reference

LAW

OF THE RUSSIAN FEDERATION

NO. 943-1 OF MARCH 21, 1991

ON TAX BODIES IN THE RUSSIAN FEDERATION

(with the Additions and Amendments of June 24, July 2, 1992

February 25, 1993, June 13, 1996, November 16, 1997, July 8, 1999,

November 7, 2000, December 30, 2001)

   I. General Provisions                              (Articles 1 - 5) 
  II. The Tasks, Rights and Duties of Tax Bodies      (Articles 6 - 10) 
 III. Responsibility of Tax Bodies                    (Articles 11 - 14)
  IV. Other Questions of  Functioning of the Tax      (Articles 15 - 18)
      Bodies                                                     

 Resolution of the Supreme Soviet of the RSFSR on  the  Procedure  for
 Carrying into Effect of the Law of the RSFSR on the State Tax Service
 of the RSFSR 

CHAPTER I. GENERAL PROVISIONS

Article 1. The tax bodies of the Russian Federation (hereinafter referred to as "tax bodies") is a comprehensive system whereby control is exercised of the observance of the tax legislation of the Russian Federation, correctness of the computation, fullness and proper timing of taxes and other mandatory payments, correctness of calculations, completeness and timeliness of entering payments for sub-soil use to an appropriate budget provided for by the legislation of the Russian Federation and being entered in a respective budget as well as control of the observance of the currency legislation of the Russian Federation exercised within the competence of the tax bodies.

Article 2. The comprehensive centralized system of tax bodies comprises the Ministry of Taxes and Fees of the Russian Federation and the territorial bodies thereof.

Article 3. In their activities the tax bodies shall be governed by the Constitution of the Russian Federation, the Tax Code of the Russian Federation and other federal laws, the present law and other legislative acts of the Russian Federation, the regulatory legal acts of the President of the Russian Federation and the Government of the Russian Federation as well as the regulatory legal acts of the bodies of state power of the subjects of the Russian Federation and local self-government bodies adopted within competence thereof on the issues of taxes and fees.

Article 4. The tax bodies shall fulfill the tasks assigned to them in cooperation with the federal bodies of executive power, the bodies of state power of the subjects of the Russian Federation and local self- government bodies.

Article 5. The bodies of the Russian Federation Ministry of Internal Affairs shall be obliged to render practical assistance to the workers of the tax bodies in their service duties by ensuring the adoption of statutory measures that place responsibility with the persons who forcibly prevent the employers of the tax bodies from performing their service functions.

CHAPTER II. THE TASKS, RIGHTS AND DUTIES OF TAX BODIES

Article 6. The main goal of the tax bodies is to exercise control over take out tax legislation, over the correct computation, complete and timely assignment to the budget of taxes and other payments established by the legislation of the Russian Federation, and also currency control exercised in compliance with the currency control and currency regulation legislation of the Russian Federation and the present law.

Article 7. The tax bodies are hereby granted the right to:

1. Verify vouchers, account books, accounts, plans, estimates, declarations and other documents associated with the computation and payment of taxes and other obligatory payments to the budget in the bodies of state power and local self-government, organizations, with citizens of the Russian Federation, foreign citizens and persons without citizenship (hereinafter referred to as "bodies, organizations and citizens"); to receive from such bodies and citizens the necessary explanations, references and information about matters arising during verification, with the exception of the data constituting commercial secrets determined in a statutory manner.

2. Control legislation by citizens engaged in business.

3. Receive from enterprises, institutions, organizations (including banks and other financial and credit institutions), and also from individual citizens with their consent references, documents and their copies that concern the taxpayer's economic activity and are needed for proper taxation.

The office-bearers of the tax bodies shall be obliged to keep secret the deposits of citizens and organizations.

4. To inspect any productions, warehouses, trade and other premises of enterprises, institutions, organizations and individual citizens, in observance of relevant rules within their powers, which are used to derive profit or are linked to the maintenance of tax bases, irrespective of the place of location. In cases of citizens refusing to admit officials of tax bodies for the purpose of inspecting said premises, the tax bodies shall have the right to assess the taxable income of such persons on the strength of documents testifying to the receipt of their income,and with an eye to the taxation of persons engaged in similar activity.

5. Demand that managers and other office-bearers of the verified enterprises, institutions, organizations and also individual citizens remove the revealed breaches of tax legislation and other obligatory payments to the budget and business legislation and to control their implementation.

6. Suspend the operations of enterprises, institutions and organizations and also individual citizens involving settlement and other accounts in banks and other financial and credit institutions in cases of non-submission (or refusal to submit) to tax bodies and their officials of financial accounts, balance-sheets, payment transactions, declarations and other documents connected with the computation and assignment of taxes and other obligatory payments to the budget.

