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The Statute clearly specifies the documentation to substantiate the fact of a business trip. It is mandatory that a report, in written form, on the work performed during the business trip should be submitted.

An overview of the normative documents on the issues of taxation adopted in September October L Anisimova 1. By Federal Law of 13 October 2008, No 172 FZ, the period for payment of VAT has been changed. It grants the possibility of paying VAT in equal installments over the period of three months.

2. By Letter of the RF Ministry of Finance of 22 September 2008, No 03-02-07/1-30, it is clarified that, in accordance with Paragraph 2, Item 1, Article 78 of the RF Tax Code, as amended by Federal Law of 27 July 2006, No 137 FZ, the amount of excess tax payments should be set off against the tax payments at the same level (federal taxes against payments at the federal level, regional against regional payments, and local against local payments). According to the Ministrys clarification, as the single social tax and VAT are classed in the category of federal taxes, the amount of excess single tax paid may be set off against VAT payments.

3. By Letter of the RF Ministry of Finance of 24 September 2008, No 03-03-06/2/127, clarifies the issue concerning the procedure for taxing profit in the event of a participants withdrawal from a limited responsibility society. When a participant withdraws from a limited responsibility society, the participatory share of that participant should pass to the society, which is obliged to pay him the actual value of the share as determined on the basis of the data of bookkeeping reports for a given reporting (current) year; or, by the participants consent, to issue property in kind to him for such value, and in the event when his participatory share in the authorized capital of the society has not been paid in full to repay to the participant the amount actually contributed to the authorized capital of the company.

According to the RF Ministry of Finance, if the value of the property issued to the participant on his withdrawal from the society is less than the value of the participants participatory share, the society thus receives non-realization income, which should be recorded in accounting documents for purposes of profit taxation. This rule is also to be applied to the difference in estimated value arising in the event of amortizable property being returned to the participant at its residual value.

(Note. Despite the existence of other views in the expert community, and certain decisions made by courts of lower instances, the stand taken by the RF Ministry of Finance with regard to this issue seems to be justified from the point of view of economics. Previously, the wear and tear of amortizable property was to be charged to a societys costs, and then transformed, through the income received from product realization, into the limited responsibility societys own capital. In this case, the taxable current income was equal to zero, because the tax base was simultaneously diminished by the amount of the charged amortization, i.e. tear and wear. Presently, in the event of property being returned to the withdrawing participant at its residual value, the value of tear and wear previously charged to a limited responsibility societys costs should be restored and charged to its taxable income as of the date of that participants withdrawal.

The opponents of this point of view refer in their arguments to the standpoint of the Federal AntiMonopoly Service of North Western Okrug, reflected in its Resolution of 18 September 2006, No AO5-17306/2005-33, issued in connection with a similar situation. The Service came to the conclusion that the society in question had had no reason to charge to costs the cost of payment for the participatory share of the societys withdrawing participant, because the withdrawing participant did not charge to its income the value of the property it had received when withdrawing from the limited responsibility society, within the limits of its initial contribution. In accordance with Article 41 of the RF Tax Code, revenue should be deemed to be the advantage in monetary form or in kind. In the situation under consideration, the society meets its obligations to the withdrawing participant and, consequently, gains no economic advantage. Therefore no income emerges in the course of such a transfer of property.

The duality of this position manifests itself in the fact that a judicial body analyzes the situation only from the point of view of the relations arising between a society and its participant, without taking into consideration the fact of realization of property. We believe that the other side of the problem should also be analyzed: tear and wear was previously transformed into taxfree income, and therefore into the capital of the society, because the latter had appropriated part of the income from realization of its products, and the tax base had been formed with the deduction of depreciation. If the society returns certain property with taking into account its depreciation but without its capitalization being changed, it should reverse the previously performed deduction from the tax base by the amount of depreciation, and to pay tax on this income.

4. By Letter of the RF Ministry of Finance of 24 September 2008, No 03-11-04/2/147, the issue of the possibility for municipal unitary enterprises (MUEs) to switch over to the regime of paying the single tax on presumptive income (STPI), or to the simplified system of taxation (SST, incomes less costs) has been clarified.

The Ministry of Finance explains that the provisions of Subitem 14 of Item 3 of Article 346.12 of the RF TC, and of Item 2.2 of Article 346.26, in accordance with which it is not allowed for the simplified system of taxation to be applied by those organizations where the share of direct participation by other organizations comprises more than 25 %, should not be applicable to MUEs. This is because the founders of MUEs, with 100-percent stakes, are municipal formations represented by their bodies of local self government.

As the municipal formation is a body of authority, it cannot be recognized as an organization.

Therefore, the said restriction should not be applicable to MUEs. This has also been pointed out in Decision of the Supreme Arbitration Court of the Russian Federation of 19 November 2003, No 12358/03. Therefore, MUEs have the right to apply both SST and STPI.

5. Letter of the RF Ministry of Finance of 26 September 2008, No 03-03-06/1/546, clarifies the issues of charging to costs, for purposes of calculating the profits tax, the severance payment provided to an employee being dismissed for reasons not envisaged in Article 178 of the RF TC.

As the RF TC contains no restrictions concerning the provision of severance payments, in the event of the existence of an additional agreement attached to a labor contract, which stipulates the provision of severance payment to the employee being dismissed for reasons not envisaged in Article 178 of the RF TC, such expenses also may be charged to costs when determining the tax base of the tax on profit of organizations, irrespective of the reasons for the dissolution of the labor contract. These amounts should be taxed by the personal income tax and the single social tax in accordance with the generally established procedure.

6. Letter of the RF Ministry of Finance of 23 September 2008, No 03-05-05-04/23, clarifies the issue of the procedure for calculating the transport tax in the event of a transport vehicle having been listed in the fixed assets of an organization for less than one month (including for periods of up to one day, when it is included in the fixed assets that were used under a financial lease contract before being sold because of its non-profitability). When considering such a situation, the RF Ministry of Finance has explained that, in accordance with Item 3, Article 362 of the RF TC, in cases when a transport vehicle is being registered or excluded from the state register, the sum of the tax (or the sum of the advance payment of the tax) should be computed by applying the coefficient defined as the ratio of the number of full months during which the aforesaid transport vehicle was registered as belonging to a given taxpayer to the number of calendar months included in the tax (or reporting) period. In the event of a transport vehicle having been registered and excluded from the state register in the course of one calendar month, this said month should be deemed to be recognized as one full month. Therefore, the organization, which has registered and removed a transport vehicle from the traffic police register in the course of one calendar month, must apply the 1/12 coefficient when calculating the sum of the transport tax.

7. Letter of the RF Ministry of Finance of 23 September 2008, No 03-03-06/1/539, clarifies the issue of applying the provision concerning the simultaneous charging to costs of up to 10 % of capital investments in the event of putting into service an object, the construction or reconstruction of which has been completed.

In accordance with Articles 158 and 259 of the RF TC, the depreciation of an object of depreciable property should be charged beginning from the first day of the month during which the aforesaid object was put into service, and in the event of the rights for the fixed assets being subject to state registration from the moment of the documentarily confirmed fact of the relevant documents having been submitted for the registering the aforesaid rights (as a rule, an inventory marked by the registering body and bearing the date of the documents acceptance for consideration).

8. Letter of the RF Ministry of Finance and the RF Federal Tax Service of 14 October 2008, No MM-3-2/467@, introduces an alteration into Order of the RF Federal Tax Service of 14 October 2008, No MM-3-2/467@, on the Concept of Tax Verifications.

According to the Concept, the planning of tax verifications on-site is an open process, based on the selection of taxpayers for the purpose of carrying out tax verifications on-site in accordance with the criteria for estimating the existence of the risks of tax abuses having been committed, including with the application of generally established criteria. Previously, the planning of tax verifications on-site was a strictly internal, confidential procedure of the tax authorities.

9. Letter of the RF Ministry of Finance and the RF Federal Tax Service of 29 September 2008, No ShT-15-3/1078, clarifies the issues of levying VAT, profits tax, personal income tax and SST in the event of grants being received or transferred, and of the taxation of the grants being received or transferred.

As far as VAT is concerned, the RF Ministry explains that the provision of grants does not fall into the category of operations aimed at realization of goods, work and services, and therefore should no be subject to levying VAT - either on the grant-providers or the grantees side.

As regards the profits tax, a grant represents a free-of-charge transfer of the grant-providers own funds (i.e., as any gift, it is paid for after taxation); in this sense it is not part of costs. So, far as the grant receiver is concerned, the funds received by him or her within the framework of the grant should be considered as targeted financing, and in this sense they should not be taxed. However, it should be borne in mind that the RF Civil Code does not extend gift relations to those relations where one of the parties is a commercial organization. In this connection, so far as property received from commercial organizations (Russian and foreign) and foreign physical persons is concerned, is not deemed to be a grant for purposes of taxation. The situation with non-spreading grant-provision relations to foreign organizations (excepting the intergovernmental organizations directly named in normative acts) and physical persons is also explainable from a juridical point of view the jurisdiction of the RF Civil Code does not spread to these persons, either.

In accordance with Federal Law of 32 March 2007, No 38-FZ, alterations are introduced into the RF Tax Codes Article 217, which addresses personal income tax. From 1 January 2008 onwards, the sums being received by taxpayers in the form of grants (or free assistance) should be excluded from the tax base of personal income tax, when they are provided for the purpose of supporting science, education and the arts in the Russian Federation - not only by international and foreign organizations, but also by the Russian organizations included in the list of such organizations approved by the RF Government.

At the same time, the sum of the grant should be subject to SST (with the exception of the part related to the payments to the RF Social Insurance Fund). However, if the receiver of a grant, in the course of performing work (or rendering services) at the expense of the grant in accordance with its purpose, incurs any costs which he or she cannot substantiate by relevant documents, the sum of the grant used to reimburse such costs should not be taxed by SST in accordance with Subitem 2 of Item 1 of Article 238 of the RF TC.

10. Letter of the RF Ministry of Finance and the RF Federal Tax Service of 29 September 2008, No ShT-6-2/675@, clarifies the issue of the procedure by which tax agencies should demand and obtain from credit institutions the documents instrumental in performing tax control.

In accordance with the RF TC, banks are obliged to submit, upon a reasonable request by a tax agency, relevant references with regard to the presence of accounts and (or) to account balances of organizations (or individual entrepreneurs), as well as statements of their operations, within five days after the receipt of the said request from the tax agency.

The problem consists in the fact that such requests must be reasonable, while the RF TC does not clarify this term. Therefore, the RF Ministry of Finance and the RF Federal Tax Service recommend that, when formulating a request to be issued to a bank, a tax agency should motivate it by the reason of performing tax control measures with regard to a given organization (or an individual entrepreneur, or a private notary, or a lawyer who has opened a private office).

11. Letter of the RF Ministry of Finance and the RF Federal Tax Service of 25 September 2008, No ChD-6-6/671@, clarifies the issues of application of the All-Russian Classifier of the Types of Economic Activity (ARCTEA).

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