Russian Federation: Tax News Reporter - 5 January 1996

Last Updated: 20 February 1996
Withholding tax / Exemption forms

Russian legal entities have to withhold tax from payments of Russian source income to foreign legal entities. If not withheld and paid in the budget, the authorities can collect the tax from the Russian payer. If reimbursement is required, on the basis that a reduced or zero withholding tax rate under a double tax treaty applies, Russian law requires that the foreign legal entity receiving the income delivers proof of tax residence in the other country. This confirmation has then to be presented to the State Tax Service and the competent authority of a foreign country may provide its own form with a text in Russian or in English. It is expected that the tax authorities will require the confirmation to be apostilled. The confirmation should be accompanied by agreements, invoices, payments or other banking documents.

(Letter of the State Tax Service of the Russian Federation of 3 January 1996, No. HN-4-06/1H)

Joint Stock Companies

The Law on Joint Stock Companies entered into force as of 1 January 1996. It is based on the corporate law section of Part I of the Civil Code and regulates many of the practical issues such as registration of joint stock companies, shareholders' meetings, mergers, take-overs and re-registration of shares.

(Federal Law of 26 December 1995 No. 208-03)

Tax Police

There has been an amendment to the Law on the Tax Police and the Criminal Procedure Code. It deals mainly with the internal structure of the tax police and consolidates the powers and competences of tax police officials in criminal investigations.

(Federal Law of 17 December 1995, No. 200-03)

Deferment of tax payments / Limitation on use of bank accounts

A new regulation amends Government Regulation No. 1020 of 13 October 1995, and introduces a restriction on how enterprises and organisations which have been granted a deferment for tax payments may draw funds from their bank accounts.

(Government Regulation of 18 December 1995, No. 1245)

Corporate law / Financial-Industrial Groups

The new law consolidates previously existing regulations on financial-industrial groups. A financial-industrial group (FIG) is a group of companies, whether or not related through capital, the members of which have entered into an agreement to found an FIG and have designated a `central enterprise'. This agreement is subject to state registration. The participants of an FIG are jointly liable for the liabilities of the central enterprise.

(Federal Law of 30 November 1995, No. 190-03)

Profits tax / VAT / Draft Laws

The profits tax law discussed in Tax Alert 20/95 has been signed by the President and is effective as of 1 January 1996. The President has refused to sign the VAT law. Points of dispute are said to be the exemption on housing constructions, the exemption on goods imported into Russia under loans granted to the Russian government and the facility to pay VAT in foreign currency. If signed, the VAT law will probably be effective as of 1 January 1996. We will keep you informed of developments.

(Federal Law of 31 December 1995 No. 227-03)

Special tax / VAT

The special tax of 1.5% that was levied parallel to VAT has now been repealed with effect from 1 January 1996. Special tax is due on goods supplied or services performed before 1 January 1996, irrespective of when the payment is made. Special tax paid over in advance payments or relating to any other future supply of goods and services will not be reimbursed. Special tax paid over fixed and intangible assets prior to 1 January 1996 should be offset or refunded in the usual way. If it is paid after 1 January 1996, it should be written off as a cost of production, subject to the normal limitations.

(Telegram of the Ministry of Finance and the State Tax Service No. 04-03-02) and NB-6-03/16 of 11 January 1996

Small entrepreneurs / Simplified taxation

Small enterprises (up to 15 employees, including individuals registered as private entrepreneurs) can choose for a simplified system of taxation. Tax can be levied on the gross profit (maximum rate 30%) or on the gross turnover (maximum rate 10%). The enterprise or the individual have to apply for permission (patent) to be allowed to use the simplified regime with the tax authorities where it is registered. If permission is obtained, it will be valid for one calendar year.

(Federal Law of 29 December 1995 No. 222-03)

Legal developments are reported in Tax News Reporter on official publication. This may be long after the law is issued.

This publication is intended for general guidance only and should not form the basis of specific decisions.

For further information please contact the firm on +007 503 232 5511 or enter text search 'Coopers and Lybrand' and 'Business Monitor'.

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”

Mondaq Advice Centre (MACs)
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
Check to state you have read and
agree to our Terms and Conditions

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.

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 by clicking here .

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.


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.