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The central issue discussed at the RF Governments meeting on 23 November was the problems of improving the administration of VAT. The meeting heard RF Minister of Finance S. Shatalins report on the situation in the sphere of VAT administration and the measures aimed at its further improvement. It was noted at the meeting that the excess of the rate of growth of VAT deductions over the VAT accruals in the first six months of 2006 amounted to 5.1 %, while in the year 2005 this excess amounted to only 1.6 %. The volume of funds returned on the claims filed by dishonest VAT payers amounted to approximately 30 billion roubles. At the same time, the excess of the rate of growth of VAT deductions over VAT accruals is also conduced to by a number of factors32. In order to solve the The master plan of measures aimed at implementing the major provisions of the RF Presidents message to the Federal Assembly of the Russian Federation for the year http://www.government.gov.ru/government/governmentactivity/rfgovernmentplans/3666193.htm From 1 January 2006, the VAT amounts on goods (or work, or services) are accepted for deduction without their having been compensated to the suppliers.

problem of VAT evasion, and also in order to simplify VAT administration, the Ministry of Finance suggests that the following measures should be implemented:

1. to introduce a special registration of taxpayers as VAT payers, which will make it possible to solve the problem of excluding from the status of VAT payers the fly by night firms, which are widely used in the schemes designed for evading the value added tax.

2. to introduce a system of VAT payments in accordance with which the VAT amounts will be stated within the main space on the payment order form used for the payment of taxes, so as to make it possible to expose at once those organization that do not submit to the tax authorities their VAT declarations, or those who submit declarations containing fraudulent information.

3. to create a system for the control of exports and imports, which will make it possible for the tax authorities to timely obtain, from the customs authorities, the relevant information on exported goods.

Also, at this meeting of the RF Government some alterations were introduced in the Regulation on the Federal Anti Monopoly Service. According to the press release concerning the RF Governments meeting on 23 November 2006, the said alterations were introduced in order to comply with the Regulations Concerning the Wholesale Electric Energy (Power) Market for the Period of Transition, authorized by the Decree of the RF Government On Improving the Procedure for the Functioning of the Wholesale Electric Energy (Power) Market of 31 August 2006, No 529. The Regulations determine that the control over the implementation of the procedures for establishing the facts of rigging the prices of electric energy, is to be carried out by the federal anti monopoly body, with due regard for the levels of economically justified maximum costs of electric energy production existing on the electric energy market, differentiated by the types of power plants (without taking into account their capacity).

M. Goldin An overview of economic legislation adopted in November In November, the following changes were introduced into prevailing legislation : the Law on autonomous institutions, amendments to Article 149 of the Tax Code, concerning exemptions from the value added tax granted to religious organizations; the procedure for the processing of the applications of taxpayers concerning changes in the timelines established for the payment of federal, regional and local taxes and levies in the form of delays, installment plans, or an investment tax credit, to be considered by the RF Federal Tax Service and its Main Administrative Offices at the place of location of a related party; and the publication of the data to be applied for calculating the tax on the extraction of mineral resources levied on oil extraction in September 2006.

I. FEDERAL LAWS of the Russian Federation 1. Law ON INTRODUCING AMENDMENTS TO ARTICLE 149 OF PART TWO OF THE TAX CODE OF THE RUSSIAN FEDERATION of 3 November 2006, No 176-FZ The Law is to come into force from 1 January 2007, but no earlier than after the expiry of one month since the day of its official publication and no earlier than the first day of the next tax period established for VAT.

From 1 January 2006, the procedure for deductions regarding the objects of capital construction has been radically changed, so that the tax amounts with respect to work on contract are accepted for deduction throughout the whole period of work on contract, and not after the completion of the objects construction and their having been put in operation. At the same time, in accordance with the transitional provisions envisaged in legislation, the tax amounts due on the work on contract completed in 2005 are to be accepted for deduction, in equal parts, for each of the tax periods.

In accordance with the transitional regulations, those VAT payers who, prior to 1 January 2006, had applied, as the moment for the determination of the tax base, the day of dispatching the goods (or performing a work, or providing a service), deducted the outstanding VAT amounts due on the goods (or work, or services) that had been taken on discount before 1 January 2006 in equal parts during the first six months of 2006.

In the nine months of 2006, the volume of import, including that of technological equipment, increased by 36 % and 48 %, respectively.

The norm concerning the exemption of religious organizations from the value added tax (Article 149) has thereby been made more specific. At present it is established that the value added tax in the territory of the Russian Federation is not to be levied on the realization (or transfer for their own needs) of items used for religious purposes and religious literature produced and realized by religious organizations. In this connection, in actual practice this exemption can be taken advantage of by those religious organizations that both produce and realize, on their own, items used for religious purposes and religious literature. After the Law comes into force, VAT will no more be levied not only on the commodities (or works, or services) produced and realized by a religious organization or by the economic societies owned by that religious organization, whose charter fund is constituted only by the contributions made by religious organizations, but also on any transfers of such commodities (or works, or services) between any religious organizations and (or) the economic societies created by them, whose sole founders (or participants) are religious organizations (or unions).

