September 2002

This material is provided for information purposes only under a grant from USAID through Development Alternatives Inc. Russian Microfinance Center, Development Alternatives Inc. and USAID shall not be liable for any damage to any organization's property due to any use of explanations, conclusions and interpretations of effective legislation contained herein.
Author: LEGEM PERFERRE
Short Version: Russian Microfinance Center

RF Tax System

In September 2002, like in the previous months, the RF Ministry of Taxes and Charges issued a great number of orders. Some of them are not regulatory and legal acts as they contain only recommendations for tax code application. However, these orders are obligatory for local tax authorities. That is why they are of interest to taxpayers.

Among the approved regulatory and legal acts of the Ministry of Taxes and Charges we ought to mention the orders referring to small business entities. The Ministry of Taxes and Charges and the Ministry of Finance issued a joint order to approve the new Procedure for accounting of income/expenses and economic operations of private as well as a new form for the Book of Record. Since the Book of Record reflects the status of private and their business performance in the taxation period, this document can be used by microfinance organization when making a decision to grant a loan to a private entrepreneur.

In September, the profile committee of the State Duma (State Duma Committee for budget and taxes.) focused on the preparation and approval of the Federal budget law for 2003, that is why tax laws were not considered by the Duma. In October, the Committee for budget and taxes is planning to prepare a new wording of the Customs Code for the second reading in the Duma.

Approved regulatory legal acts

• Order # ÁÃ-3-02/458 of the Ministry of taxes and charges of the Russian Federation as of August 21, 2002 "On the approval of Methodological recommendations for tax base calculation in accordance with article 10 of Federal law # 110-Ô3 of August 6, 2001".
  The text of this Order was published in a weekly supplement to the newspaper "Accounting. Taxes. Law." - "Official documents " of September 4, 2002, # 32.
  • In connection with the enactment of chapter 25 of the Tax Code of the Russian Federation, after a great delay, the Ministry of taxes and charges approved Methodological recommendations to calculate tax bases for the "transition period" in accordance with Article 10 of Federal law # 110-ÔÇ of August 6, 2001.
  • The recommendations describe separately the procedure of tax base calculation for organizations shifting to the charge method of determining income and expenses and to organizations shifting to cash method of determining income and expenses.
  • They specify in detail the procedure for tax calculation in the "transition period".
• Order # ÁÃ-3-03/416 of the Ministry of taxes and charges of the Russian Federation of August 6, 2002 "On introduction of changes and amendments to Order # ÁÃ-3-03/25 of Ministry of taxes and charges of the Russian Federation of January 21, 2002".
  Registered in the Ministry of Justice of the Russian Federation on September 5, 2002. Registration number # 3777.
  The text of the order was published in the newspaper "Rossiyskaya Gazeta" of September 12, 2002, # 172.
  • In connection with the approval of new forms of VAT declaration in July 2002, amendments were made to Instruction for filling in VAT declaration.
• Order # ÂÃ-3-03/491 of the Ministry of taxes and charges of the Russian Federation of September 17, 2002 "On introduction of changes and amendments to Order # ÁÃ-3-03/447 of Ministry of taxes and charges of the Russian Federation of December 20, 2000".
  The text of this Order was published in a weekly supplement to the newspaper "Accounting. Taxes. Law." - "Official documents " of September 25, 2002, # 35.
  • Introduction of changes and amendments to Methodological recommendations concerning chapter 21 in connection with "technical" law # 57-ÔÇ of May 29, 2002.
  • Among the most important amendments to Methodological recommendations we ought to mention changes concerning VAT payments on business travel expenses. According to the Ministry of Taxes and Charges, starting form July 1, 2002 to justify the right for VAT deductions, the following documents are neccesry: invoices for hotel services and invoices for bedding in trains (not included in a railway ticket); VAT amount should be indicated in the ticket price.
• Order # ÁÃ-3-10/411 of the Ministry of taxes and charges of the Russian Federation of August 5, 2002 "On the approval of Recommendations for keeping personal account cards of taxpayers, toll payers and tax agents by tax bodies".
  The text of this Order was published in a weekly supplement to the newspaper "Accounting. Taxes. Law." - "Official documents " of September 25, 2002, # 35.
  • Recommendations for tax bodies describe the procedure for reflecting taxpayers/tax agents payments to budgets of all levels in personal account cards (in the section tax, charge or fee).
  • The personal account card reflects the following data:
    - Amounts of taxes and charges calculated by taxpayers and claimed by tax authorities;
    - Amounts of taxes and charges paid to the budget;
    - Amounts charged for late/incomplete payment of taxes/chaeges and paid penalties;
    - Return or accounting of overpaid/overcollected taxes or tolls, etc.
  • Accountants may be interested in the Provision for verification of budget payments calculation. The form of verification certificate was approved by this order. Attached is a sample of such a certificate filled by the tax bodies.
• Order # ÁÃ-3-29/465 of the Ministry of taxes and charges of the Russian Federation of August 29, 2002 "On improvement of the work of tax bodies to recover tax debts".
  Registered in the Ministry of Justice of the Russian Federation on September 26, 2002. Registration number # 3817.
  
