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www.amcham.ru/advocacy/legislative_updates/bill666105

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Jul 23, 2008: New Federal Law on Amending Part 2 of the RF Tax Code

Russian President Dmitry Medvedev has signed the Federal Law “On Amending Chapters 21, 23, 24, 25, and 26 of Part 2 of the Russian Tax Code and other Legislative Acts of the Russian Federation on Taxes and Fees.” This law was accepted by the State Duma on July 4, 2008 and approved by the State Council on July 11, 2008. The Changes are focused on the new preferential tax treatment of educational and medical costs of companies, mortgage taxation, new tax rules for depreciation of fixed assets, and a new preferential tax regime for certain types of oil extraction in hard-to-access regions of the Russian Federation.

The law aims to implement an innovative scenario for development of the economy and the improvement of social welfare. The law makes provisions for exempting from income tax and the unified social tax sums paid out by companies to individuals for education and mortgage payment expenses.

The document also reduces the tax burden for Research & Development (R&D) expenditures and the procedure for declaring amortizable assets, appraising depreciated cost, and imposing amortization sums has been refined.

The law makes provisions for reducing the tax burden on hard-to-reach oil extraction activities. Tax holidays will be introduced for a period of ten to fifteen years, depending on the region and the level of depletion; or until attainment of a cumulative oil extraction volume of thirty-five million tons for deposits located beyond the Arctic Circle within the boundaries of inland sea waters and territorial waters on the continental shelf of the Russian Federation; up to ten million tons for deposits in the Sea of Azov and the Caspian Sea; and fifteen million tons for deposits located in the Nenets Autonomous Okrug and the peninsula of Yamal.

The law changes the procedure for levying taxation. Tax will now be levied at $15 per barrel, not $9 as stipulated by the previous version of the Tax Code.

The law is available for download::

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