MINIMUM MONTHLY WAGE
The minimum monthly wage has been increased to 75,900 Roubles, effective from 1 April 1996. If used as an accounting unit for tax deductions and other calculations the increase is expected to be effective as of the same date. Instructions from the Finance Ministry and the State Tax Service are expected to confirm this.
(Federal Law of 22 April 1996 No. 40-FZ)
VAT / INTERCOMPANY LOANS / ADVANCE PAYMENTS
The Moscow Tax office has issued two letters on VAT issues:
On the basis of a letter from the State Tax Service, the Moscow tax authorities confirmed their position that the capital element of an intercompany loan (i.e. where the lender is not a bank or a licensed credit institution) is not subject to VAT. The Moscow State Tax Inspectorate has verbally indicated that they will need to satisfy themselves, before granting an exemption, that the proper loan agreement is in place and the repayment is not overdue. Penalties levied prior to this letter for non-payment of VAT on such loans will not be reimbursed. Interest will continue to be subject to VAT. We believe that the literal wording of the law does not provide solid ground for such interpretation and, given the fact that the letter is issued by the Moscow authorities, we would not recommend making any decision based on this information, especially when the transaction is outside Moscow. Specific advice should be sought which takes into account the particular circumstances of the case.
Contrary to the earlier practice, it has now been explicitly stated that VAT should be paid on advance payments for export transactions in the accounting period payments are received and will be reimbursed once the export is accomplished. Concealment penalties (100%) will only be levied if there is a net amount of VAT due to the budget at the moment an enterprise is audited by the tax authorities, but late payment penalties (0.7% per day) will be levied in any case.
(Letters of the Moscow State Tax office of 3 April 1996 No. 11-13/6229 and No. 11-13/6234)
PROFITS TAX / DEDUCTIBILITY OF INSURANCE PREMIUMS
The deduction allowed for certain insurance premiums from the reserve fund, implemented as of 1 January 1996, has now been suspended until 1 January 1997. This presumably means that profits tax calculations for the first quarter of 1996 need to be adjusted.
(Government Regulation of 21 March 1996 No. 299)
EXPORT DUTIES
Effective 1 April 1996 all export duties have been abolished, except those on oil and gas condensate. The latter will be 10 ECU per ton until 1 July 1996 and are then abolished after that date.
(Government Regulation of 1 April 1996 No. 479)
IMPORT DUTIES
New import duties have been notified for a number of products, effective as of 15 May 1996. New import duties for certain oil production equipment have been implemented as of 1 April 1996.
(Government Regulation of 11 April 1996 No. 413, 23 April No. 499 and of 1 April 1996 No. 356)
SECURITIES LAW
The Law on the Securities Market was officially published on 25 April 1996 and is effective from that date. An unofficial English translation of the law is available on request.
(Federal Law of 22 April 1996 No. 39-FZ)
Legal developments are usually reported in Tax News Reporter on official publication. This may be long after the law is issued.
This publication is intended for public guidance only and should not form the basis for specific decisions.
For further information contact the firm on +007 503 232 5511 or enter a text search 'Coopers & Lybrand' and 'Business Monitor'.
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