Russian Federation: Review Of Crisis Management Amendments In Tax Legislation

Last Updated: 13 January 2009
Article by Vladislav Zabrodin

Temporary Crisis Management Measures

Confirmation of the right to apply zero VAT rate

Russian taxpayers who have placed their goods under the customs regime of export, international customs transit, free customs zone, or transportation of stock in the period from July 01, 2008, to December 31, 2009, are granted an additional term of 90 days to collect and file documents confirming the validity of applying the zero tax rate. The time for determining the tax base related to the term for submitting such documents has been moved accordingly.

Specifics of recording under expenses the interest rates on liabilities (Article 269 of the Tax Code)

Up to and including December 31, 2009, the application of the provision according to which the threshold interest rate recognized as an expense is taken as equal to the refinancing rate of the Central Bank of the Russian Federation multiplied by 1.1 (liabilities in Rubles) and equal to 15 percent (liabilities in foreign currencies), provided that there is not commensurate liabilities, has been suspended.

It is prescribed for the term of suspension that the threshold interest rate recognized as expenses is taken as equal to the refinancing rate of the Central Bank of the Russian Federation multiplied by 1.5 for liabilities in Rubles and equal to 22 percent for liabilities in foreign currencies.

Procedure for calculating tax and advance payments for the IV quarter of 2008

Taxpayers making monthly advance payments according to the results of the reporting (tax) period are granted the right to change the procedure for calculating advance payments due for the fourth quarter of 2008.

The amount of monthly advance payment due in the fourth quarter of 2008 may be calculated on the basis of the actually received income calculated using the accrued method from the beginning of the reporting period to the end of the month preceding the month of the advance payment. The change in the procedure for calculating advance payments of income tax should be represented in the accounting policy of the relevant entity. Taxpayers who have exercised the right to change the tax payment procedure shall give notice thereof to the tax authority at the place of their registration prior to the fixed due date of the relevant advance payment, including cases where the calculated advance payment amount is negative or equal to zero.

Tax audit (administration)

Duration of acts of legislation on taxes and duties (Article 5 of the Tax Code)

A special procedure has been prescribed for the entry into force of legislative acts on taxes and duties which improve the situation for taxpayers. Provided that such acts expressly provide for such measures, they will enter into force from the date of their official publication. This innovation will be applicable to relations arisen after October 01, 2008.

General issues of tax base calculation (Article 54 of the Tax Code)

From January 01, 2010, taxpayers are granted the right to re-calculate the tax base and tax amounts of the tax (reporting) period in which errors (misstatements) attributable to prior tax (reporting) periods are revealed, as well as in the events when errors (misstatements) made resulted in overpayment of tax. This right may be exercised where it is impossible to determine the period in which such errors (misstatements) were made.

Writing off bad debts (Article 59 of the Tax Code)

From January 01, 2009, the provision prescribing a new ground for validating and writing off bad debts on taxes and duties. Bad debts are recognized as debts on taxes, duties, penalties and fees which have been written off of taxpayers' bank accounts, but not transferred to the state budget system of the Russian Federation. Such debts will be validated as bad, provided that the relevant paying banks are liquidated.

This provision will apply to the amounts of a tax, duty, penalty or fee which have been written off of accounts of taxpayers, duty payers, and tax agents, but not transferred by banks to the state budget system of the Russian Federation prior to the date of entry into force of the law on introducing the said amendments to the Tax Code of the Russian Federation (hereinafter the "Tax Code").

Thus, many taxpayers will be enabled to "clean up" their business accounts with tax departments.

Granting tax deferment/extension (Articles 64-64.1 of the Tax Code)

From January 01, 2009, new provisions prescribing additional qualifications for deferments and extensions on federal taxes are to enter into force. Deferments or extensions on federal taxes, as well as interest fines and penalties thereon, may be granted if the outstanding tax amount of an entity on the first day of the month of application for deferment or extension exceeds 10 billion Rubles, and its lump sum settlement may give rise to adverse social and economic consequences. It should also be noted that the said decisions on varying due dates of taxes may be adopted before January 01, 2010.

