming the debts to the
tax payer (cash method) shall be considered by the receipt date of income (the Clause is supplemented since 1 July
of 2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to relations arisen since 1 January
2002, in the wording effective since 1 January 2004 according to the Federal Law No. 117-FZ of 7 July 2003, - see the
previous wording).

   3. The costs being actually paid shall be considered by the tax payers’ expenses. With a view of this Chapter, the
termination of a counter obligation of the tax payer - purchaser of the specified goods (works, services) and property
rights to the seller, which is directly related to delivery of these goods (performance of works, rendering services,
assignment of property rights), shall be considered by payment of good (works, services and (or) property rights).

  Thus, expenses shall be recorded in the structure of expenses in view of the following features:

   1) Material expenses, and also expenses on labor remuneration shall be recorded in the structure of expenses at
the moment of debts’ offset by writing off money resources from the tax payer’s settlement account, payment from
cash department, but at any other way of debts’ offset - at the moment of such an offset. The similar procedure shall
apply to the payment of interests for using of borrowed means (including bank credits) and at payment of third parties’
services. Thus, raw material and materials costs shall be recorded in the structure of expenses by writing off this raw
material and materials into production (the Subclause has been supplemented since 1 July 2002 by the Federal Law
No. 57-FZ of 29 May 2002, shall extend to the relations arisen since 1 January 2002, - see the previous wording);

   2) Amortization shall be recorded in the structure of expenses in the amounts calculated for the reporting (tax)
period. Thus, the amortization shall be only allowed of the depreciated property paid by the tax payer and used in
production. The similar procedure shall apply to capitalized expenses, stipulated by Articles 261, 262 of this Code (the
subclause is in the wording effective since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall
extend to the relations arisen since 1 January 2002, - see the previous wording);

  3) The costs of taxes and duties shall be recorded in the structure of expenses at a rate actually paid by the tax
payer. At availability of debts on payment of taxes and duties, expenses for debts’ offset shall be recorded in the
structure of the expenses within the limits of actually repaid debts and in those accounting (tax) periods, when the tax
payer repaid the specified debts.

   4. If the tax payer, who has passed to cash estimate of incomes and expenses, has exceeded during taxation
period the limiting amount of proceeds from realization of goods (works, services), established by Clause 1 of this
Article, he will be obliged to proceed to determination of incomes and expenses by the method of charge since the
beginning of the taxation period, during which such an excess has been committed.

  In case of conclusion of the contract on confidential management of property or the contracts of simple company
participants of the specified contracts determining incomes and expenses on a cash method are obliged to proceed to
determination of incomes and expenses by the method of charge since the beginning of the taxation period during
which such contract has been concluded (the paragraph has been added since 1 January 2006 by the Federal act N
58-FZ of 6 June 2005).

   5. The tax payers determining incomes and expenses according to this Article, shall not record a difference in the
amounts in the structure of incomes and expenses with the taxation purposes in the case the obligation is expressed
in conditional monetary units under the bargain’s terms and conditions (the clause has been added since 1 July 2002
by the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January 2002).



                                        Article 274. Assessment basis
  1. For the purposes of this Chapter, the taxable profit in money terms, determined according to Article 247 of this
Code, shall be deemed by the assessment basis *274)

   2. A tax payer shall individually determine the assessment basis of the taxable profit at a rate distinct from the one
specified in Clause 1 of Article 248 of this Code. A tax payer shall keep separate records of income (expenses) for the
transactions, which income and expenses should be recorded according to this Chapter in the procedure other than
general one (the clause is in the wording effective since 1 July 2002 according to the Federal Law No. 57-FZ of 29
May 2002; shall extend to the relations arisen since 1 January 2002, - see the previous wording);

  3. With a view of this Chapter, incomes and expenses of the tax payer shall be recorded in money terms.

  4. The incomes in kind received from sale of goods (works, services), property rights (including barter operation),
shall be recorded proceeding from the price of bargain with the provisions of Article 40 of this Code taken into
account, unless otherwise stipulated by this Code (the Clause has been supplemented since 1 July 2002 by the
Federal Law No. 57-FZ of 29 May 2002, shall extend to the relations arisen since 1 January 2002, - see the previous
wording);

   5. Off-sale incomes in kind received shall be recorded at definition of assessment basis proceeding from the price
of the bargain in view of the provisions stated in Article 40 of this Code, unless otherwise stipulated by this Chapter.

   6. For the purposes of this Article, market prices shall be fixed in the procedure established for market prices
definition by Subparagraph 2, Clause 3, and by Clauses 4 -11 of Article 40 of this Code, as of the date of sale or off-
sale transactions (less value added tax, excise) (the Clause is in the wording effective since 1 January 2004 according
to the Federal Law No.117-FZ of 7 July 2003, - see the previous wording).

  7. For calculation of the taxation base the taxable profit shall be determined by a progressive total from the
beginning of the taxation period.

   8. If during the accounting (tax) period, a tax payer has suffered loss - a negative difference between the incomes
determined according to this Chapter, and the expenses recorded for the taxation purposes in the procedure,
stipulated by this Chapter, the taxation base for this accounting (tax) period shall be taken equal to zero (the
Subparagraph is in the wording effective since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002;
shall extend to the relations arisen since 1 January 2002, - see the previous wording);

  The losses, suffered by the tax payer during the accounting (tax) period, shall be recorded for the taxation
purposes in the procedure and under conditions, established by Article 283 of this Code.

   9. The incomes and the expenses, resulted from gambling business, shall not be recorded in the structure of
incomes and expenses of tax payers for calculation of the taxation base.
  The tax payers being gambling enterprises, and those deriving incomes of the activity pertaining to gambling
business, shall be obliged to keep separate account of incomes and expenses from such an activity.

   Thus, expenses of enterprises engaged in gambling business, for impossibility to divide them, shall be determined
proportionally to the share of incomes gained from the activity pertaining to gambling business in the aggregate profit
gained by the enterprise from all kinds of activity.

  The similar procedure shall apply to the enterprises, passed to tax payment of imputed earnings, and also to the
enterprises gaining a profit (suffered loss) from agricultural activity (the Subparagraph has been added since 1 July
2002 by the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January 2002).

  10. The tax payers using special tax treatment, according to this Code, shall not record the incomes and expenses
pertaining to such treatments for calculation of the assessment basis.

   11. Features of the assessment basis calculation for banks shall be established in view of the provisions, stipulated
by Articles 290-292 of this Code.

   12. Features of the assessment basis calculation for insurers shall be established in view of the provisions,
stipulated by Articles 293 and 294 of this Code.

   13. Features of the assessment basis calculation for private pension funds shall be established in view of the
provisions, stipulated by Articles 295 and 296 of this Code.

   14. Features of the assessment basis calculation for professional participants of the securities market shall be
established in view of the provisions, stipulated by Articles 298 and 299 of this Code.

   15. Features of the assessment basis calculation for transactions with securities shall be established by Article 280
in view of the provisions, stipulated by Articles 281 and 282 of this Code.

  16. Features of the assessment basis calculation for operations with financial instruments of bargains on term shall
be established in view of the provisions stipulated by Articles 301-305 of this Code.




                     Article 275. Features of definition of the assessment basis
                    of an income gained from share holding in other enterprises

   The amount of tax on the income gained from share holding in other enterprises (on the purposes of this Chapter -
dividends) shall be determined in view of the following provisions.

   1. If a foreign enterprise is a source of the tax payer’s income, the latter shall independently calculate the amount of
tax on received dividends, proceeding from the amount of same and from the rate stipulated by Subclause 2, Clause
3, Article 284 of this Code.

   Thus, the tax payers receiving dividends from the foreign enterprise, in particular, through the foreign enterprise’s
permanent representative in the Russian Federation, have no right to reduce the amount of tax, estimated according
to this Chapter, by the one, estimated and paid on a site of a source of income, unless otherwise stipulated by
international agreement.

   2. For the taxpayers other than specified in Clause 3 of this Article receiving the income as dividends, except for
those specified in Clause 1 of this Article, a tax agent shall determine the assessment basis of the incomes received
from share holding in other enterprises in view of the features established by this Clause (the paragraph has been
added since 1 July 2002 by the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1
January 2002).

   If a source of the tax payer’s income is Russian enterprise, the latter shall be deemed by the tax agent to determine
the amount of tax in view of the provisions of this Clause (the Subparagraph is in the wording effective since 1 July
2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January
2002, - see the previous wording).
   Thus, the amount of tax subject to deduction from incomes of the tax payer - recipient of dividends, is estimated by
the tax agent proceeding from the total estimate tax in the procedure, established by this Clause, and from the tax
payer’s share in a total of dividends.

   The total of tax is determined as a product of the tax rate, established by Subclause 1, Clause 3, Article 284 of this
Code, and the difference between an amount of dividends subject to distribution among shareholders (participants)
within current taxation period, reduced by the amounts of dividends to be paid by the tax agent within current taxation
period, and amount of dividends received by the agent within current reporting (taxation) period and the previous one,
provided that these amounts of dividends have not earlier participated in calculation of taxable income in the form of
dividends. In case the negative difference has been obtained, the duty of tax payment shall not arise and
reimbursement from budget shall not be fulfilled (the paragraph is in the wording effective since 1 July 2002 according
to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January 2002, - see the
previous wording).

   The paragraph has been excluded since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall
extend to the relations arisen since 1 January 2002. - See the previous wording.

   3. In case the Russian company - tax agent pays dividends to the foreign company and (or) to the natural person-
non-resident of the Russian Federation, the tax payer-recipient of dividends shall estimate the assessment basis of
each the payment as the amount of paid dividends, and apply the rate established accordingly Subclause 2, Clause 3
or by Clause 3 of Article 224 of this Code (the Clause is in the wording effective since 1 July 2002 according to the
Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January 2002, - see the previous
wording).




                  Article 275(1). Features of calculation of the assessment basis
                 for the tax payers using objects of servicing works and facilities

   The tax payers incorporating divisions involved with activity, related to using objects of servicing works and
facilities, shall estimate the assessment basis of the specified activity separately from the assessment basis for other
types of activity (the part is in the wording enforced from 1 January 2006 by the Federal act N 58-FZ of 6 June 2005, -
see the previous wording).

   For the purposes of this Chapter, an auxiliary farm, housing and communal facilities, objects of welfare sphere,
teaching and course centers and other similar facilities, industries and others rendering services to their staff as like
as outside persons, shall be referred to selling goods, works and services (the paragraph is supplemented from 1
January 2006 by the Federal act N 58-FZ of 6 June 2005, - see the previous wording).

   Inhabited fund, hotels (except for tourist), houses and hostels for visitors, objects of an external accomplishment,
artificial constructions, swimming-pools, constructions and the equipment of beaches, and also objects of gas-heating
and electricity supply of the population, sites, workshops, bases, plant shops, garages, special machines and
mechanisms, the warehouse premises intended for maintenance service and repair of objects of housing and
communal services of welfare sphere, physical culture and sports shall be referred to objects of housing and
communal services.

   Objects of public health services, culture, children’s preschool objects, children’s camp of rest, sanatoria
(dispensaries), bases of rest, boarding houses, objects of physical culture and sports (including tracks, hippodromes,
stables, tennis courts, golf grounds, badminton grounds, the improving centres), objects of public non-productive
consumer services (bath, sauna) shall be referred to objects of social and cultural sphere.

   In case the division of the tax payer has suffered loss from the activity related to using the objects specified in this
Article, such a loss shall be recognized for the taxation purposes subject to meeting the following requirements (the
paragraph is in the wording enforced from 1 January 2006 by the Federal act N 58-FZ of 6 June 2005, - see the
previous wording):

   If cost of the goods, works, services sold by the tax payer, involved with the activity related to using objects
specified in this Article, corresponds to the cost of similar services rendered by the specialized enterprises involved
with similar activity related to using such objects (the paragraph is in the wording enforced from 1 January 2006 by the
Federal act N 58-FZ of 6 June 2005, - see the previous wording);
   If maintenance costs of objects of housing and communal services, objects of welfare sphere, and also an auxiliary
farm and other similar facilities, industries and services do not exceed regular costs of similar objects service rendered
by the specialized companies mainly practicing this activity;

  If conditions of rendering tax payer’s services do not differ essentially from the conditions of rendering services,
performance of works of the specialized companies mainly practicing this activity (the paragraph is in the wording
enforced from 1 January 2006 by the Federal act N 58-FZ of 6 June 2005, - see the previous wording).

   If one at least of the specified requirements shall not be met, the tax payer has the right to postpone the loss
suffered by the tax payer from the activity related to using servicing works and facilities objects, for maximum ten
years period and to use for its repayment only the profit received from the specified types of activity.

