State Duty

State duty refers to fees charged by authorised authorities or officials for carrying out legal actions or issuing documents.

State duties are charged:
     -on claims filed with courts;
     -for notary actions;
     -for state registration of acts of civil status;
     -for documents issued by courts as well as by state authorities and agencies as stipulated by the legislation of the Russian Federation;
     -for reviewing and issuing documents associated with obtaining or giving up one's citizenship in the Russian Federation; and
     -for performing other legal actions established by legislation.

Taxes Inherited or Donated Property

The tax is paid by individuals who inherit property or receive it as a donation. The tax rate is set at 5% to 40 % of the cost of property that is inherited or donated depending on proximity of kinship and actual cost of this property

Levy for Using the Names or and Words and Word Combinations Formed on the Basis of These Names

The levy is paid by entities who use this nomenclature or words and word combinations derived from this nomenclature in their names.

The levy is paid at the following rates:
     -for entities performing business activities (except supply and commercial companies) - 0.5% of the cost of sold goods (work, services);
     -for supply and commercial companies -0.05% of the turnover; and and organisations - 100 minimum statutory monthly wages as established by legislation (as at 1 June 2000, this minimum wage is equal to 83.49 roubles, therefore, the levy amounts to 8,349 roubles) and paid annually.

Tax on the Purchase of Foreign Currency Banknotes and Payment Documents Expressed in Foreign Currency

The tax is levied on rouble amounts paid when performing the following transactions:
     -purchasing foreign cash for cash in roubles;
     -purchasing payment documents in foreign currency for cash in roubles;
     -paying out cash in foreign currency from currency bank accounts to individuals, on the condition that this cash was deposited into currency accounts from rouble accounts;
     -purchasing foreign banknotes unsuitable for circulation due to defects from individuals; and
     -paying out cash in foreign currency from rouble card accounts to plastic card holders.

The tax rate is equal to 1% of the taxable base.

Gambling Tax

The tax is levied on the following objects:
     -gambling tables - the minimum annual tax rate is equal to 100 minimum statutory monthly wages (i.e. as at 1 June 2000, 8,349 roubles);
     -slot machines - the minimum annual tax rate is equal to 45 minimum statutory monthly wages (i.e. 3,757 roubles);
     -betting cash windows- the minimum annual tax rate is equal to 1,200 minimum statutory monthly wages (i.e. 100,188 roubles); and for other enterprises, companies
     -cash windows in bookmakers' offices - the minimum annual tax rate is equal to 600 minimum statutory monthly wages (i.e. 50,094 roubles).

Payment for Using Water Sources

A charge is levied on the use of water sources when structures, technical equipment or devices are applied in order to:
     -obtain water from water sources;
     -satisfy hydroelectric water requirements;
     -use defined areas of water sources; and
     -dispose of sewage into water sources,

The rates of payment are established in roubles per 1,000 cubic metres of water taken from the surface of the water source, per 1,000 kilowatt-hours of processed electricity, per one cubic kilometre of the defined area of the water source used and per 1,000 cubic metres of sewage.

Charges for Issuing a License and the Right to Produce and Sell Ethyl Alchohol, and Products Containing Alchohol and Spirits

The charge is levied for the issue of a license granting the right to produce, pour, store and sell ethyl alcohol and alcoholic products, including spirit solutions, the right to purchase, including import, the right to export ethyl alcohol and alcoholic products. The charge ranges from 100 to 15,000 minimum statutory monthly wages.

Tax on Certain Means of Transportation

Cars with an operating engine capacity of more than 2500 cm3 are subject to this tax. The tax is established at an amount ranging from two to three roubles per cm3 of engine capacity. The tax is paid once per year.

Tax on Property of Legal Entities

Fixed assets, intangible assets, low-value and short-lived items, stock and costs included on a taxpayer's balance sheet are subject to property tax (fixed assets, intangible assets, low-value and short-lived items are accounted for at their net book value for taxation purposes.) The tax rate in St. Petersburg amounts to 2% of the average annual value of property. Payments are made on a quarterly basis.

Sales Tax

Sales tax is levied on the cost of goods (work, services) excluding VAT sold either retail or wholesale for petty cash. In St. Petersburg, the sales tax rate is established at “/®.

Individual Property Tax

Tax is levied on residential houses, apartments, summer cottages, garages, other buildings, premises and constructions as well as motor boats, helicopters, air planes and other transport vehicles owned by individuals. Tax is not levied on cars, motorcycles and other self-propelled vehicles and pneumatic vehicles.

Tax on buildings, premises and constructions is paid annually at a rate established by legislative authorities of the subjects of the Russian Federation in an amount from 0.1% to 2% of their book value.

Tax on transport vehicles is charged depending on the engine capacity at a rate from 3% to 10% of one minimum statutory monthly wage per one horse power.

Land Tax

The land tax rate in St. Petersburg ranges from one to 25 roubles per square meter per year depending on the town-planning value of the area.

Advertising Tax

The tax rate is 5% of a Company's expenses for advertising services rendered (excluding VAT). It is paid on a quarterly basis.

Social Fund Contributions

The following social fund contributions must be paid by employers from payroll accrued:
     -Pension fund - 28.0%
     -Social Insurance Fund - 5.4%
     -Medical Insurance Fund - 3.6%
     -Employment fund - 1.5%
     -Total: 38.5%

In addition, a 1% contribution to the Pension Fund is withheld from the employee's salary. As of 2000, companies are also obliged to contribute employment accident insurance payments to the Social Fund. The insurance rates depend on the industrial economy category and on the degree of professional risk involved.

Presently legislative authorities are considering the possibility of establishing a single social tax which would replace all the existing mandatory payments to the various funds.

Withholding Tax

Income paid by a Russian company to a foreign legal entity that does not engage in activities in Russia through a permanent establishment is subject to withholding tax. The withholding tax rate depends on the nature of the income earned. Income generated from freight is taxed at a rate of 6%, dividends and interest at 15% and other types of income are taxed at a rate of 20%

The tax is withheld in the currency of the payment every time a payment is made. Withholding tax may not have to be paid or may be reduced in accordance with the conditions of international double tax treaties concluded between the Russian Federation and other countries.

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