Suspending bank account operations (Article 76 of the Tax Code)

Note the major adopted amendments to the procedure of suspending taxpayer bank account operations:

  • Tax authorities are granted the right to suspend operations on an account for execution of an enforcement decision not only on recovering a tax or levy but also penalty and fine.
  • Decision on canceling a suspension of operations on accounts of a taxpayer company shall be served to a bank representative by a tax authority officer not later than the day following the day of adopting such decision.
  • Starting from January 01, 2010 tax authority shall bear liability in form of interest in the event of failure to comply with timeframes stipulated for cancellation of a decision on suspending operations on accounts or for serving such decision to a bank representative (delivery to a bank).

A taxpayer shall be paid interest for each calendar day of failure to meet the timeframe. The interest rate employed shall equal the refinancing rate of the Central Bank of the Russian Federation.

In-house tax audit (Article 88 of the Tax Code)

The issue with regard to procedure of holding an in-house tax audit of a revised tax declaration submitted prior to the end of an in-house tax audit of an initial declaration has been settled. It is established that in this event the in-house tax audit of the declaration (calculation) submitted earlier shall be terminated and the new in-house tax audit shall commence based on the revised tax declaration (calculation).

Documentation of tax audit results (Article 100 of the Tax Code)

The timeframe for serving an act of tax audit to a party with respect of which an audit is carried out has been determined. This timeframe constitutes 5 days from the date of such act. Taking into account Article 6.1 of the Tax Code, the term is calculated in business days.

Adopting a decision based on tax audit results (Article 101 of the Tax Code)

It has been clarified that in the event a taxpayer failed to submit documents (or information) with regard to the taxpayer's activity to a tax authority in timeframes stipulated in the Tax Code, such documents (or information) received by the tax authority shall not be deemed received in violation of the Tax Code. This regulation is significant in the context of admission of evidence received in violation of the Tax Code.

Value added tax

Operations not subject to taxation (Article 149 of the Tax Code)

Starting from January 01, 2009 operations on selling ferrous scrap metal shall not be subject to taxation. Earlier such incentive was granted only with respect to non-ferrous scrap.

Import of goods not subject to taxation to the Russian Federation (tax-exempt import) (Article 150 of the Tax Code)

Grounds for granting incentives at import of technical equipment to the Russian Federation (including components and spare parts) have been changed.

Firstly, the provision on the necessity to import equipment as a contribution to charter capital in order to qualify for the incentive has been cancelled. This means that the incentive can be received in the event the equipment is imported to the Russian Federation under any foreign trade agreement.

Secondly, equipment is limited to process equipment analogs of which are not manufactured in Russia. List of such equipment will be determined by the Government of the Russian Federation.

This regulation comes into force from January 01, 2009 but no earlier than the first day of the next VAT period when the relevant Resolution on approval of the equipment list of the Government of the Russian Federation will take effect.

Specifics of determining the tax base by tax agents (Article 161 of the Tax Code)

A procedure for determining value added tax base has been established and tax agents in respect to transactions subject to VAT have been defined. Previously these issues have not been regulated in the Tax Code:

1) In the event of disposal (or transfer) of state property comprising the treasury of the Russian Federation, constituent entity of the Russian Federation or a municipal entity, tax agents are purchasers (transferees) of the said property, excluding individuals who are not registered as individual entrepreneurs.

2) In the event of disposal of property under a court order (including but not limited to bankruptcy proceedings), tax agents are state bodies, entities or individual entrepreneurs authorized to effect the disposal of the said property.

3) In the events of transfer of property rights, performance of works and provision of services on the territory of the Russian Federation by foreign persons not registered with the tax authorities, in cases where such transfer is effected through intermediaries by virtue of mandate agreements, commission agreements, or agency agreements, the tax agents are persons registered with tax authorities as taxpayers and conducting business activities with participation in settlements under such intermediary agreements with the said foreign persons.

Procedure for confirming the right to tax refund when applying zero tax rate (Article 165 of the Tax Code)

It is now permitted to substitute customs declarations (or their copies) with registry entries (lists) of customs declarations containing the particulars of customs clearance for the goods in accordance with the customs export regime, or information on actually exported goods with marks of the border customs authority of the Russian Federation.