   The tax payers-town-forming companies under legislation of the Russian Federation, incorporating structural
divisions for operation of available housing objects, and also the objects specified in third and fourth Subparagraphs of
this Article, have the right to accept for the taxation purposes actually incurred maintenance costs of the specified
objects. The specified costs shall be accepted for the taxation purposes within the limits of standard maintenance of
similar facilities, industries and services approved by local self-government bodies of the tax payer. If such standards
have not been approved by local self-government bodies, tax payers have the right to apply a procedure of calculation
of the maintenance costs for these objects, effective for similar objects situated in the given territory and subordinated
to the specified bodies. In case the above-stated objects are situated on the municipal territory other than directing
agency, the standard shall apply, which have been approved by self-government bodies local to these objects.

    If the division of the tax payer receives the loss when performing activity connected to use of the objects specified
in the present article, and on the territory of municipal institution at the place of location of the tax payer there are no
specialized organizations performing similar activity, connected with use of such objects, for the purposes of taxation
the actually made expenses for maintenance of the specified objects are accepted within the limits of the
specifications confirmed by executive authorities of components of the Russian Federation at the place of location of
the tax payer (the paragraph has been added since 1 January 2006 by the Federal act N 58-FZ of 6 June 2005).

   In cities of federal value - Moscow and Saint Petersburg the specifications shall be approved by the executive
authorities of the specified components of the Russian Federation (the paragraph has been added since 1 January
2006 by the Federal act N 58-FZ of 6 June 2005).
   (The Article has been added since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall
extend to the relations arisen since 1 January 2002).




       Article 276. Features of calculation of the assessment basis of the participants
                    Of the Contracts for trust management of the property
  1. Calculation of the assessment basis of participants of the contract of trust management by property is carried
out:

  According to Clause 3 of this Article in case the specified contract stipulates the founder of management to be a
beneficiary;

   According to Clause 4 of this Article in case the specified contract stipulates the founder of management not to be
a beneficiary.

   2. For the purposes of this Chapter, the property (including property rights), handed over under the contract of trust
management, shall not be considered as the trust manager income. The compensation received by the trust manager
within term of validity of the trust management contract, shall be his income from sale to be taxable in the established
procedure. Thus, the expenses related to exercising of trust management, shall be considered by expenses of the
trust manager, if the contract of trust management does not stipulate the founder of trust management to compensate
for the expenses specified.

   The trust manager is obliged to determine monthly by the progressive total the financial result incomes and
expenses of trust management of the property and to provide the founder of management (beneficiary) with the data
on received incomes and expenses for registration thereof by founder of management (beneficiary) when determining
the taxable base according to the present chapter. In case of trust management of securities the trust manager shall
determine incomes and expenses in the procedure stipulated by article 280 of the present Code (the paragraph is in
the wording enforced from 1 January 2006 by the Federal act N 58-FZ of 6 June 2005, - see the previous wording).
   3. Incomes of the founder of trust management under the contract of trust management shall be included in the
structure of his income or off-sale incomes depending on the received type of income (the paragraph is supplemented
from 1 January 2006 by the Federal act N 58-FZ of 6 June 2005, - see the previous wording).

   The expenses related to fulfillment of the trust management contract (including amortization of property, and also
compensation for trust manager), shall be considered as expenses connected to manufacture and off-sale expenses
of the founder of management depending on the received type of income (the paragraph is supplemented from 1
January 2006 by the Federal act N 58-FZ of 6 June 2005, - see the previous wording).

   4. Beneficiary’s incomes under the contract of trust management shall be incorporated in the structure of his off-
sale incomes and are taxable in the established procedure.

   Thus, the expenses relevant to fulfillment of the contract for trust management (except for trust manager
compensation in case the specified contract stipulates payment of compensation not due to reduction of the incomes
received from performance of this contract), shall not be taken into account by the founder of management at
definition of the assessment basis, but taken into account for the taxation purposes in the structure of beneficiary’s
expenses.

  The losses suffered during validity of such a contract from using the property handed over to trust management,
shall not be considered as the founder’s (beneficiary’s) losses to be recorded for taxation purposes, according to this
Chapter (the paragraph is in the wording enforced from 1 January 2006 by the Federal act N 58-FZ of 6 June 2005, -
see the previous wording).

   5. Upon cancellation of the contract for trust management, the property (including property rights), handed over in
trust management, under terms and conditions of the specified contract, may be either returned to the founder of
management, or handed over to another person.

   Upon restitution of the property, no income (loss) shall form at the founder of management irrespectively a positive
(negative) difference arisen between the cost of the property handed over to the trust management as of the date of
coming into force and the date of cancellation of the contract for trust management of the property.

  6. Provisions of this Article (except for those of first Subparagraph, Clause 2 of this Article) shall not extend to
managerial company and participants (founders) to the contract of trust management of the property making a
detached property complex - unit investment trust.
  (The Article is in the wording effective since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002;
shall extend to the relations arisen since 1 January 2002, - see the previous wording).



                 Article 277. Features of calculation of the assessment basis
                          On the incomes received upon assignation
        of the property to the authorized (warehoused) capital (fund, fund’s property)
                         (the title of Article is stated in the wording effective since 1 July 2002
                                according to the Federal Law No. 57-FZ of 29 May 2002;
                                shall extend to the relations arisen since 1 January 2002;
                                    is in the wording enforced since 8 November 2004
                                     by the Federal act N 124-FZ on 4 October 2004,
                            shall extend to legal relationships arising from 1 January 2003, -
                                                   see the previous wording)

  1. Upon flotation of issued stocks (shares), the incomes and expenses of the tax payer - emitter, and the incomes
and expenses of the tax payer-purchaser of such stocks (shares) (further in this Article - stockholder (participant,
shareholder) shall be assessed in view of the following features :

  1) the tax payer - issuer does not have profit (loss) in case of reception of the property (property rights) as a
payment for stocks (shares, stakes) placed thereby (the subclause is in the wording effective since 14 July 2005
according to the Federal act N 58-FZ of 6 June 2005; the effect shall apply to the relations arisen since 1 January
2005, - see the previous wording).

   2) the tax payer - issuer does not have profit (loss) in case of transfer of the property (property rights) as a payment
for stocks (shares, stakes) placed thereby (the subclause is in the wording effective since 14 July 2005 according to
the Federal act N 58-FZ of 6 June 2005; the effect shall apply to the relations arisen since 1 January 2005, - see the
previous wording).

   Thus, the cost of purchased stocks (shares) for the purposes of this Chapter shall be considered equal to the cost
(residual cost) of the brought property (property rights or non-property rights having a pecuniary estimation
(hereinafter in the present article - the property rights), being assessed according to the tax records as of the date of
assignment of the right to the specified property (property rights), in view of additional expenses which for the taxation
purposes shall be assigned to the handing over party upon such entering (the paragraph is in the wording effective
since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1
January 2002; is supplemented since 14 July 2005 according to the Federal act N 58-FZ of 6 June 2005; the effect
shall apply to the relations arisen since 1 January 2005, - see the previous wording).

   Thus the property (property rights) obtained as a payment (contribution) in authorized capital of the organization,
for the purposes of taxation of the income is accepted at the cost (residual cost) received as a payment (contribution)
in authorized capital of property (property rights). The cost (residual cost) is determined under the data according to
the taxation account at the transmitting party for the date of transfer of the property right to the specified property
(property rights) in view of additional expenses which in case of such entering (contribution) shall be performed by the
transmitting party provided that the above-said expenses are determined as a payment (contribution) in authorized
capital. If the receiving party cannot documentary confirm cost of the brought property (property rights) or its any part
than the cost of this property (property rights) or its parts shall be considered equal to zero (the paragraph has been
added since 14 July 2005 according to the Federal act N 58-FZ of 6 June 2005; the effect shall apply to the relations
arisen since 1 January 2005).

   In case of entering (contribution) of property (property rights) by natural persons and foreign organizations the
documentary confirmed expenses on purchase (creation) thereof shall be considered as its cost (residual cost) with
account of depreciation (deterioration) charged with a view of taxation of the profit (income) in the state which tax
resident is the transmitting party, but is not higher than the market cost of this property (property rights) confirmed with
the independent appraiser, operating in accordance with the legislation of the specified state (the paragraph has been
added since 14 July 2005 according to the Federal act N 58-FZ of 6 June 2005; the effect shall apply to the relations
arisen since 1 January 2005).

   Cost of the property (property rights) obtained by way of privatization of the state or municipal property as a
contribution in authorized capital of the organizations, shall be considered at the cost (residual cost), determined for
the privatization date by rules of accounting for the purposes of the present chapter (the paragraph has been added
since 14 July 2005 according to the Federal act N 58-FZ of 6 June 2005; the effect shall apply to the relations arisen
since 1 January 2005).

   2. Upon dissolution of the company and distribution of the property of the company to be dissolved, incomes of the
tax payers-stockholders (participants, shareholders) of the company to be dissolved shall be assessed proceeding
from the market price of the property (property rights) received by them at the moment of receipt of this property less
cost of stocks (shares) actually paid (irrespectively form of payment) by the appropriate stockholders (participants,
shareholders) of this company (the Clause has been supplemented since 1 July 2002 according to the Federal Law
No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January 2002, - see the previous wording).

   3. Upon company’s reorganization, irrespectively form of reorganization, tax payers - stockholders (participants,
shareholders) shall not get the profit (loss) to be taken into account with a view of taxation (the Subparagraph is in the
wording effective since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the
relations arisen since 1 January 2002, - see the previous wording).

   4. In case of reorganization in the form of merge, adjoining and transformation, providing converting of stocks of the
reorganized organization in stocks of the created organizations or in stocks of the organization to which adjoining is
carried out, the cost received by stockholders of the reorganized organization of stocks of the created organizations or
the organizations to which adjoining is carried out, shall be considered equal to the cost of converted stocks of the
reorganized organization according to the tax account of stockholder for the date of end of reorganization (for the date
of entering record into the unified state register of legal entities on termination of activity of each adjoined legal entity -
in case of reorganization in the form of adjoining).

   In the similar procedure estimation of the cost of shares (stakes), received as a result of exchange shares (stakes)
of the reorganized organization is performed.
   (The clause has been added since 14 July 2005 according to the Federal act N 58-FZ of 6 June 2005; the effect
shall apply to the relations arisen since 1 January 2005).
   5. In case of reorganization in the form of allocation, division, providing conversion or distribution of stocks of the
new created organizations among stockholders of the reorganized organization, cumulative cost of the stocks
received by stockholder as a result of reorganization of stocks of each of the created organizations and the
reorganized organization shall be considered equal to the cost of stocks of the reorganized organization belonging to
the stockholder, determined under the data of the tax account of stockholder.

   Cost of stocks of each newly created and reorganized organization, received by the stockholder as a result of
reorganization shall be determined in the following procedure.

   Cost of stocks of each newly created organization shall be considered equal to the part of cost of stocks of the
reorganized organization belonging to stockholder proportional to the relation of cost of net assets of the created
organization to the cost of net assets of the reorganized organization.

   Cost of stocks of the reorganized organization (reorganized after termination of reorganization), belonging to the
stockholder shall be determined as a difference between cost of stocks’ purchase thereby of the reorganized
organization and the cost of stocks of all the newly created organizations belonging to this stockholder.

   Cost of net assets of the reorganized and newly created organizations shall be determined according to dividing
balance for the date of approval thereof by stockholders when due hereunder.

   In the similar procedure estimation of the cost of shares (stakes), obtained as a result of exchange of shares
(stakes) of the reorganized organization is performed.

   In case of reorganization in the form of allocation providing for purchase by the reorganized organization of stocks
(a share, stake) of the allocated organization, the cost of these stocks (a share, stake) shall be considered equal to
the cost of net assets of the allocated organization for the date of its state registration.

   If the cost of net assets of the one or several created (reorganized) with participation of stockholders of the
organizations is negative value, the stocks’ cost of purchase received by stockholder as a result of reorganization of
each created (reorganized) organization shall be considered equal to the part of cost of stocks of the reorganized
organization proportional to the relation of size of the authorized capital of each organization created with participation
of the organizations to size of the authorized capital of the reorganized organization for the last accounting date
belonging to the stockholder, previous to reorganization.
   (The clause has been added since 14 July 2005 according to the Federal act N 58-FZ of 6 June 2005; the effect
shall apply to the relations arisen since 1 January 2005).

   6. Information on net assets of the organizations (reorganized and created) under the data of dividing balance shall
be published by the reorganized organization within 45 days from the date of decision-making on reorganization in the
printed edition intended for publication of the data on state registration of legal entities, and also is granted to tax
payers - stockholders (participants, shareholders) of the reorganized organizations under their letters of enquiry (the
clause has been added since 14 July 2005 according to the Federal act N 58-FZ of 6 June 2005; the effect shall apply
to the relations arisen since 1 January 2005).




                  Article 278. Features of calculation of the assessment basis on
                       the incomes received by participants of a partnership
   1. For the purposes of this Chapter tax payers’ assignment of property (including property rights) as contributions of
the participants of partnerships (further throughout this Article-a partnership) shall not be considered as sale of goods
(works, services). *278)

  2. In case at least one of the participants to the partnership is a Russian company or the natural person being
Russian Federation tax resident, the incomes and expenses of such a company should be recorded for the taxation
purposes by the Russian participant irrespectively of who is entrusted with company’s management under the
contract.

