Russian Federation: Tax News Reporter - Week Ended 22 October 1996

Last Updated: 23 October 1996

The minimum charter capital for banks with less than 50% foreign participation is now 13.5 billion roubles, and, for non-bank credit organisations, 3.5 billion roubles. If the foreign participation exceeds 50%, the minimum requirement becomes 34 billion roubles, and no shareholder may be involved for less than 10 billion roubles.

Telegram of the Central Bank of 4 October 1996 No. 124-96


As we announced earlier (Tax Alert 6/96 of 26 July 1996), the Moscow Tax Inspectorate (MTI) now requires a notification of Russian source income (Form 1011 FE), signed as received by the MTI, as the only document which can exempt a Russian legal entity from the obligation to withhold VAT from income paid to a foreign legal entity (Letter of the MTI of 5 June 1996 No. 11-13/11769). On this form, the foreign legal entity must declare the income in section 5 or 6 as "connected with a permanent establishment" i.e. subject to profits tax, although income subject to VAT is not necessarily subject to profits tax. Before the letter of the MTI was issued, it was sufficient to provide a tax registration certificate of the foreign legal entity in order to avoid withholding of VAT. The MTI now appears to have taken the position that, if a Russian legal entity does not hold a copy of form 1011 FE from foreign legal entities to which it is making a payment, VAT should be withheld from those payments. This requirement is effective as of 1 July 1996 and must be applied irrespective of whether VAT has been properly accounted for and paid by the foreign legal entity. In case of failure to withhold, late payment interest may be charged at 0.3% per day. Although this practice may very well be challenged, we recommend Russian companies which have been paying income subject to VAT to foreign legal entities and have not withheld VAT to obtain such forms.


Effective 11 October, tax and other obligatory payments in roubles must go through the calculation centre of the Central Bank and a Bank Idendification Code (BIC) must be mentioned to identify the bank of the payer and of the payee with the RKC. We have summarised the bank account information for Moscow representative offices for tax payments and medical fund contributions. With regard to the Pension fund, Employment Fund and Social Insurance Fund the situation is different: representative offices are registered with the branch of the fund where they are located and pay to their bank accounts.

Letters of the Central Bank of 19 August 1996 No. 17-1-7/457 and of 5 September 1996 No. 323


Recipient : Tax Inspectorate of Moscow City TIN 7710044894

Federal Budget
Moscow Bank AK Sberbank  RF,
BIC 044'583'342, correspondent account 342'164'500

TAX NAME                     Account No 

Profit tax                   100'100'501 
Value added tax              100'100'702 
Special tax                  100'100'126 
Security operations tax      100'100'618 

City budget:

BIC 044'652'366, corrsepondent account 366'161'200

TAX NAME                     Account No 

Profit tax                   10'130'541 
Special tax                  10'130'842 
Personal income tax          10'130'143 
Transport tax                10'130'046 
Education tax                10'130'347 
Housing tax                  10'130'648 
Sundry taxes                 10'130'949 
Property tax                 10'130'350 
VAT                          10'130'651 

Federal Road fund:
Moscow Municipal Bank - Bank of Moscow,
BIC 044'583'134, correspondent account 134'161'300

TAX NAME                     Account No 

Tax on fuel sales            038'750'401 
Road users tax               038'142'802 
Vehicle owners tax           038'142'103 
Purchase of vehicles tax     1038'142'404 

Recipient : Moscow City Tax Inspectorate TIN 7710044894

Federal budget:
MENATEP Bank, 103045 Moscow, Ulansky Pereulok 26

TAX NAME                     Account No 

VAT                          070'538'001'0001 
Special tax                  070'538'001'0002 
Tax on FLE's income          070'538'001'0004 
Fine for failure to convert
hard currency sales revenue  070'538'001'0005 
Unidentified sums            070'538'001'0006 
Sundry taxes                 070'538'001'0007 
Accrued % and penalties      070'538'001'0008 

City budget:
MENATEP Bank, 103045 Moscow, Ulansky Pereulok 26

TAX NAME                     Account No 

VAT                          070'738'001'0001 
Special tax                  070'738'001'0002 
Tax on FLE's income          070'738'001'0004 
Sundry taxes                 070'738'001'0007 
Accrued % and penalties      070'738'001'0008 


Federal Medical Insurance Fund TIN 7727032382, 
Moscow City Medical Insurance Fund TIN 7704043123T
KB MOST Bank, BIC 044583705, correspondent account 705161700

Medical Insurance Fund       Account No. 

Federal Part                 37'692'801 
Regional part                37'692'102 

For further information contact Bauke van der Meer on tel: +7 503 232 5511 fax: +7 503 232 5522 or e-mail directly: Click Contact Link or enter a text search 'Coopers & Lybrand' and 'Business Monitor'

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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