  • The following forms were approved to be used by tax bodies:
    - The form of a resolution to enforce the payment of taxes/charges/penalties from the funds available on bank accounts of the taxpayer - organization or tax agent of this organization ;
    - Form of a tax payment claim;
    - Form of a tax penalty payment claim;
    - Form of a resolution to suspend operations on the bank accounts of a taxpayer or tax agent;
    - Form of a resolution to cancel the suspension of operations on bank accounts of taxpayer or tax agent.

• Information message of the Bank of Russia of September 5, 2002.
  Information was published in "Vestnik of the Bank of Russia" on September 18, 2002, #51.
  • This document informs that by decision of the Board of Directors of the Bank of Russia its Central department for inspection of credit organizations was entrusted with the task to audits credit organizations on the territory of the Russian Federation.
  • The Central department for inspection of credit organizations is to develop and implement new approaches to conducting audits of credit organizations.
  • In the near future the Bank of Russia will introduce the Institute of Chief Inspectors who will be responsible for inspection issues in local subdivisions of the Bank.

• Draft of the Main guidelines of the uniform federal finance-credit policy for 2003 (submitted by the Central Bank of the Russian Federation).
  • The Bank of Russia highlighted the following objectives in the sphere of bank sector for 2003:
    - To create a system of deposits guarantees;
    - To complete preparations for credit organizations' shift to international standards of accounting and financial reporting; they will be effective from January 1, 2004;
    - To prepare and approve a package of legal amendments to create a more favorable environment for banking activities;
    - To improve the regulatory and supervisory provisions of the Bank of Russia.
  • To achieve these objectives, the Bank of Russia plans to prepare proposals to introduce changes into a number of laws, such as "On the Central Bank of the Russian Federation (the Bank of Russia)", "On banks and banking activity", "On Accounting" and other legal acts, as well as to revise some of its Instructions.
  • The plans of the Central Bank also include steps to simplify the instructions connected with bank crediting of small . Specifically, the Bank of Russia intends to simplify the procedure of credit risk evaluation and reserve formation to compensate for losses in small loans.
  • In the exchange rate policy, the Bank of Russia plans to stick to floating rate of exchange.
• Draft of the Federal Law "Amendments to Article 73 of the Federal Law "On the Central bank of the Russian federation, the Bank of Russia" (was introduced by deputies of the State Duma of the Russian Federation)
  • The draft suggests to extend the grounds for repeated inspections of credit organizations by the Central bank in the same area of operations and the same reporting period. Such repeated inspections can be approved by the decision of the Board of Directors made in accordance with a justified request from a local/territorial subdivision of the Central bank of Russia.

• Resolution #154 of the State Committee for Statistics of the Russian Federation "On the approval of the Provision to submit statistical data required for state statistical records"
  Registered in the Ministry of Justice of the Russian federation on August 27, 2002. Registration number ¹ 3744.
  The text of this resolution was published in "Rossiyskaya gazeta" on September 4, 2002, # 166.
  • This provision prescribes the procedure of submitting statistical data by legal entities and their branches and representative offices, as well as by individual .
  • The Provision specifies the terms of this data submission in electronic files. If these requirements are not met, electronic statistical data is deemed not submitted.