  3. The participant of the partnership carrying out record of profits and expenses of this company for the taxation
purposes, shall be obliged to determine by the progressive total by results of each accounting (tax) period the profit of
each the participant of the partnership proportionally to an appropriate participant’s share, established by the
agreements, in the partnership’s income received for the accounting (tax) period from activity of all the participants of
the partnership. The participant of the partnership in charge of the record of incomes and expenses shall be obliged to
inform quarterly till 15-th date following the accounting (tax) period each the participant of this partnership of the
amounts of incomes due (distributed) to each the participant of the partnership (the clause is in the wording enforced
from 14 July 2005 according to the Federal act N 58-FZ of 6 June 2005; the effect shall apply to the relations arisen
since 1 January 2005, - see the previous wording).

   4. The incomes gained from participation in the partnership shall be included in the structure of the off-sale
incomes of the tax payers - participants of the partnership to be taxable in the procedure established by this Chapter.
Losses of the partnership shall not be distributed between the participants and shall not be taken into account for the
taxation.

  5. The partners while distributing the income, gained from the partnership’s activity upon determination of the
contract of an ordinary partnership, shall not bring earlier recorded (discounted) incomes into line with those actually
derived from distributed income gained from the partnership’s activity.

   6. Upon cancellation of the contract of an ordinary partnership and return of the property to the partners of this
contract, the negative difference between valuation of the returned property and valuation, according to which this
property has been handed over under the contract of an ordinary partnership, shall not be considered by loss for the
taxation purposes.



                Article 279. Features of calculation of the assessment basis upon
                                 concession (assignation) of claim

   1. Upon the tax payer - seller of goods (works, services), calculating incomes (expenses) by accrual concept, has
assigned claim for debt to the third party before approach of the due date of the payment stipulated by the contract for
sale of goods (works, services), the negative difference between the income from sale of claim of the debt and cost of
sold goods (works, services) shall be considered as tax payer’s loss. Thus, the amount of loss for the taxation
purposes may not exceed the amount of interests which the tax payer would pay in view of requirements of Article 269
of this Code according to liability, equal to the income from concession of claim gained for the period from the date of
concession up to the date of payment, stipulated by the contract for sale of goods (works, services). Provisions of this
Clause shall apply also to the tax payer-creditor under a liability (the Clause is in the wording effective since 1 July
2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January
2002, - see the previous wording).

   2. Upon the tax payer-seller of goods (works, services), calculating the incomes (expenses) by accrual concept,
has assigned the claim of the debt to third party after approach of the due payment date stipulated by the contract for
sale of goods (works, services), the negative difference between the income from sale of claim of the debt and cost of
sold goods (works, services) shall be considered by loss under the bargain of concession of the claim to be included
in the structure of the tax-payer’s off-sale expenses. Thus, the loss shall be accepted for taxation in the following
procedure:

   50 percents from the amount of the loss are subject to inclusion in the structure of off-sale expenses as of the date
of concession of claim;

  50 percents from the amount of the loss are subject to inclusion in the structure of off-sale expenses upon
expiration of 45 days since the date of concession of the claim.

   Provisions of this Clause shall also apply to the tax-payer - creditor under the liability (the paragraph has been
added since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen
since 1 January 2002).

   3. Further sale of the claim of the debt by the tax payer, who has bought this claim, shall be considered as
rendering financial services. The income (proceeds) from sale of financial services shall be estimated as cost of the
property due to this tax payer at the subsequent concession of claim or upon termination of the appropriate obligation.
Thus, upon calculation of the assessment basis, the tax payer has the right to reduce the income received from sale
of claim by the amount of expenses on purchase of the specified claim of the debt (the Clause is in the wording
effective since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations
arisen since 1 January 2002, - see the previous wording).
                    Article 280. Features of calculation of the assessment basis
                                    On operations with securities

  1. The order of reference of subjects of civil rights to securities shall be established by civil legislation of the
Russian Federation and foreign applicable legislation.

  The order of reference of the securities to issuing ones shall be established by national legislation.

  If securities’ transaction may be qualified same as the one with financial tools of bargains on term, the tax payer
shall independently choose the taxation procedure of such a bargain.

   2. Incomes, gained by the tax payer from the transactions related to selling or other retirement of securities
(including repayments), shall be estimated proceeding from the price of selling or other retirement of securities, and
also the amount of added interests (coupon) paid by the buyer to the tax payer, and the amount of interest (coupon)
income paid to the tax payer by the promisor (drawer). Thus the income of the tax payer, gained from selling or other
retirement of securities, does not include the amounts of interest yields (coupon), which have been earlier recorded
(discounted) for taxation (the paragraph has been supplemented since 31 August 2002 according to the Federal Law
No. 110-FZ of 24 July 2002; shall extend to the relations arisen since 1 January 2002, - see the previous wording).

   Incomes nominated in a foreign currency of the tax payer from operations on realization or from the other leaving
securities (including from redemption) shall be determined at a rate of the Central bank of the Russian Federation,
effective on the date of transfer of the property right or on the date of redemption (the paragraph has been added from
14 July 2005 according to the Federal act N 58-FZ of 6 June 2005; the effect shall apply to the relations arisen since 1
January 2005).
   ____________________________________________________________________
   The second and third paragraphs of the previous wording shall be considered the third and fourth paragraphs
respectively of this wording since 14 July 2005 - Federal act N 58-FZ of 6 June 2005.
   ____________________________________________________________________

  For retirement (sale, repayment or exchange) of the investment share from the unit investment trust in case the
specified investment share is not circulating in the formal market, the estimated cost of the investment share,
determined in the procedure established by legislation of the Russian Federation on unit investment trusts shall be
considered by the market price (the paragraph has been added since 1 July 2002 according to the Federal Law No.
57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January 2002).

   Expenses for sale (or other retirement) of securities, including investment shares of unit investment trust, shall be
estimated proceeding from the purchase price of a security (including expenses on its purchase), expenses for its
sale, the rate of discounts from estimated cost of investment shares, the amount of added interests (coupon) paid by
the tax payer to the securities’ seller. Thus, the charge shall not include the amount of added interests (coupon),
which have been earlier recorded (discounted) for taxation (the Subparagraph is in the wording effective since 1 July
2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January
2002, - see the previous wording).

   In case of determination of expenses on realization (at another leaving) of securities the price for purchase of the
valuable paper nominated in a foreign currency (including expenses for purchase thereof shall be determined at a rate
of the Central bank of the Russian Federation, effective at the moment of acceptance of the specified valuable paper
to the account. The current reassessment of the securities nominated in a foreign currency is not made (the
paragraph has been added from 14 July 2005 according to the Federal act N 58-FZ of 6 June 2005; the effect shall
apply to the relations arisen since 1 January 2005).

   In case of selling stocks obtained by stockholders when reorganization of the organizations, the price for purchase
of such stocks shall be considered their cost determined according to clauses 4-6 of article 277 of the present chapter
(the paragraph has been added from 14 July 2005 according to the Federal act N 58-FZ of 6 June 2005; the effect
shall apply to the relations arisen since 1 January 2005).

   3. With a view of this Chapter, securities shall be deemed circulating on the formal securities market subject to
simultaneous observance of the following conditions:

  1) If they are allowed to circulation by one legally authorized trade organizer, at least;
    2) If the information on their prices (quotations) was published through mass media (including electronic) or may be
submitted by the trade organizer or other authorized person to any interested person within three years upon date of
fulfillment of securities transactions;

  3) If the market quotation is to be calculated for them, when stipulated by the appropriate national legislation.

   For the purpose of the present clause under the national legislation is understood as legislation of that state within
which territory floatation of securities is made (conclusion of the civil-law transactions following transfer of the property
right to securities including outside of the organized securities market) (the paragraph has been added from 14 July
2005 according to the Federal act N 58-FZ of 6 June 2005; the effect shall apply to the relations arisen since 1
January 2002).

   4. In this Chapter, an average weighed price of securities for the bargains accomplished within trading day through
the trade organizer shall be understood under the market quotation of the securities. If transactions with the same
securities have been made through two and more trade organizers, the tax payer has the right to choose
independently usual market quotation of one of the trade organizers. In case the trade organizer does not calculate an
average weighed price, a half of the amount of maximal and minimal prices of bargains, accomplished within trading
day through this trade organizer, shall be deemed by an average price in this Chapter.

   Under the added interests (coupon) a part of interest yields (coupon) shall be understood, which payment is
stipulated by issue conditions of such securities, to be estimated proportionally to the number of days, past since the
date of issue of the securities or payment date of previous coupon income before date of fulfillment of the bargain
(date of transfer of the securities).

   5. For the taxation, an actual price of sale or other retirement of securities circulating on the formal securities
market shall be deemed by market price of those, if such a price falls within the interval between the minimal and
maximal prices of bargains (an interval of the prices) with the specified securities registered by the trade organizer on
a securities market as of the date of fulfillment of an appropriate bargain. In case of bargain performance through the
trade organizer under the date of bargain performance shall be understood the date of tendering on which the
corresponding bargain with a security has been made. In case of selling a security outside of the organized securities
market the date of performance of the transaction shall be considered the date of determination of all the essential
provisions of transfer of a security, that is the date of signing the contract (the paragraph is in the wording effective
since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1
January 2002; is supplemented from 14 July 2005 according to the Federal act N 58-FZ of 6 June 2005; the effect
shall apply to the relations arisen since 1 January 2002, - see the previous wording).

   If bargains with the same securities as of a certain date have been fulfilled through two and more trade organizers
on a securities market, the tax payer has the right to choose independently the trade organizer, whose interval of
prices to use for taxation.

    For lack of the information on the trade organizers’ price interval on the securities market as of the date of
fulfillment of the bargain, the tax payer shall accept an interval of sale prices of these securities according to trade
organizers on a securities market as of the date of the nearest tenders held before the day of fulfillment of an
appropriate bargain, if the trade organizer held the tenders on these securities once at least within last 12 months.

  The actual price of sale or other retirement of the securities, falling within the appropriate interval of prices, shall be
accepted as a market price for taxation purposes, provided that the tax payer meets the procedure stated above.

   In case the securities, circulating on the formal securities market, are sold at the price lower minimal price of
bargains on the formal securities market, the latter shall be taken into account for calculation of financial result (the
Subparagraph has been added since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall
extend to the relations arisen since 1 January 2002).

   6. As to the securities non-circulating throughout the formal securities market, the actual price of sale or other
retirement shall be accepted for the taxation purposes, provided that one at least of the following requirements has
been met:

   1) If the actual price of an appropriate bargain falls within the price interval for similar (identical, homogeneous)
securities registered by the trade organizer on the securities market as of the date of fulfillment of the bargain or the
date of nearest tenders held to the day of fulfillment of an appropriate bargain, provided that the trade organizer has
held tenders on these securities once at least within last 12 months (the Subclause has been supplemented since 1
July 2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1
January 2002, - see the previous wording).

   2) If an actual price of an appropriate bargain deviates by 20 percents up or down from an average weighed price
of similar (identical, homogeneous) securities assessed by the trade organizer on a securities market according to
rules established by him on results of tenders as of the date of conclusion of such a bargain or the date of nearest
tenders held on the day of fulfillment of an appropriate bargain, provided that the trade organizer held the tenders on
these securities once at least within last 12 months (the Subparagraph has been supplemented since 1 July 2002
according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January 2002, -
see the previous wording).

   For lack of the information regarding results of tenders on similar (identical, homogeneous) securities, an actual
price of the bargain shall be accepted for the taxation purposes, if the specified price differs no more than 20 percents
from the calculated one for this securities, which can be determined as of the date of the bargain with the securities in
view of the specified conditions of the bargain, features of circulation and the price of securities and other parameters,
the information on which may underlie such a calculation. To determine the calculated price of the stock, the methods
of cost estimation stipulated by the legislation of the Russian Federation may be used by tax payer independently or
with attraction of appraiser, and to determine the calculated price of the debt securities the refinancing rate of the
Central bank of the Russian Federation may be used. If the tax payer determines the calculated price of the stock
independently, the above-used method of cost estimation may be fixed in a registration policy of the tax payer (the
paragraph has been supplemented since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall
extend to the relations arisen since 1 January 2002; is in the wording enforced from 14 July 2005 according to the
Federal act N 58-FZ of 6 June 2005; the effect shall apply to the relations arisen since 1 January 2002, - see the
previous wording).

  7. The tax payer-shareholder selling the shares, which he received as the result of increase in the authorized
capital of a joint-stock company, shall determine the income as a difference between selling price and primarily paid
cost of the share, adjusted in view of the change in the number of shares caused by increase in the authorized capital.

  8. Tax payers shall determine the assessment basis separately by operations with securities, except for the
assessment basis by operations with the securities, determined by professional participants of a securities market.
Thus, tax payers (except for the professional participants of a securities market involved with dealer activity) shall
determine the assessment basis for transactions with the securities circulating on the formal securities market,
separately from the assessment basis of the transactions with the securities non-circulating on the formal securities
market.

