TECHNOLOGICAL EQUIPMENT EXEMPTION ABOLISHED
The VAT exemption applicable for importation of technological equipment has been abolished by the Federal Law which entered into force on 30 April 1997. Importation of technological equipment under qualifying contracts concluded before the Law entered into force and registered in a prescribed manner with the customs authorities may be effected without paying VAT in 1997. No document setting out the procedure for the registration of the signed contracts has been issued yet by the customs authorities. However, we expect it to be prepared soon, and therefore be prepared to register contracts in short order. The Law appears to have deleted the definition of the place of supply for transportation services.
Federal Law Of 28 April 1997 # 73-FZ "On Inserting Amendments To The Law Of The Russian Federation "On Value Added tax"
NEW ACCOUNTING RULES FOR FINANCIAL LEASING TRANSACTIONS
A new order of the Ministry of Finance is effective since 1 January 1997 that overrules Minfin's Order #105 of 25.09.95 and changes the Instruction for using the Chart of Accounts. Contingent upon the terms of an applicable leasing agreement, leased property may be accounted for either by the lessor or the lessee. If the asset remains with the lessor, as before, leasing proceeds are treated as proceeds from sales (account #46), so housing fund tax is due. If, however, the asset is accounted for by the lessee, income from the lease flows through nonrealisation income (accounts #83,80) and it appears that the housing tax may be avoided. Due to recent changes in road users' tax legislation, road tax appears to be due in either case. The order also confirms that accelerated depreciation of leased property is available.
Order Of RF Ministry Of Finance #15 Of 17 February 1997 "On Recording Leasing Transactions In Company's Books"
APPLICATION OF TURNOVER TAXES CLARIFIED
The Letter clarifies the base for the calculation of turnover taxes by professional participants of the securities market. The turnover tax base for investment institutions includes the difference between the revenue from the sale of securities and their book value less accrued interest on bonds and commission fees. According to the Letter the difference between the sales and purchase price of GKOs is not subject to turnover taxes, as it is effectively interest on these securities. The document states that this approach should also be applied in 1996.
Letter of the State Tax Service # '˜-4-07/11,
# 1-35/128 Of 17 March 1997 "On Taxation Of Investment Institutions" (Registered With The Ministry Of Justice On 2 April 1997 # 1284)
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