• Decree ¹ 1188-Ó of the Central bank of the Russian Federation of August 20, 2002 "On introduction of changes and amendments to regulatory acts of the Bank of the Russian Federation concerning exchange regulation and control".
  Registered in the Ministry of Justice of the Russian Federation on September 19, 2002. Registration ¹ 3808.
  The text of this Decree is published in "Vestnik of the bank of Russia" on September 25, # 52, and in "Rossiyskaya gazeta" on September 26, # 182.
  • The Central Bank of the Russian Federation extends a list of exchange operations to be performed by physical persons without permission of the Bank of Russia. Specifically, no permit is needed for natural persons-residents (with the exception of individual ) to transfer currency from Russia and to natural persons-residents (except for individual ) in Russia for current expenses.
  • A list of current expenses is not fixed in the Provision and remains open. The only restriction is that such transfer shall not be connected with business or investment operations and purchase of immovable property rights.
  • Transfers for current expenses from Russia are limited to $2,000; they can be made one time during an operational day through one authorized bank (or its branch). The amount of transfer for current expenses in Russia is not restricted.
  • To receive foreign currency transfer for current expenses, a natural person-resident is to submit to the authorized bank the following documents:
    - an application according to a fixed form;
    - certifying documents, if the law requests that this transaction shall be made in writing.
• Decree of the Central bank of Russia of September 5, 2002 # 1192-Ó "The procedure for selling currency of the internal money-market of the Russian Federation "
  Registered in the Ministry of Justice of the Russian Federation on September 17, 2002. Registration number ¹ 3806.
  The decree becomes effective on December 1, 2002.
  • This decree allows residents to sell foreign currency through the authorized bank on interbank stock exchanges and off-board interbank currency market, as well as directly to the authorized bank.
  • Thus, the Decree extends residents' options in the process of obligatory sales of part of export earnings because at present such currency is to be sold only on interbank stock exchanges.
• Provision of the Central Bank of the Russian Federation ¹ 193-Ï of August 20, 2002 "On introduction of changes and amendments to provision # 62 of the bank of the Russian federation of June 25, 1997 "Procedure for purchase and receipt of foreign currency to pay travel allowances"
  Registered in the Minister of Justice of the Russian Federation on September 3, 2002. registration # 3769.
  The text of this Provision is published in "Vestnik of the bank of Russian on September 18, 2002 # 51, and in "Rossiyskaya gazeta" on September 18, 2002, # ¹ 176.
  • Technical changes are introduced in connection with entrusting the RF Ministry of Finance with the functions of ÂÝÊ, Russia.
  • Also, some changes has been made to form # 0406007, which certifies the right of its owner to remove the currency paid as travel allowance from the territory of the Russian federation.
• Information letter of the Central bank of the Russian Federation #19 of September 2002 "Summarizing the practices of using the acts of the Bank of the Russian Federation concerning exchange control"
  The text of this letter was published in "Vestnic of the Bank of Russia" on September 25, 2002 # 52.
  • The letter clarifies some issues connected with the following:
    - Settlements between non-residents via bank accounts in roubles opened in the authorized banks (Instruction of the Central bank of the Russian Federation # 93-È of October 12, 2000;
    - Opening and using bank accounts in foreign banks outside the Russian Federation by physical persons-residents (Instruction of the Central bank of the Russian Federation of August 29, 2001, ¹ 100-È).

• Provision #696 of the RF government of September 23, 2002 "On the approval of federal rules (standards) of audit".
  The text of the order was published in a weekly supplement to the newspaper "Accounting. Taxes. Law" - "Official documents" of October 2, 2002, #36.
  • Six rules (standards) of audit have been approved:
    - Rule (standard) # 1. The purpose and guidelines of auditing financial (accounting) documents;
    - Rule (standard ) # 2. Documentation of audit;
    - Rule (standard) # 3. Audit planning;
    - Rule (standard) # 4. Important points of audit;
    - Rule (standard) # 5. Audit evidence (proof);
    - Rule (standard) # 6. Audit statement on financial (accounting) operations.
  • The standards take into account international audit standards and set uniform audit goals, requirements and guidelines.

Appendix 1