   Professional participants of a securities market (including banks), unrelated to dealer activity, should determine in a
registration policy for the taxation purposes a procedure of formation of the assessment basis for the transactions with
securities circulating on the formal securities market, and the assessment basis for the transactions with other
securities (the Subparagraph has been supplemented since 1 July 2002 according to the Federal Law No. 57-FZ of
29 May 2002; shall extend to the relations arisen since 1 January 2002).

   Thus, a tax payer shall independently choose the types of securities (either circulating or not on the formal
securities market), the formation of the assessment basis for which shall require incorporating into the structure of
incomes and expenses other ones determined according to this Chapter (the Subparagraph has been added since 1
July 2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1
January 2002).

   9. Upon sale or other retirement of securities, a tax payer shall choose independently according to the registration
policy adopted for the taxation purposes one of the following methods of writing off cost of retired securities to the
expenses:

  1) by cost of first in - first out (FIFO);

  2) by cost of last in - first out ( (LIFO);

  3) by unit cost.
  (The Clause is in the wording effective since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002;
shall extend to the relations arisen since 1 January 2002, - see the previous wording).

    10. The tax payers having received the loss (losses) from securities transactions in the previous taxation period or
in the previous taxation periods, shall have the right to reduce the assessment basis for securities transactions in the
accounting (tax) period (to transfer the specified losses to the future) in the procedure and under conditions,
established by Article 283 of this Code.

   Thus, losses received in the previous taxation period (previous taxation periods) from the transactions with the
securities non-circulating on the formal securities market, may be referred to reduction of the assessment basis for the
transactions with such securities, determined in the accounting (tax) period (the Subparagraph is in the wording
effective since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations
arisen since 1 January 2002, - see the previous wording).

   Thus, losses suffered in the previous tax period (previous tax periods) from the transactions with the securities
circulating on the formal securities market, may be referred to reduction of the assessment basis for the transactions
on sale of this category of securities (the Subparagraph has been added since 1 July 2002 according to the Federal
Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January 2002).

   During the taxation period the losses suffered in the appropriate accounting period from the transactions with
securities either circulating or non-circulating throughout the formal securities market, shall be transferred to the future
separately and accordingly the specified categories of securities within the limits of the profit received from the
transactions with such securities (the Subparagraph has been added since 1 July 2002 according to the Federal Law
No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January 2002).

   The incomes gained from the transactions with securities, circulating on the formal securities market, may not be
reduced by expenses or losses resulted from the transactions with the securities other than circulating on the formal
securities market.

  The incomes, gained from the transactions with securities non-circulating on the formal securities market, may not
be reduced by expenses or losses resulted from the transactions with ones circulating on the formal securities market.

  The provisions of second - sixth Subparagraphs of this Clause shall not extend to the professional participants of a
securities market involved with dealer activity (the Subparagraph is in the wording effective since 1 July 2002
according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January 2002, -
see the previous wording).

   11. The tax payers (including banks), involved with dealer activity on the securities market, when determining the
assessment basis and transferring loss to the future period in the procedure and under conditions, established by
Article 283 of this Code, shall form the taxation base and estimate the amount of loss to be transferred to the future
period in the view of all the incomes (expenses) and loss resulted from entrepreneurial activity.

   Tax payers may transfer to the future period the losses suffered in the appropriate accounting period within current
taxation period, within the limits of the amount of profit, gained from entrepreneurial activity.
   (The Clause has been added since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall
extend to the relations arisen since 1 January 2002).




                       Article 281. Features of calculation of assessment basis
                        On operations with the state and municipal securities

   Upon distribution of state securities of the Russian Federation, the state securities of Russian Federation entities
and municipal securities (further - state and municipal securities), the income, declared (established) by the emitter,
as the yield rate of interest for a nominal value of the specified securities, and for the securities, which yield rate of
interest has not been established - the income in the form of a difference between a nominal value of the securities
and the cost of its primary distribution estimated as an average weighed price as of the date of issue of securities has
been deemed distributed according to the established procedure (the paragraph has been added since 1 July 2002
according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January 2002).

   At the taxation of bargains related to sale or other retirement of securities, the price of state and municipal issued
securities shall be taken into account without interest yields (coupon) income which is exposed under the other rate,
than those stipulated by clause 1 of article 284 of the present Code, to be paid under conditions of such securities’
emission for the period of the tax payer’s possession of these securities (the part is supplemented since 1 January
2006 by the Federal act N 58-FZ of 6 June 2005, - see the previous wording).
   The interests charged during presence of the state and municipal securities on the tax payer’s balance, shall be
taxable in the procedure and under conditions established by this Chapter. The proceeds from the state and municipal
securities at which circulation the price of the bargain includes a part of added coupon income, shall be decreased by
the income at a rate of the added coupon income due to the tax payer for the period of possession of the specified
securities.




                       Article 282. Features of calculation of the taxation basis
                               under REPO transactions with securities

   1. For the purposes of this Code, under the REPO transactions shall be understood as two concluded
simultaneously interconnected transactions on pertaining to sale and obligatory subsequent reverse purchase (sale)
of securities of the same issue in the same number performed under the prices established by the corresponding
contract (contracts) (hereinafter - the contract). Thus in the cases established by clauses 6 and 7 of the present article
when observance of a provision on invariance of the rate on REPO operation established by the contract, the quantity
of securities and the price of selling thereof may be changed before the date of performance of the second part of
REPO bargain. REPO operations may be performed as directly between the parties of REPO operation, and through
the trade organizer. Transactions on selling securities shall be interconnected if the seller of securities (hereinafter -
the seller) under the first transaction is the buyer of securities (hereinafter - the buyer) under the second transaction,
and the buyer under the first transaction is the seller under the second transaction. The first bargain for the term of
execution shall be considered the first part REPO bargain, and the second bargain - the second part REPO, thus
obligations of participants for the second part REPO bargain shall be under condition of performance of the first part
REPO. For the purposes of this Code the term between the dates of execution of the first and the second parts of
REPO bargain, established by the contract, should not exceed one year.

   For the purposes of this article the dates for performance of the first and second parts of REPO bargains
respectively shall be considered the dates of execution of the first and second parts of REPO bargains stipulated by
the contract as participants of operation REPO of the obligations. Thus the actual price for selling securities both
under the first part REPO, and the second part REPO irrespective of market (calculated) cost of such securities shall
be applied. The prices for selling (acquisition) the both parts of REPO bargains are estimated with account of added
yield (coupon) income as of the date of each part of REPO bargain.

    If for the date of execution of the second part REPO the obligation on return purchase (realization) of securities in
full or partly is not stopped (hereinafter in the present article) - inadequate performance of the second part REPO), but
thus the procedure for settlement of mutual claims according to the claims stipulated by clause 5 of this article, the
provisions established by clause 5 of the present article shall be applied. Participants of operation REPO register
expenses for acquisition (realization incomes) of securities under the first part REPO with account of the provisions
established by article 280 of the present Code in other cases of default of the second part REPO.

    When performing the REPO operation the price for acquisition of securities and the size of added yield (coupon)
income does not change as of the date of execution of the first part REPO for the purposes of incomes’ taxation of
their subsequent realization after purchase of securities under the second part REPO. Financial result for the
purposes of taxation according to article 280 of the present Code is not determined when selling securities under the
first part of REPO and the second part of REPO bargain.

   2. On the REPO operations the payments effected by the emitter under securities during the period between the
dates of performance of the first part of REPO bargain and the second part of REPO bargain may be accepted in
reduction of the sum of pecuniary funds subject to payment by the seller under the first part of REPO transaction at
the subsequent purchase of securities under the second part of REPO or to be transferred by the buyer under the first
part of REPO to the seller under the first part of REPO according to the contract. Thus such payments shall not be
considered as incomes of the buyer under the first part of REPO and shall be included in incomes of the seller under
the first part of REPO.

  The interest (coupon) income shall be registered at calculation of tax base of the seller under the first part of REPO
according to the procedure established by articles 271, 273 and 328 of the present Code, and shall not be registered
when determining the tax base under the interest (coupon) income under the securities being the object of REPO
operation at the buyer under the first part of REPO.
   Taxation of the incomes determined by the present clause shall be performed under the tax rates established by
article 284 of the present Code. Thus the specified tax rates shall be applied depending on a type of securities
(promissory note).

   Provisions of the present clause shall not distributed to the seller under the first part of REPO if the sold securities
are got on the other REPO operation.

  3. For the purposes of this Code for the seller of the first part of REPO bargain the difference between the
purchase price of second part of REPO bargain and the selling price of the first part of REPO bargain shall be
deemed as follows:

   1) In case such a difference is positive - by expenses for payment of interests on the distributed funds which are
included in the structure of expenses according to articles 265, 269 and 272 of this Code;

   2) In case such a difference is negative - by incomes as interests on the loan received by securities which are
included in the structure of incomes according to the procedure stipulated by Articles 265, 269 and 272 of this Code.

  4. For the buyer under the first part of REPO bargain the difference between the selling price of the second part of
REPO and the price of purchase for the first part of REPO shall be deemed as follows:

   1) In case such a difference is positive - by incomes as interests on the distributed funds which are included in the
structure of incomes according to articles 250 and 271 of this Code (for banks - by article 290 of this Code);

   2) In case such a difference is negative - by expenses as interests on the loan received by securities which are
included in the structure of expenses according to the procedure stipulated by articles 265, 269 and 272 of this Code.

   5. For the purposes of this article the date for recognition of incomes (expenses) on REPO operation is the date for
execution (termination) of obligations of the participants under the second part of REPO bargain with account of the
features established by clauses 3 and 4 of this article.

   6. According to the third paragraph of clause 1 of this article in case of default of the second part of REPO bargain
and at execution of the procedure for settlement of the mutual requirements established in the contract, meeting the
requirements, established by this clause, the tax base on REPO operation shall be determined in the following
procedure:

   the seller under the first part of REPO bargain recognizes for the taxation purposes performance of the second part
REPO and simultaneously selling the securities which have been not redeemed by the second part REPO, at a
market price of security being the object of REPO operation, and in the absence of a market price - at settlement price
of security determined according to clause 5 or 6 of article 280 of the present Code. In case of recognition the
incomes (charges) from selling the securities aforesaid provisions established by article 280 of the present Code shall
be applied for the taxation purposes;

   the buyer under the first part of REPO bargain recognizes for the taxation purposes performance of the second part
REPO and simultaneously purchase of the securities which have been not sold under the second part REPO, at a
market price of the security being the object of REPO operation, and in the absence of a market price - at settlement
price of security which shall be determined according to clauses 5 or 6 of article 280 of the present Code.

    Procedure for settlement of mutual requirements at inadequate execution of the second part REPO should provide
a duty of the parties to carry out termination of inter-settlements under the contract within 30 days from the date of
execution of the second part REPO. Thus the specified procedure may provide the right of the buyer (seller) under the
first part REPO to sell (purchase) during the specified term of the securities which have been not put by the second
part REPO, including actual proceeds from selling (actual charges on purchase) with non-executed liabilities on REPO
operation, and (or) to provide right of the buyer (seller) by the first part REPO to refuse delivery (acceptance) of the
securities which have been not put by the second part ÐÅÏÎ, including their market cost with non-executed liabilities on
REPO operation.

   7. If within the period between the dates of execution of the first and second parts REPO the emitter carries out
coupon payment (partial redemption of the nominated cost of securities), such payments change the selling
(purchase) price under the second part REPO, used at calculation of incomes (charges) according to clauses 3 and 4
of the present article unless otherwise stipulated by the contract.
    In case the contract does not stipulate the account of coupon payments (partial redemption of the nominated value
of securities) at calculation of the selling (purchase) price under the second part REPO, such payments do not
influence to the sum of incomes (charges) determined according to clauses 3 and 4 of the present article.

   8. If settlements (transfer of pecuniary funds and (or) transfer of securities) between participants of REPO
operation shall be stipulated by the contract within the period between the dates of execution of the first and second
parts REPO depending on the criteria of changing market prices established by treaty provisions on the securities
being object of REPO operation, such payments unless otherwise stipulated by the contract, change the selling
(purchase) price under the second part REPO, used at calculation of the incomes (charges) determined according to
clauses 3 and 4 of this article.

   Reception (transfer) of pecuniary funds and securities by participants of REPO operation depending on the criteria
of changing market prices established by treaty provisions is not the basis for updating the sums of incomes (charges)
as interests on the placed (involved) funds on REPO operation, determined according to clauses 3 and 4 of this
article.

  9. For the purposes of the present Code opening of a short position under the securities which is being object of
REPO operation and the first part of REPO taking place at the buyer, shall be understood as alienation of the
specified security thereby, except for selling a security under the first part REPO or selling a security under the second
part REPO within the limits of one REPO operation.