Procedure for calculation, inclusion, payment and deduction of VAT when receiving advance payment (Articles 168, 169, 170, and 171 of the Tax Code)

The Law regulates an entire range of issues arising when VAT is calculated in the event of receipt/payment of advance payments:

  • when receiving advance payments a taxpayer is made responsible for presenting VAT to the purchaser of goods (works, services), along with the payment;
  • when receiving advance payments, a commercial invoice ('schet-faktura') is stipulated to be issued no later than Five (5) days from the day of receipt of payment installments towards future supplies (or performance of works, or provision of services) or transfer of proprietary rights;
  • requirements for commercial invoice issued when receiving advance payments have been established;
  • procedure for refunding VAT by a purchaser paid as part of an advance payment has been legalized;
  • right to deducting accrued VAT paid by a purchaser when transferring advance payments has been legalized; said right is exercised on the basis of commercial invoices issued by sellers when receiving an advance payment.

Calculation and payment of VAT in case of in-kind settlements (Articles 168, 172 of the Tax Code)

The requirement binding taxpayers to pay VAT to each other separately on the basis of a payment order for transfer of funds when exchanging goods, offsetting mutual claims and using securities in settlements has been repealed.

At the same time, provisions of Article 172 of the Tax Code allowing for a possibility of claiming deduction of "input" VAT only when possessing a respective payment order evidencing VAT transfer were repealed.

At the same time, amounts of VAT a taxpayer is charged with when purchasing goods (works, services), or proprietary rights, recorded on the books before or on December 31, 2008 in the course of selling and purchasing goods, offsetting mutual claims and using securities in settlements from January 01, 2009, have been stipulated to be subject to deduction under the procedure effective on the date when the respective goods (works, services), or proprietary rights were recorded on the books, i.e. under the effective procedure.

Personal Income Tax Property tax deductions (Article 220 of the Tax Code)

The cap amount of property tax deduction a taxpayer can be granted when covering costs on construction of newly built structures or acquisition of residential real estate within Russia has been increased from 1,000,000 to 2,000,000 rubles. This rule has a retroactive effect in that it extends to legal relations arising from January 01, 2008.

Calculation of taxes with respect to certain types of income. Procedure for paying taxes (Article 228 of the Tax Code)

Sub-Clause 2 Clause 1 Article 228 of the Tax Code was amended thus putting an end to numerous disputes with tax authorities on necessary performance by legal entities and individual entrepreneurs of tax agent responsibilities when acquiring proprietary rights, e.g. shares in a share capital of a Limited Liability Company, from individuals under a paid services agreement.

Starting from January 01, 2009 a purchaser is no longer responsible for acting as a tax agent inasmuch as now the individual is made responsible for paying tax when receiving income from exercising proprietary rights.

At the same time, tax agents regained their obligation to calculate and withhold Personal Income Tax provided they happen to be the source of income received by a taxpayer whether in monetary equivalent or in kind by way of gift.

Corporate Profit Tax Depreciation (Articles 258-259 of the Tax Code)

The principle changes made to the tax legislation and taking effect as of January 01, 2009 pertaining to accrual of depreciation and amendment of provisions of Articles 258-259 of the Tax Code were described in sufficient detail in our previous Tax Legal Briefing.

Among additional changes introduced, the following should be noted particularly:

  • Increase of bonus depreciation from 10 to 30 percent in relation to fixed assets included into the 3rd through 7th depreciation groups.
  • Cancellation of the 0.5 reduction factor applicable to cars and passenger minibuses with initial cost of 600,000 and 800,000 respectively, including vehicles commissioned into operation after January 01, 2009.

Expenditures associated with compulsory and voluntary property insurance (Article 263 of the Tax Code)

The list of types of voluntary insurance has been made an open one, thus enabling a taxpayer to recognize its insurance premiums incurred under any property insurance as its expenditures, provided the taxpayer's business requires procurement of such insurance under the effective Russian legislation.

In addition to civil liability insurance (against inflicting harm or injury), provided the taxpayer's business requires procurement of such insurance under the effective international obligations of the Russian Federation or conventional international requirements, a taxpayer has been permitted to recognize insurance of liability under an agreement as its expenditures.

Tax rates (Article 284 of the Tax Code)

Reduction of profit tax rate is the most popularized amendment to the Tax Code. Starting from January 01, 2009 the aggregate tax rate will constitute 20 percent (unless a lower rate is established). That being so, the tax rate will be reduced exclusively through the share of the federal budget – to be established at 2.5 percent.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions