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
VAT WITHHOLDING / NOTIFICATION OF RUSSIAN SOURCE INCOME
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.
BANK TRANSFERS / INFORMATION TO BE INCLUDED IN PAYMENT ORDER
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
BANK TRANSFER DETAILS FOR TAX PAYMENTS AND MEDICAL INSURANCE FUND CONTRIBUTIONS BY REPRESENTATIVE OFFICES LOCATED IN MOSCOW
TAX PAYMENTS IN ROUBLES:
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: PROMRADTECHBANK, 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
TAX PAYMENTS IN FOREIGN CURRENCY:
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
ROUBLE PAYMENTS TO THE MEDICAL INSURANCE FUND
Recipient: 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
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