  Opening of a short position for a security shall be carried out in the absence of securities of the same issue in the
buyer’s property for the first part REPO, realization or which other issuing will not lead to opening of the specified
short position.

  For the purposes of the present Code under closing of a short position for a security shall be understood as
execution of the second part of REPO operation by the buyer under the first part REPO at the expense:

  securities of the same issue obtained on the another REPO transaction on which the short position is open;

  purchases of securities of the same issue on which the short position is open, except for the purchase of securities
on REPO operation and execution of obligations on purchase of securities by the seller for the second part REPO.

   Closing of a short position under a security shall be carried out till the moment of securities’ purchase of the same
issue in securities portfolio of the buyer under the first part REPO, which subsequent (immediate) alienation will not
lead to opening of a short position.

   Sequence of closing of the short positions under securities of one issue shall be determined by tax payer
independently according to the accepted tax registration with a view of the taxation of one of the following methods:

  first of all closing a short position is effected which was the first open (FIFO);

  first of all closing a short position is effected which was the last open (LIFO);

  choice of sequence of closing a short position is effected by the tax payer at a cost of securities to the concrete
open short position (at a unit cost).

    Closing of a short position for securities on the basis of execution obligations under the second part REPO,
following of a short position opening shall be carried out according to the extraordinary procedure at the moment of
execution obligations under the second part REPO by the tax payer.

   10. Tax base on the operation connected to opening of a short position shall be determined in the following
procedure.

   In case of opening a short position for securities on which charging of interest (coupon) income is stipulated, the
tax payer opening a short position makes charging of the interest expenditure determined as a difference between the
sum of the accumulated interest (coupon) income for the date of closing a short position (including the sums of the
interest income which have been paid by issuer within the period between the dates of opening and closing a short
position) and the sum of the accumulated interest (coupon) income for the date of opening a short position. Charging
of the interest (coupon) income shall be effected during opening a short position with a recognition of the sums of the
accumulated charge for the date of closing a short position or for accounting date if there was no closing of a short
position in the accounting period. If taxation of the interest (coupon) income is carried out under the tax rates
stipulated by clause 4 of article 284 of the present Code, the specified sums of the charged interest (coupon) income
shall concern to reduction of the sum of the interest (coupon) income exposed under the corresponding tax rate.

   The obtained incomes on the operation connected to opening a short position shall be determined in the procedure
stipulated by clauses 5 or 6 of article 280 of the present Code. Thus in case of opening a short position following of
closing a short position for securities in the cases, stipulated by clause 9 of this article, incomes on a new open
position shall be determined proceeding from market cost (and in the absence thereof - at a settlement cost) of
securities and the accumulated interest (coupon) income for the date of opening thereof. Incomes for the operation
connected to opening a short position shall be considered for the date of closing a short position.

   Expenses for the operation connected to closing a short position, and the costs connected to purchase and sale of
the corresponding securities shall be determined in the procedure stipulated by article 280 of the present Code. Thus
in case of opening a short position following of closing a short position under securities in the cases, stipulated by
clause 9 of this article, expenses for a closed position shall be determined proceeding from a market cost (and in the
absence thereof - at a settlement cost) securities and the accumulated interest (coupon) income for the date of
closing. Thus the expenditure does not include sums of the accumulated (coupon) income which earlier has been
registered at formation of tax base. Expenses for the operation connected to closing a short position shall be
considered as for the date of closing a short position.
   (The article is in the wording enforced since 1 January 2006 by the Federal act N 58-FZ of 6 June 2005. - See the
previous wording).




                           Article 283. Transfer of losses to the future period

   1. The tax payers having incurred loss ( losses) estimated according to this Chapter, in the previous taxation period
or in the previous taxation periods, have the right to reduce the assessment basis of the current taxation period by all
the amount of loss incurred or by the part of this amount (to transfer the loss to the future period). Thus, the
assessment basis of the current tax period shall be calculated in view of the features stipulated by this Article, Article
275(1), Article 280 and 304 of this Code (the Subparagraph is in the wording effective since 1 July 2002 according to
the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January 2002, - see the
previous wording).

   2. A tax payer has the right to transfer loss to the future period within ten years following the taxation period, when
this loss has been suffered.

   A tax payer has the right to transfer the amount of loss suffered in the previous taxation period to the current tax
period. Thus, the aggregate of the transferable loss in no one accounting (taxation) period may exceed 30 percents of
the assessment basis calculated according to Article 274 of this Code.
   ____________________________________________________________________
   The second sentence will be excluded from the second paragraph of clause 2 of this article since 1 January 2007
by the Federal act N 58-FZ of 6 June 2005.
   ____________________________________________________________________

   In the similar order the loss, which has not been transferred to the nearest following year, may be transferred fully
or in part to the next year of the subsequent nine years in view of the provisions of second Subparagraph of this
Clause.

   Restriction established by the second paragraph of this clause shall not be applied concerning to the tax payers-
organizations having the resident status of industrial-production specific economic zone or tourist-recreational specific
economic zone (the paragraph has been added since 1 January 2006 by the Federal act N 117-FZ of 22 July 2005; is
supplemented from 8 July 2006 by the Federal act N 75-FZ of 3 June 2006, - see the previous wording).

  3. If a tax payer has suffered losses more than in one taxation period, such ones shall be transferred to the future
period in that sequence in which they have been suffered.

   4. A tax payer is obliged to keep the documents confirming a size of suffered loss during the whole period when he
reduces the assessment basis of the current taxation period by the amounts of losses suffered before.

   5. In case the tax payer terminates his activity owing to reorganization, the tax payer - assignee has the right to
reduce the assessment basis in the procedure and under conditions stipulated by this Article, by the amount of losses
suffered by the companies being reorganized to the moment of reorganization.
                                              Article 284. Tax rates
  1.Tax rate shall be fixed at amount of 24 per cents, except for the cases stipulated by Clauses 2-5 of this Article.
Thus:

  amount of tax calculated according to tax rate of 6.5 per cent, shall enter federal budget;

  amount of tax, calculated according to tax rate of 17.5 per cent, shall enter budgets of Russian Federation entities.

   Rate of the tax to be entered to Russian Federation entities’ budgets, could be reduced for some categories of
taxpayers in compliance with law of the entities of the Russian Federation. Thus, the tax rate aforesaid could not be
less 13.5 per cent.

   Rate of the tax to be entered to Russian Federation entities’ budgets, from the activity carrying out within the
territory of a specific economic zone may be established for the organizations - residents of a specific economic zone,
under condition of entering the separate registration of the incomes (charges), obtained (incurred) from the activity
carrying out within the territory of a specific economic zone, and the incomes (charges) obtained (incurred) from the
activity carrying out within the territory of a specific economic zone by laws of the Russian Federation entities. Thus
the tax rate aforesaid could not be less 13.5 per cent (the paragraph has been added since 8 July 2006 by the
Federal act N 75-FZ of 3 June 2006).
   (The clause is in the wording enforced since 1 January 2005 by the Federal act N 95-FZ on 29 July 2004, - see the
previous wording).

  2. The taxes on foreign companies’ incomes unrelated to the activity through permanent mission in the Russian
Federation, shall be fixed at the following rates:

   1) 20 percents - from all the incomes, except for ones specified in Subclause 2 of this Clause and Clauses 3 and 4
of this Article in view of the provisions of Article 310 of this Code (the Subclause is in the wording effective since 1
July 2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1
January 2002, - see the previous wording).

   2) 10 percents - from use, maintenance or tenancy (freight) of ships, planes or other mobile vehicles or containers
(including trailers and the auxiliaries necessary transportation facilities) in connection with international
transportations.

   3. The following tax rates shall apply to the assessment basis being calculated for the incomes, received as
dividends:

  1) 9 percents - for the incomes received as dividends from Russian companies by Russian companies and natural
persons - tax residents of the Russian Federation (the clause is in the wording enforced since 1 January 2005 by the
Federal act N 95-FZ on 29 July 2004, - see the previous wording);

  2) 15 percents - for the incomes received as dividends from Russian companies by foreign companies, and also
under the incomes received as dividends by Russian companies from foreign companies.

  Thus, the tax is calculated in view of the features, stipulated by Article 275 of this Code.

  4.The following tax rates shall apply to the assessment base determined for individual types of debentures:

  1) 15 per cent - for income as interests for governmental and municipal securities (except for securities specified in
subclauses 2 and 3 of this clause and the interest income obtained by Russian organizations under the state and
municipal securities, placed outside the Russian Federation, except for the interest income obtained by primary
owners of the state securities of the Russian Federation which have been received thereby in exchange for state
short-term non-coupon bonds according to the procedure established by Government of the Russian Federation),
which conditions of issue and circulation stipulate interest-only yield, as well as for income as interest-yield from
bonds secured by hypothec, issued after 1 January 2007, and income obtained by founders of trust management of
hypothec coverage on the basis of acquired hypothec certificates of participation, issued by manager of hypothec
coverage after 1 January 2007 (the subclause is supplemented 1 January 2006 by the Federal act N 58-FZ of 6 June
2005, - see the previous wording);
   2) 9 per cent - for income as interests for municipal securities issued for the period of three years at least before 1
January 2007, as well as for income as interests on bonds secured by hypothec, issued before 1 January 2007, and
income obtained by founders of hypothec coverage’s trust on the basis of acquired hypothec certificates of
participation, issued by manager of hypothec coverage before 1 January 2007;

   3) 0 per cent - for income as interests on governmental and municipal bonds, issued before 20 January 1997
inclusively, as well as for income as interests on bonds of 1999 state currency loan issued while innovation of bonds
of internal governmental currency loan III series, issued in order to provide for regulation of internal currency debt of
former Soviet Union and internal and external currency debt of the Russian Federation.
   (The clause is in the wording enforced since 1 January 2005 by the Federal act N 107-FZ on 20 August 2004, - see
the previous wording).

   5. The profit received by the Central Bank of the Russian Federation from the activity related to functions stipulated
by the Federal Law “On the Central Bank of the Russian Federation (The Bank of Russia)”, shall be taxable at a rate
of 0 per cents.

   The profit received by the Central Bank of the Russian Federation from the activity unrelated to the functions,
stipulated by the Federal Law “On the Central Bank of the Russian Federation (The Bank of Russia)”, shall be taxable
at a rate established by Clause 1 of this Article.

   6. The amount of tax estimated by tax rates, established by Clauses 2-4 of this Article, is subject to entering the
federal budget.




                       Article 285. The taxation period. The accounting period

  1. A calendar year shall be regarded as the taxation period.

   2. First quarter, half-year and nine months of a calendar year shall be regarded as the accounting periods under
the tax.

   For the tax payers, calculating monthly advance payments proceeding from actually received profit, one month, two
months, three months and so on to the end of a calendar year shall be regarded as the accounting periods (the
paragraph has been added since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to
the relations arisen since 1 January 2002).




            Article 286. Procedure for calculation of the tax and advance payments

  1. A tax shall be determined as a tax rate proper interest share of the assessment basis being determined
according to Article 274 of this Code.

   2. Tax payers shall calculate the amount of tax independently by results of the taxation period, unless otherwise
stipulated by Clauses 4 and 5 of this Article.

   By results of each the accounting (taxation) period, unless otherwise stipulated by this Article, tax payers shall
calculate the amount of advance payment proceeding from the tax rate and the taxable profit, calculated as the
progressive total from the beginning of the tax period to the end of the accounting (taxation) period. During the
accounting period, tax payers shall calculate the amount of monthly advance payment in the procedure established by
this Article (the paragraph is in the wording effective since 1 July 2002 according to the Federal Law No. 57-FZ of 29
May 2002; shall extend to the relations arisen since 1 January 2002, - see the previous wording).

    The amount of monthly advance payment to be paid in the first quarter of the current taxation period shall be
accepted equal to monthly advance payment to be paid by a tax payer in last quarter of the previous taxation period.
The amount of monthly advance payment for second quarter of the current tax period shall be assumed equal to one
third of the one calculated for the first accounting period of the current year (the paragraph has been added since 1
July 2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1
January 2002).
  The amount of monthly advance payment for third quarter of the current taxation period shall be assumed equal to
one third of the difference between the amount of the advance payment calculated by results of half a year, and the
amount of the advance payment calculated by results of first quarter (the paragraph has been added since 1 July
2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January
2002).

   The amount of monthly advance payment for fourth quarter of the current taxation period shall be assumed equal
to one third of the difference between the amount of the advance payment calculated by results of nine months, and
the amount of the advance payment calculated by results of the half a year (the paragraph has been added since 1
July 2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1
January 2002).

   If the amount of monthly advance payment calculated this way is negative or equal to zero, the specified payments
in the appropriate quarter are failed (the paragraph has been added since 1 July 2002 according to the Federal Law
No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January 2002).

   Tax payers have the right to pass to calculation of monthly advance payments proceeding from actually received
profit subject to calculation. In this case the tax payers shall calculate the amounts of advance payments proceeding
from the tax rate and actually received profit to be calculated by the progressive total from the beginning of the
taxation period to the end of an appropriate month.

   Thus, the amount of the advance budgetary payments shall be determined with the amounts of earlier charged
advance payments taken into account. The tax payer has the right to pass to monthly advance payments based on
the actual profit upon notification of the tax body on 31 December of the year preceding a taxation period, during
which he had passed to the said system of advance payments. Thus, the tax payer may not change the system of
advance payments during the taxation period (the paragraph is in the wording effective since 1 July 2002 according to
the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January 2002, - see the
previous wording).

   3.The companies, whose average quarterly trade profits did not excess three millions Roubles, as assessed for the
previous four months according to Article 249 of this Code, and also the budgetary institutions, the foreign companies
carrying out activity through their permanent representative in the Russian Federation, the non-profit companies
having no incomes from sale of goods (works, services), participants of partnerships regarding the income drawn from
participation in partnerships, the investors of the agreements for division of products in the part of the profits received
from fulfillment of the said agreements, the beneficiaries under agreements for trust management shall only pay
quarter advance payments by results of the accounting period (the clause is in the wording effective since 1 July 2002
according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January 2002, -
see the previous wording).

   4. If the foreign company, receiving incomes from sources situated in the Russian Federation, unrelated to the
permanent mission in the Russian Federation, is the tax payer, the Russian company or a foreign company carrying
out activity in the Russian Federation through permanent mission (tax agents), paying the specified income to the tax
payer, shall be appointed to determine the tax amount, to deduct this amount from the tax payer’s income and to enter
the tax to the budget.

   The tax agent shall determine the tax amount by each payment (transfer) of money resources or other income
receipt.

  5. Russian companies paying the tax payers incomes in the form of dividends, and interests on the state and
municipal securities to be taxable under this Chapter shall determine the tax amount separately by each of those tax
payers with reference to each payment of the specified incomes:

  1) If the tax payer derives his income from Russian company, a duty to deduct the tax from the tax payer’s income
and to enter it to the budget shall be assigned to this company.

  In this case, the tax as advance payments shall be deducted from the tax payer’s incomes at each the payment of
such incomes;

   2) when selling the state and municipal securities, at which circulation the amounts of accumulated interest yields
(accumulated coupon income) shall be recognized as an income received in the form of per cents, the tax-payer -
recipient of the income shall calculate and pay tax from such incomes independently (the paragraph is in the wording
effective since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations
arisen since 1 January 2002, - see the previous wording).

   The federal executive body authorized by Government of the Russian Federation shall inform the tax payer of kinds
of securities to which the procedure established by this clause shall apply.

   In case of selling (issuing) of the state and municipal securities at whose circulation the recognition of sums of the
accumulated interest (coupon) income is not stipulated by the income obtained as interests by seller, the tax payer -
addressee of the income carries out independently charging and payment of the tax from such incomes which are
taxable according to clause 1 of article 284 of the present Code unless otherwise provided for by this Code (the
paragraph has been added since 1 January 2006 by the Federal act N 58-FZ of 6 June 2005).

  6. The companies, created after enforcement of this Chapter, shall pay monthly advance payments after the
expiration of full quarter since state registration (the Clause has been added since 1 July 2002 according to the
Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January 2002).




            Article 287. Terms and procedure of payment of tax and payment of tax
                               In the form of advance payments

  1.The tax to be paid on expiration of the taxation period, shall be paid to the date stipulated by Article 289 of this
Code for submission of tax returns for the appropriate tax period, at the latest.

   Advance payments by results of the accounting period shall be paid to the date stipulated for submission of tax
returns for the appropriate accounting period, at the latest (the paragraph is in the wording effective since 1 June 2002
according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January 2002, -
see the previous wording).

  Monthly advance payments to be paid during accounting period shall be paid to 28-th day of each month of this
accounting period, at the latest (the paragraph is in the wording effective since 1 June 2002 according to the Federal
Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January 2002, - see the previous wording).

  The tax payers, calculating monthly advance payments for an actually received profit, shall pay advance payments
on 28-th day of the month following the one of taxation (the paragraph is in the wording effective since 1 June 2002
according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January 2002, -
see the previous wording).

   The amounts of monthly advance payments, paid during accounting (taxation) period, shall be set off by results of
the accounting (taxation) period after advance payments paid. Advance payments by results of the accounting period
shall be set off on the account of tax payment by results of the taxation period (the paragraph is in the wording
effective since 1 June 2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations
arisen since 1 January 2002, - see the previous wording).

   2. Either Russian or foreign company involved with business in the Russian Federation through permanent mission
(tax agents), paying income to the foreign company, shall deduct the tax amount from this foreign company’s income,
except for dividends and interests on the state and municipal securities (to which the procedure, stipulated by Clause
4 of this Article, shall apply), at each the payment (transfer) of money resources or other receipt of the foreign
company’s incomes, unless otherwise stipulated by this Code (the paragraph has been supplemented since 1 June
2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January
2002, - see the previous wording).

  A tax agent is obliged to transfer an appropriate tax amount within three days upon day of payment (transfer) of
money resources to the foreign company or receipt of other incomes to the foreign company.

   3. The features of the tax payment for the tax payers having detached divisions shall be established by Article 288
of this Code.

   4. A tax agent having paid the tax payers dividends or interests yields on state and municipal securities shall
transfer the tax deducted from such payments within 10 days since payment.
   The tax from incomes from state and municipal securities, at whose circulation the recognition of sums of the
accumulated interest (coupon) income is stipulated by the income obtained as interests by seller, which are taxable
according to clause 4 of article 284 of this Code at the recipient of the income, shall be paid by the latter within 10
days upon expiration of the corresponding month of accounting (tax) period in which the income is obtained,
proceeding from the dates recognized as the dates of income receipt according to articles 271 and 273 of this Code
(the paragraph is in the wording effective since 1 June 2002 according to the Federal Law No. 57-FZ of 29 May 2002;
is in the wording enforced since 1 January 2006 by the Federal act N 58-FZ of 6 June 2005, - see the previous
wording).

   5. Newly created companies shall pay advance payments for the appropriate accounting period provided that the
proceeds from sale have not exceeded one million Roubles per month or three million Roubles per quarter. For
overstep of the specified limits, the tax payer shall pay advance payments in the procedure stipulated by Clause 1 of
this Article in view of requirements stipulated by clause 6 of article 6 of this Code beginning from the month following
that one of such an exceeding (the clause is in the wording effective since 1 June 2002 according to the Federal Law
No. 57-FZ of 29 May 2002, - see the previous wording).



                       Article 288. Features of tax calculation and tax payment
                             For the tax payers having detached divisions

   1.The tax payers - Russian companies having detached divisions, shall calculate and pay to the federal budget
amounts of advance payments, and amounts of the tax estimated by results of the taxation period, at their location
without distribution of the specified amounts by the detached divisions.

   2. The Russian companies-tax-payers shall pay advance payments and taxes to enter the income part of Russian
Federation entities’ budgets, and budgets of municipal formations, at their location, and at the location of each the
detached subdivision proceeding from the profit share due to these detached subdivisions, to be estimated as the
simple average of the weight of average list of employees (expenses for labor remuneration) and weight of
depreciated cost of the property, determined for the tax payer as a whole, according to Clause 1 of Article 257 of this
Code (the paragraph is in the wording effective since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May
2002, - see the previous wording).

   if the tax payer has some detached subdivisions within the territory of one entity of the Russian Federation, than
the profit’s distribution can not be made on each of these subdivisions. The tax amount which is subject to payment
into the Russian Federation entity’s budget, shall be determined in that case proceeding from a share of the profit
estimated from a set of parameters of the detached subdivisions, taking place on the territory of the Russian
Federation entity. Thus the tax payer independently chooses that detached subdivision through which the tax payment
is effected into the Russian Federation entity’s budget, having notified the fiscal agencies on the made decision in
which the taxpayer’s detached subdivisions are registered (the paragraph has been added since 1 January 2006 by
the Federal act N 58-FZ of 6 June 2005).
   ____________________________________________________________________
   The second paragraph of clause 2 of the previous wording shall be the third paragraph of clause 2 of this wording
since 1 January 2006 - Federal act N 58-FZ of 6 June 2005.
   ____________________________________________________________________

   Specific weight of average list of employees and specific weight of depreciated cost of the property, specified in this
Clause, shall be determined proceeding from actual indices of average listed number of employees (expenses for
labor remuneration) and depreciated cost of fixed assets of the specified companies and their detached subdivisions
for the accounting (tax) period (the paragraph has been added since 1 July 2002 according to the Federal Law No.
57-FZ of 29 May 2002; is in the wording enforced since 14 July 2005 by the Federal act N 58-FZ of 6 June 2005, the
effect shall apply to the relations arisen since 1 January 2005, - see the previous wording).

  Thus, tax payers shall determine independently, what of indices should apply - average listed number of workers or
expenses on labor remuneration. The index selected by the tax payer should be invariable during the taxation period.

   The paragraph has been excluded since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall
extend to the relations arisen since 1 January 2002. - See the previous wording.

   Instead of an index of average listed number of workers, the tax payer having a seasonal working cycle or other
features of activity implying involvement of seasonal workers, may apply, as agreed with local tax body, an index of
specific weight of expenses for labor remuneration, being determined according to Article 255 of this Code. Thus, the
specific weight of expenses for labor remuneration of each the detached subdivision shall be determined in the tax
payer’s total expenses for labor remuneration.

    Advance payments, and the amounts of tax to enter the income part of Russian Federation entities’ budgets and
the budgets of municipal formations shall be estimated by the tax rates effective in the locations of the company and
its detached divisions.

   3. A tax payer shall calculated the amounts of advance payments and the tax to enter the budgets of the Russian
Federation entities and budgets of municipal formations by the tax rates effective on territories of location of detached
divisions.

   The paragraph has been excluded since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall
extend to the relations arisen since 1 January 2002. - See the previous wording.

  The tax payer shall inform the detached divisions, and their local tax bodies of the amounts of tax advance
payments, and tax amounts estimated by results of the taxation period on the day stipulated by this Article for
submission of tax returns for the appropriate accounting or taxation period, at the latest.

   4. The tax payer shall make advance payments and pay tax amounts estimated by results of the taxation period to
the Russian Federation entities budgets and local budgets on the location of the detached divisions on the day
stipulated by Article 289 of this Code for submission of tax returns for the appropriate accounting period or taxation
period (the clause is in the wording effective since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May
2002, - see the previous wording).

   5. If the tax payer has the detached division outside the Russian Federation, the tax is to be paid to the budget in
view of the features stipulated by Article 311 of this Code (the clause is in the wording effective since 1 July 2002
according to the Federal Law No. 57-FZ of 29 May 2002, - see the previous wording).




                  Article 288_1. Features of settlement and payment of the tax on
                 the organizations’ profit by residents of Specific economic zone
                                       in the Kaliningrad area
  1. Residents of Specific economic zone in the Kaliningrad area (hereinafter referred to as also - the residents) shall
pay the profit tax of organizations according to the present chapter, except for the cases established by this article.

   2. Residents use the special procedure for payment of the profit tax of organizations, established by the present
article, with respect to the profit obtained from realization of the investment project according to the federal law on
Specific economic zone in the Kaliningrad area, under provision of keeping of the separate incomes (expenses)
registration by residents, received (made) at realization of the investment project, and the incomes (expenses),
received (made) at realization of the other economic activities.

  3. If the separate registration of the incomes (expenses), obtained (made) at realization of the investment project
according to the federal law on Specific economic zone in the Kaliningrad area, and the incomes (expenses), obtained
(made) at realization of the other economic activities is not kept, the profit taxation received at realization of the
abovesaid investment project shall be made according to the present chapter beginning from that quarter in which
keeping of such separate registration has been stopped.

   4. For the purposes of this article under the tax base on profit tax from realization of the investment project
according to the federal law on Specific economic zone in the Kaliningrad area shall be recognized as pecuniary
evaluation of the profit obtained at realization of this investment project and determined on the basis of information of
the separate registration of incomes (expenses) (obtained (made) at realization of this investment project) and
incomes (expenses) (obtained (made) at realization of the other economic activities) to which provisions of the present
chapter are applied.

   5. For the purposes of this article the incomes obtained at realization of the investment project according to the
federal law on Specific economic zone in the Kaliningrad area, shall be considered as incomes from selling the goods
(works, services), made as a result of realization of this investment project, except for the manufacture of the goods
(works, services) on which the investment project can not be directed.
   6. The profit tax from selling the goods (works, services), obtained at realization of the investment project according
to the federal law on Specific economic zone in the Kaliningrad area and determined according to the present chapter
and by the federal law on Specific economic zone in the Kaliningrad area shall be exposed at the rate 0 concerning
the profit tax of organizations within six calendar years following the date of the legal entity’s inclusion into the unified
residents register of Specific economic zone in the Kaliningrad area.