2. ON AUTONOMOUS INSTITUTIONS, 03 November 2006, No 174-FZ The Law establishes a new type of a state (or municipal) institution an autonomous institution. An autonomous institution is to be recognized as a commercial organization created by the Russian Federation, or by its subject, or by a municipal formation33 for purposes of carrying out works or rendering services in order to execute the powers granted to the bodies of state authority and local selfgovernment in the spheres of science, education, public health care, culture, social security, employment, physical culture and sports. An autonomous institution is a juridical person and may, in its own name, acquire and execute ownership rights and personal non-ownership rights, bear responsibilities, and act as a plaintiff or a defender in a court of justice.

Autonomous institutions may be founded both by way of being created anew or by the reorganization of a budget-funded institution, on condition that such reorganization will not entail any violation of the rights of citizens in the social and cultural spheres, including the right to receive medical care and education services free of charge, and the right to participate in the cultural life. This law is dispositive, and therefore it contributes to maintaining the currently existing status of those noncommercial institutions that are not in need of being reorganized into an autonomous institution.

An autonomous institution is subject to State registration in the general procedure, as established by RF legislation in respect to State registration of juridical persons and individual entrepreneurs.

The founder should set tasks for an autonomous institution in compliance with its main type of activity as established by its charter. In accordance with the tasks set by its founder and the liabilities to an insurer in respect to mandatory social insurance, an autonomous institution is to perform its activity related to the works being carried out or to services rendered both free of charge or partly on a commercial basis. The financial backing for the main type of activity, as established by the charter of an autonomous institution, is to be provided in the form of subventions and subsidies allocated from an appropriate budget within the RF budget system, or to be covered from other sources that are not forbidden. The terms and procedure for the tasks to be formulated by the founder and the procedure for the financial backing to be provided are to be established by the RF Government in respect to those autonomous institutions that have been created on the basis of federal property; or by the supreme executive body of state authority of a RF subject in respect to those autonomous institutions that have been created on the basis of property owned by that RF subject; or by local administration - in respect to those autonomous institutions that have been created on the basis of municipal property, respectively. The services rendered to the population partly on a commercial basis must belong to the range of an autonomous institutions main type of activity. Other types of activity may be engaged in by an autonomous institution only to the extent that they serve the achievement of the goals, for the achievement of which the said autonomous institution had been created, and only on condition that such types of activity are specified in its charter.

The administrative bodies of an autonomous institution are to be represented by a supervisory board, by the director of an autonomous institution, and by other bodies envisaged in the federal law and in the charter of an autonomous institution (an academic council, an arts board, etc.).

No joint foundation of autonomous institutions (including by different bodies of authority or local selfgovernment) is allowed.

The founder is to play a significant role in organizing the administrative procedures for an autonomous institution. The founder is obliged to approve the charter of an autonomous institution and the introduction thereto of any changes and amendments; to coordinate the decisions concerning the creation of affiliations and the opening of the representative offices of an autonomous institution; to resolve issues relating to the reorganization and liquidation of an autonomous institution; to approve the deed of transfer of property and the division balance sheet; to appoint a liquidation board and to approve the intermediate and final liquidation balance sheet; to appoint and to terminate the powers of the director of an autonomous institution, as well as to conclude and terminate the labor contract with him, if no other procedure for appointing and terminating the powers of the director and (or) for concluding and terminating the labor contract with him is established by the federal law in respect to a given sphere of activity; to consider and approve the proposals put forth by the director of an autonomous institution concerning the transactions in respect to the property of an autonomous institution in the event when, for such transactions to be concluded, the consent of the owner of an institutions property is required.

The distinctive feature of autonomous institutions, in which they differ from the budget-funded ones, is the presence of a supervisory board, to be formed by the founder, within the structure of their administrative bodies. Among the members of the supervisory board, alongside the representatives of an appropriate branch administrative body and the administrative body for the management of state or municipal property, there should also be representatives of the public. Besides, the supervisory board may incorporate representatives of the labor collective of an autonomous institution, whose number, however, may not be in excess of one-third of the total number of the boards members. This will ensure that autonomous institutions have a relatively higher degree of autonomy (as compared to budget-funded ones) and are closer to non-commercial organizations controlled by the public (or public ones).

Of the greatest interest in this connection are the certain limitations that have been established by the law in those spheres. Thus, neither the director of an autonomous institution nor his deputies may be members of the supervisory board, while no such restrictions are imposed on any other members of the labor collective. However, no other members of the labor collective may occupy the post of the chairman of the supervisory board.

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