   7. Rate of profit tax of organizations with respect to the tax base on profit tax from realization of the investment
project according to the federal law on Specific economic zone in the Kaliningrad area makes the size established by
clause 1 of article 284 of this Code and reduced to fifty per cent within the period from 7(th) till 12(th) calendar year
inclusive following the date of legal entity’s inclusion into the unified residents register of Specific economic zone in
the Kaliningrad area.

  Thus:

   1) amount of the profit tax of organizations concerning the tax base on profit tax from realization of the investment
project according to the federal law on Specific economic zone in the Kaliningrad area, estimated on the tax rate
reduced to fifty per cent in the size established by the second paragraph of clause 1 of article 284 of this Code, shall
be enlisted into the federal budget;

   2) amount of the profit tax of organizations concerning the tax base on profit tax from realization of the investment
project according to the federal law on Specific economic zone in the Kaliningrad area, estimated on the tax rate
reduced to fifty per cent in the size established by the third paragraph of clause 1 of article 284 of this Code, shall be
enlisted into the Kaliningrad area budget.

   8. If the reduced value of a rate on the profit tax of organizations for separate categories of tax payers is
established by the law of the Kaliningrad area according to the fourth paragraph of clause 1 of article 284 of this Code
which number includes residents, with respect to the taxes enlisted into the Kaliningrad area budget, the residents
shall apply the tax rate reduced to fifty per cent in the cases stipulated by this article.

   9. Difference between the amount of profit tax of organizations with respect the to tax base on profit tax from
realization of the investment project according to the federal law on Specific economic zone in the Kaliningrad area
which would be estimated by resident at non-using of the special procedure for payment of the profit tax of
organizations established by this article, and the amount of the profit tax of organizations, estimated according to the
present article the resident concerning the profit obtained from realization of the investment project according to the
federal law on Specific economic zone in the Kaliningrad area, shall not be included into tax base on the profit tax of
organizations for residents.
   (The article has been added since 1 April 2006 by the Federal act N 16-FZ of 10 January 2006).



                                            Article 289. The tax return

   1. Tax payers shall be obliged to provide their local tax bodies and ones local to each detached division with the
appropriate tax returns in the procedure determined by this Article irrespectively existing duty to pay the tax and (or)
make advance tax payments, features of calculation and payment of the tax, upon expiration of each accounting and
taxation period.

   Tax agents shall be obliged to provide local tax bodies with the tax calculations in the procedure, stipulated by this
Article, upon expiration of the accounting (taxation) period, within which they have made payments to the tax payer.

  2. Tax payers shall submit simplified tax returns by results of the accounting period. Non-profitable companies,
having no obligations of tax payment, shall submit a simplified tax return upon expiration of the taxation period.

   3. Tax payers (tax agents) shall submit tax returns (tax calculations) to 28(th) day since the deadline of the
appropriate accounting period, at the latest. The tax payers estimating amounts of monthly advance payments for
actually received profit, shall submit tax returns in terms established for advance payments (the clause is in the
wording effective since 1 June 2002 according to the Federal Law No. 57-FZ of 29 May 2002, - see the previous
wording).
  4. Tax payers (tax agents) shall submit tax returns (tax calculations) by results of the taxation period to 28(th)
March of the year following the expired taxation period, at the latest (the clause is in the wording effective since 1
June 2002 according to the Federal Law No. 57-FZ of 29 May 2002, - see the previous wording).

  5. The company, incorporating detached divisions, shall submit to local tax bodies the tax return for the company
as a whole with further distribution by the detached divisions upon expiration of each the accounting and taxation
period.



                          Article 290. Details of calculation of banks’ incomes

   1. Bank incomes consist of ones, stipulated by Articles 249 and 250 of this Code, as well as the incomes received
from banks’ activity, stipulated by this Article. Thus, the incomes, stipulated by Articles 249 and 250 of this Code, shall
be calculated in view of the features stipulated by this Article.

   2. The following incomes, resulted from fulfillment of bank activity, shall be referred to banks’ incomes with a view
to this Chapter, in particular:

   1) in the form of interests gained from bank’s funds placing on its own behalf and at own expense, and from
granting of credits and loans;

   2) as a payment for opening and conducting of clients’ bank accounts, including banks - correspondents (including
foreign banks - correspondents), and fulfillment of calculations on their behalf, including commission and other
compensation for transfer, collection, credit and other transactions, registration and service of payment cards and
other special means intended for fulfillment of bank transactions, for granting extracts and other documents pertaining
to accounts and for search of amounts (the paragraph has been supplemented since 1 July 2002 according to the
Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January 2002, - see the previous
wording).

  3) From collection of money resources, bills, payment and settlement documents and clients cash service;

   4) From fulfillment of the transactions with foreign currency both in cash and non-cash forms including commission
fee (compensations) for purchase or sale transactions with foreign currency, including for the account and on behalf of
the client, from operations with currency values (the Clause is in the wording effective since 1 July 2002 according to
the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January 2002, - see the
previous wording).

   To calculate the banks’ income received from transactions of sale (purchase) with foreign currency in the
accounting (taxation) period, a positive difference arisen between the incomes, determined according to Clause 2,
Article 250 of this Code, and the expenses, determined according to Subclause 6, Clause 1, Article 265 of this Code,
shall be accepted (the Subparagraph is in the wording effective since 1 July 2002 according to the Federal Law No.
57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January 2002, - see the previous wording);

   5) On sale and purchase of precious metals and jewels in the form of difference between the price of sale and cost
of discounting;

  6) The Subclause has been excluded since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002;
shall extend to the relations arisen since 1 January 2002, - see the previous wording;
  _____________________________________________________________________________
  Subclause 7 of the previous wording shall be considered as Subclause 6 of this wording since 1 July 2002
according to the Federal Law No. 57-FZ of 29 May 2002. The effect shall extend to the relations arisen since 1
January 2002.
  _____________________________________________________________________________

   6) From operations on granting of bank guarantees, avals and guarantees for third parties stipulating performance
in monetary form (the Clause is in the wording effective since 1 July 2002 according to the Federal Law No. 57-FZ of
29 May 2002; shall extend to the relations arisen since 1 January 2002, - see the previous wording).
   _____________________________________________________________________________
   Subclauses 9 and 11 of the previous wording shall be considered as Subclauses 7 and 8 of this wording since 1
July 2002 according to the Federal Law No. 57-FZ of 29 May 2002. The effect shall extend to the relations arisen
since 1 January 2002.
  _____________________________________________________________________________

   7) As a positive difference between the amount received upon termination or realization (subsequent concession)
of claim (in particular, the one acquired earlier) and cost of discounting of this claim;

  8) From depositary servicing;
  _____________________________________________________________________________
  Subclause 12 of the previous wording shall be considered as Subclause 9 of this wording since 1 July 2002
according to the Federal Law No. 57-FZ of 29 May 2002. The effect shall extend to the relations arisen since 1
January 2002.
  _______________________________________________________________________________

   9) From rent of specially equipped rooms or safes for storage of documents and values (the Subclause is in the
wording effective since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the
relations arisen since 1 January 2002, - see the previous wording);
   _____________________________________________________________________________
   Subclauses 13-19 of the previous wording shall be considered as Subclauses 10-16 of this wording since 1 July
2002 according to the Federal Law No. 57-FZ of 29 May 2002. The effect shall extend to the relations arisen since 1
January 2002.
   _____________________________________________________________________________

   10) As a payment for delivery, transportation of money, securities, other values and bank documents (except for
collection);

  11) As a payment for transportation and storage of precious metals and jewels;

   12) As a payment received by bank from exporters and importers for performance of currency control agents’
functions;

  13) On operations of sale and purchase of collection coins as a difference between the price of sale and purchase;

   14) As the amounts received by the bank for returned credits (loans), whose losses from writing off were
discounted earlier in the structure of the expenses, hence reducing the assessment basis, or the amounts written off
for the account of the created reserves, allocations for whose creation caused reduction of the assessment basis
earlier;

   15) As an indemnification of the expenses incurred by bank in payment of services of outside companies for control
of conformity to standards of precious metals bars received by bank from natural persons and legal entities;

  16) From fulfilled forfeiting and factoring operations;

  17) From rendering services connected to installation and operation of electronic systems of document circulation
between bank and clients, including systems "client - bank" (the Subclause is in the wording effective since 1 July
2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January
2002);

   18) in the form of commission fees (compensations) for operations with currency values (the Subclause has been
added since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen
since 1 January 2002);

   19) As a positive difference arising from excess of positive reassessment of precious metals over negative
reassessment (the Subclause has been added since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May
2002; shall extend to the relations arisen since 1 January 2002);

   20) As the amounts of a restored reserve designated for probable losses under loans, expenses for whose
formation have been accepted in the structure of expenses in the procedure and under conditions established by
Article 292 of this Code (the Subclause has been added since 1 July 2002 according to the Federal Law No. 57-FZ of
29 May 2002; shall extend to the relations arisen since 1 January 2002);

  21) As the amounts of restored reserves under depreciation of securities, expenses on which formation have been
accepted in the structure of expenses in the procedure and under conditions established by Article 300 of this Code
(the Subclause has been added since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall
extend to the relations arisen since 1 January 2002);
   _____________________________________________________________________________
   Subclause 20 of the previous wording shall be considered as Subclause 22 of this wording since 1 July 2002
according to the Federal Law No. 57-FZ of 29 May 2002. The effect shall extend to the relations arisen since 1
January 2002.
   _____________________________________________________________________________

  22) Other incomes pertaining to the bank’s activity.

   3. The amounts of positive reassessment of funds in the foreign currency, received in payment of banks’ authorized
capitals, shall not be included in banks’ income and also insurance payments obtained under insurance contracts in a
case of death or physical disability of the bank’s borrower, within the limits of the debts amounts of the borrower on
extra (credit) funds and the charged interests, repayable by bank at the expense of the specified insurance payments
(the clause is in the wording enforced since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002; the
effect shall extend to the relations arisen since 1 January 2002; is supplemented since 1 January 2006 by the Federal
act N 58-FZ of 6 June 2005, - see the previous wording).




                         Article 291. Details of calculation of banks’ expenses

  1. Along with the expenses, stipulated by Articles 254-269 of this Code, ones shall be referred to the bank’s
expenses incurred at fulfillment of banking activity stipulated by this Article. Thus, the expenses stipulated by Articles
254-269 of this Code, shall be assessed with the features, stipulated by this Article, taken into account.

  2. The following particular expenses incurred due to fulfillment of banking activity shall be referred to the bank’s
expenses with a view of this Chapter:

  1) Interests on:

   the contracts of the bank contribution (deposit) and other borrowed funds of natural persons and legal entities
(including banks-correspondents), including foreign, including for using the funds placed on bank accounts (the
paragraph has been supplemented since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall
extend to the relations arisen since 1 January 2002, - see the previous wording);

  own liabilities (bonds, depositary or savings certificates, bills, loans or other obligations);

  inter-bank credits, including overdraft;

  the acquired refinancing credits, including ones acquired on the auction basis in the procedure established by the
Central Bank of the Russian Federation;

  loans and contributions (deposits) in precious metals;

   other bank’s obligations to clients, including pertaining to funds deposited by clients for settlements under letters of
credit (the paragraph has been added since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002;
shall extend to the relations arisen since 1 January 2002);

   The interests charged according to this Clause on inter-bank credits (deposits) on the term up to 7 days
(inclusively) shall be taken into account for calculation of the assessment basis with negligible provisions of Clause 1
Article 269 of this Code proceeding from actual validity of contracts;

   2) The amounts of allocations to reserve designed for probable losses under loans subject to reservation in the
procedure established by Article 292 of this Code;

  3) The Subclause has been excluded since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002;
shall extend to the relations arisen since 1 January 2002, - see the previous wording;
  _____________________________________________________________________________
  Subclause 4 of the previous wording shall be considered as Subclause 3 of this wording since 1 July 2002
according to the Federal Law No. 57-FZ of 29 May 2002. The effect shall extend to the relations arisen since 1
January 2002.
  _____________________________________________________________________________

   3) Commission fees for services pertaining to correspondent relations, including expenses on clients’ cash
servicing, opening of clients’ accounts in other banks, payment to other banks (including foreign) for cash service of
these accounts, settlement services of the Central Bank of the Russian Federation, collection of money, securities,
payment documents and other similar expenses (the Subclause has been supplemented since 1 July 2002 according
to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January 2002, - see the
previous wording);
   _____________________________________________________________________________
   Subclause 5 of the previous wording shall be considered as Subclause 4 of this wording since 1 July 2002
according to the Federal Law No. 57-FZ of 29 May 2002. The effect shall extend to the relations arisen since 1
January 2002.
   _____________________________________________________________________________

  4) Expenses (losses) incurred as the result of transactions with the foreign currency, carried out either in cash or
non-cash, including commission fees (compensations) at foreign currency purchase or sale, including for the account
and on behalf of the client, of transactions with currency values and expenses for control and protection against the
exchange rate risk (the Subparagraph is in the wording effective since 1 July 2002 according to the Federal Law No.
57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January 2002, - see the previous wording);

   For calculation of banks’ expenses, caused by sale (purchase) transactions with foreign currency in the accounting
(tax) period, the negative difference arisen between the incomes calculated according to Clause 2, Article 250 of this
Code and the expenses, determined according to Subclause 6, Clause 1 of Article 265 of this Code, shall be accepted
(the Subparagraph is in the wording effective since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May
2002; shall extend to the relations arisen since 1 January 2002, - see the previous wording);
   ____________________________________________________________________________
   Subclause 6 of the previous wording shall be considered as Subclause 5 of this wording since 1 July 2002
according to the Federal Law No. 57-FZ of 29 May 2002. The effect shall extend to the relations arisen since 1
January 2002.
   _____________________________________________________________________________

    5) Losses suffered in connection with operations of sale and purchase of precious metals and jewels as a
difference between the price of sale and cost of discounting;

  7) The Subparagraph has been excluded since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May
2002; shall extend to the relations arisen since 1 January 2002, - see the previous wording;
  _____________________________________________________________________________
  Subclauses 8-18 of the previous wording shall be considered as Subclause 6-16 of this wording since 1 July 2002
according to the Federal Law No. 57-FZ of 29 May 2002. The effect shall extend to the relations arisen since 1
January 2002.
  _____________________________________________________________________________

   6) Banks’ expenses for storage, transportation, control of conformity with the quality standards of precious metals
in bars and coins, expenses for precious metals’ refining, and other expenses related to fulfillment of operations with
precious metals bars and coins;

  7) Expenses incurred in connection with transfer of pensions and allowances, and also expenses on transfer of
money without opening of natural persons’ accounts;

  8) Expenses on manufacturing and introduction of payment and account means (Charge Cards, traveler’s cheques
and others);

   9) The amounts being paid for collection of banknotes, coins, checks and other payment and account documents,
and also expenses on packing (including acquisition of cash), transportation, transfer and (or) delivery of values
belonging to the credit company or its clients;

   10) Expenses on repair and (or) restorations of the collector’s bags, sacks and other stock relevant to money
collection, transportation and storage of values, and also to purchase of new and replacement of worn-out bags and
sacks;

   11) The expenses related to mortgage state registration fee and to making amendments and addenda to
registration record on the mortgage, and also to notary certifying of the contract for mortgage;
  12) Expenses incurred in connection with motor transport rent for collection of proceeds and transportation of bank
documents and values;

  13) Rental expenses of broker places;

  14) Services cost of cash and computer centers;

  15) The expenses pertaining to forfeiting and factoring operations;

  16) Expenses on guarantees, warranties, acceptances and avals, given to bank by other companies;

   17) Commission fees (compensations) for operations with currency values, including for the account and on behalf
of clients (the Subclause has been added since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002;
shall extend to the relations arisen since 1 January 2002);

   18) A positive difference between the negative and positive reassessment of precious metals (the Subclause has
been added since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations
arisen since 1 January 2002);

  19) The amounts of allocations to a reserve for probable losses under loans, expenses on which formation have
been discounted in the structure of expenses in the procedure and under conditions, established by Article 292 of this
Code (the Subclause has been added since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002;
shall extend to the relations arisen since 1 January 2002);

  20) The amounts of allocations to reserves against depreciation of securities, expenses on which formation have
been discounted in the structure of expenses in the procedure and under conditions established by Article 300 of this
Code (the Subclause has been added since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002;
shall extend to the relations arisen since 1 January 2002);

  20_1) The amounts of insurance payments of banks, established according to the federal act on insurance if
deposits of natural persons in the banks of the Russian Federation (the subclause has been added since 1 January
2005 by the Federal act N 178-FZ of 23 December 2003);
  ____________________________________________________________________________
  The effect of subclause 20_1 of clause 2 of this article (in the wording of the Federal act N 178-FZ of 23 December
2003) shall extend to the relations arisen since 1 January 2004 - see article 4 of the Federal act N 58-FZ of 6 June
2005.
  _____________________________________________________________________________

   20_2) The amounts of insurance payments under insurance contracts in a case of death or physical disability of the
bank’s borrower in which the bank is beneficiary, under condition of indemnification of these expenses by borrowers
(the subclause has been added since 1 January 2006 by the Federal act N 58-FZ of 6 June 2005).
   ____________________________________________________________________________
   Subclause 19 of the previous wording shall be considered as Subclause 21 of this wording since 1 July 2002
according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January 2002.
   ____________________________________________________________________________

  21) Other expenses relevant to bank activity.

   3. The amount of negative reassessment of funds in the foreign currency, entered in payment of the authorized
capitals of credit companies, shall not be included in bank’s expenses (the Clause is in the wording effective since 1
July 2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1
January 2002, - see the previous wording).




                   Article 292. Expenses caused by formation of banks’ reserves

   1. With a view of this Chapter, banks have the right, except for reserves for doubtful debts, stipulated by Article 266
of this Code, to built up a reserve for probable losses incurred under loans by loan and equal indebtedness (including
the debt on inter-bank credits and deposits (hereinafter referred to as reserves for probable losses by loans) in the
procedure, stipulated by this Article (the Subparagraph is in the wording effective since 1 July 2002 according to the
Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January 2002, - see the previous
wording).

   The amounts of allocations to reserves on probable losses under the loans, generated in the procedure established
by the Central Bank of the Russian Federation according to the Federal Law “On the Central Bank of the Russian
Federation (the Bank of Russia)”, shall be deemed by the expenses in view of the limitations stipulated by this Article
(the Subparagraph is in the wording effective since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May
2002; shall extend to the relations arisen since 1 January 2002, - see the previous wording).

   Upon calculation of the assessment basis, the expenses in the form of allocations to the reserves for probable
losses under the loans, generated by banks under the debts categorized as standard in the procedure, established by
the Central Bank of the Russian Federation, and also to the reserves for probable losses under the loans, generated
under bills, shall not be taken into account, except for the discounted third parties’ bills, whose non-payment has been
protested (the Subparagraph is in the wording effective since 1 July 2002 according to the Federal Law No. 57-FZ of
29 May 2002; shall extend to the relations arisen since 1 January 2002, - see the previous wording).

   2. The amounts of allocations to a reserve for probable losses under the loans, generated in view of the provisions
of Clause 1 of this Article shall be included in the structure of the off-sale expenses during the accounting (tax) period
(the Clause is in the wording effective since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002;
shall extend to the relations arisen since 1 January 2002, - see the previous wording).

    3. The amounts of reserves for probable losses on loans, referred to bank’s expenses and incompletely used by
the one in the accounting (tax) period for covering losses on hopeless loan debts and the debts equal to loan, can be
transferred to the next accounting (tax) period. Thus, the amounts of newly created reserve should be adjusted to the
amounts of the remaining reserve of the previous accounting (tax) period. In case the amount of newly created
reserve in the accounting (tax) period is less, than the remaining reserve of the previous accounting (tax) period, a
difference should be included in the structure of bank’s incomes on the last day of the accounting (tax) period. In case
the amount of newly created reserve is above the remaining reserve of the previous accounting (tax) period, a
difference should be included in the off-sale expenses of banks on the last day of the accounting (tax) period (the
Clause is in the wording effective since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall
extend to the relations arisen since 1 January 2002, - see the previous wording).



                  Article 293. Features of calculation of incomes of the insurance
                                        companies (insurers)

   1. The incomes of an insurance company shall cover the proceeds gained from insurance activity along with the
ones, stipulated by Articles 249 and 250 of this Code, to be determined in view of peculiarities stipulated by this
Article.

   2. The following incomes of insurance activity shall be referred to incomes of insurance companies with a view of
this Chapter:

   1) Insurance premiums (contributions) under insurance, co-insurance and reinsurance contracts. Thus, insurance
premiums (contributions) under co-insurance contracts shall be included in the structure of incomes of an insurer (co-
insurer) only at a rate of his insurance premium share fixed in the contract of co-insurance;

  2) The amounts of reduction (return) of insurance reserves formed in previous accounting periods in view of
change in re-insurer’s share of insurance reserves;

  3) Compensations and employees bonuses (the form of compensation of the insurer from the part of the re-insurer)
under the reinsurance contracts;

  4) Compensations paid by insurers under the co-insurance contracts;

   5) The amounts paid by re-insurers in compensation for insurance payments shares on the risks handed to
reinsurance;

  6) The amounts of interests on premiums stock on the risks accepted for reinsurance;
  7) Incomes of realization of the insured’s (beneficiary’s) claim to the persons responsible for causing damage
passed to the insurer according to current legislation;

   8) The amounts of sanctions for default of terms and conditions of the insurance contracts, which the debtor
recognized voluntary or upon court judgment (the Subclause is in the wording effective since 1 July 2002 according to
the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January 2002, - see the
previous wording).

  9) Compensations for rendering the insurance agent’s and the broker’s services;

   10) The compensations received by the insurer for rendering surveyor’s services (survey of the property accepted
in insurance and issue of the conclusions on calculation of the insurance risk) and the emergency commissioner
(definition of reasons, character and amounts of losses upon insurance event);

   11) The amounts of return of a part of insurance premiums (contributions) under contracts of reinsurance in case of
their early termination (the Subclause is in the wording effective since 1 July 2002 according to the Federal Law No.
57-FZ of 29 May 2002; shall extend to the relations arisen since 1 January 2002).
   _____________________________________________________________________
   Subclause 11 of the previous wording shall be considered as Subclause 12 of this wording since 1 July 2002
according to the Federal Law No. 57-FZ of 29 May 2002. The effect shall extend to the relations arisen since 1
January 2002.
   _____________________________________________________________________

  12) Other incomes received at realization of insurance activity.



          Article 294. Features of calculation of the expenses incurred by insurance
                                     companies (insurers)

   1. Expenses of an insurance company shall comprise in addition to the ones stipulated by Articles 254-269 of this
Code, the expenses incurred at fulfillment of the insurance activity stipulated by this Article. Thus, the expenses,
stipulated by Articles 254-269 of this Code, shall be estimated in view of the features stipulated by this Article.

  2. The following expenses incurred at fulfillment of insurance activity shall be referred to insurance companies’
expenses for this chapter purposes:

   1) The amounts of allocations to insurance reserves (in view of change in the reinsurer’s share in insurance
reserves), being formed on the basis of legislation on insurance in the procedure approved by the RF Ministry of
finance (the subclause is in the wording enforced since 2 August 2004 by the Federal act N 58-FZ of 29 June 2004, -
see the previous wording);

  1_1) sums of deductions to the reserve of guarantees and reserve of current compensation pay-outs formed in
accordance with the RF legislation on obligatory insurance of civil responsibility of owners of transport means at the
amounts established in conformity with the insurance tariff structure (the subclause has been added since 1 February
2005 by the Federal Act N 204-FZ of 29 December 2004, the effect shall apply to legal relations arising from 1 July
2003);

   1_2) sums of deductions to the reserves (funds) formed according to the requirements of the international systems
of obligatory insurance of civil responsibility of owners of transport means, which the Russian Federation has joined
(the subclause has been added since 1 February 2005 by the Federal Act N 204-FZ of 29 December 2004, the effect
shall apply to legal relations arising from 1 July 2003);

   2) Payments of rents under insurance, co-insurance and reinsurance contracts. Payment of rent, annuities,
pensions and other payments stipulated by terms and conditions of the insurance contract, shall be referred to
insurance payments for this Chapter’s purposes;

   3) The amounts of insurance premiums (contributions) on the risks handed over to reinsurance. Provisions of this
Subclause shall apply to the contracts of reinsurance signed by Russian insurance companies with Russian and
foreign reinsurers and brokers;
   4) Compensations and bonuses due to employees under reinsurance contracts (the Subclause is in the wording
effective since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the relations
arisen since 1 January 2002, - see the previous wording).

   5) The amounts of interests on the premiums stock on the risks handed over for reinsurance (the Subclause is in
the wording effective since 1 July 2002 according to the Federal Law No. 57-FZ of 29 May 2002; shall extend to the
relations arisen since 1 January 2002, - see the previous wording).

  6) Compensations for reinsurer under the reinsurance contracts;

  7) Return of a part of insurance premiums (contributions), and repurchasing amounts under insurance co-insurance
and reinsurance contracts in the cases stipulated by legislation and (or) terms and conditions of the contract;

  8) Compensations for rendering insurance agent’s and (or) the insurance broker’s services;

   9) Expenses on payment of companies’ or individual natural persons’ services rendered in connection with
insurance activity, including:

  Actuaries’ services;

  Medical inspection at the conclusion of contracts of life and health insurance provided that the insurer pays for such
medical inspection according to contracts;

  The detective services rendered by properly licensed companies pertaining to ascertainment of insurance
payments’ validity;

   Specialists’ services (including experts, surveyors, emergency commissioners, lawyers), involved with assessment
of the insurance risk, determination of the insurance cost of the property and amounts of the insurance payment,
calculation of consequences of the insurance cases, settlement of insurance payments;

   Services relevant to manufacturing of the insurance certificates (policies), strict reporting forms, receipts and other