7. Withdraw from enterprises, institutions and organizations, documents testifying to the concealment or understanding of profit (income) or the concealment of other tax bases, from taxation, and to simultaneously inspect documents and fix their content. The scope and make up of impounded documents shall be determined by instructions issued by the Ministry of Taxes and Fees of the Russian Federation.

A motivated decision taken in writing by an official of the tax bodies shall be grounds for impounding the corresponding documents.

8. To return decisions whereby bodies, organizations and citizens are held answerable for the commission of tax offenses, in accordance with the procedure established by the Tax Code of the Russian Federation.

9. To collect tax arrears penalties in accordance with the procedure established by the Tax Code of the Russian Federation.

10. Petition to ban self employment throught legistative means.

11. Institute actions in courts of law or arbitration:

- concerning liquidation of an enterprise of any organizational and legal form on the grounds stipulated by Russian Federation legislation, concerning the recognition of the registration of an enterprise as invalid, in case of violating the statutory order of setting up enterprises, or of poorword of their choice instruments with the requirements of legislation and concerning the recovery of income obtained in such cases;

- concerning the recognition of transactions as invalid and the recovery, for the State's benefit,of everything that was received in such transactions;

- concerning the recovery of the received without proper grounds,not under a transaction but as a result of other illegal actions.

12. To impose administrative fines:

- on office-bearers of enterprises, institutions and organizations guilty of concealing (understating) profit (income) or (unaccounting) other tax bases, and of failing to keep financial accounts or keeping them with the contravention of the established order, and of distorting the financial accounts, of failing to submit, or untimely submition, or submitting in a non-statutory form such accounts, balance-sheets, payment transactions, declarations and other documents associated with the computation and assignment of taxes and other payments, to the budget, -in amount from two to five minimum amounts of the remuneration for labour for every guilty body or person, and in the amount from five to ten minimum amounts of the remuneration for labour for the same actions committed for the second time during the year after the imposition of the administrative penalty;

- on citizens guilty of violating business legislation or engaging in business, in respect of which there is a special prohibition, and also on citizens who are guilty of failing to keep the record of incomes, or keeping it with the contravention of the established order, of failing to submit or untimely submitions income declarations, or of including, in declarations, distorted data -- in the amount from two to five minimum amounts of the remuneration for labour, and in the amount from five to ten minimum amounts of the remuneration for labour for the same actions committed for the second time during the year after the imposition of an administrative penalty;

- on managers and other office-bearers of enterprises, institutions and organizations, and also individual citizens who do not meet the requirements of tax bodies and their officials, listed in Paragraphs 3-6 of the present Article -- in the amount from two and a half to five minimum amounts of the remuneration for labour.

13. To set up tax posts for debt repayment period in the organizations having a three-month and longer arrears, as aimed at monitoring the repayment thereof.

14. The Ministry of Taxes and Fees of the Russian Federation is a body of currency control and it performs the functions relating to its exercising currency control, in accordance with the procedure provided by the Government of the Russian Federation.

Article 8. The rights of tax bodies,provided for by Paragraphs 1-7 of Article 7 of the Law, shall be granted to the officials of theses teams, while the rights provided for by Paragraphs 8-13 shall be granted to the chiefs of tax bodies and their deputies.

Article 9. Superior tax bodies are hereby granted the right to overturn the decisions of subordinate tax bodies if they do not comply with the Constitution of the Russian Federation, federal laws and other regulatory legal acts.

Article 10. The officials of tax bodies shall perform the duties provided in the Tax Code of the Russian Federation.".

CHAPTER III. RESPONSIBILITY OF TAX BODIES

Article 11. The tax bodies shall bear responsibility for a full and timely account of all taxpayers -- the enterprises, institutions and organizations based on any form of property and for a documentary verification of correct computation, complete and timely assignment to the budget of state taxes and other payments not less than once every two years.

On the grounds of a written decision of the head or deputy head of the tax bodies in which a taxpayer has been registered, the documentary check may not be carried out at the time established by paragraph one of the present Article in the cases:

1) if the taxpayer submits in due time the documents necessary for calculating and/or paying the taxes and other obligatory charges;

2) if the latest check has not revealed any violations of the tax legislation;

3) if the increase of the quantity of the property or of any other object of taxation of enterprises, institutions and organizations has been documentarily confirmed;

4) if there are no relevant documents and information, which makes doubtful the origin of the taxpayer's funds or points to the existence of violations of the tax legislation.

Article 12. For nonfulfillment or improper fulfillment by tax bodies officials, of their duties, they will be charged with disciplinary, financial and criminal responsibility in accord with the laws in force.

Article 13. The sums of taxes and other obligatory payments, recovered by tax bodies in a wrong way shall be subject to return; whereas the losses (including lost profit) to the taxpayer caused by illegal actions of tax bodies and their officials, shall be reimbursed in a statutory manner.

Article 14. The procedure for the appeal of the acts of tax bodies and the acts or omissions of the officials thereof, for the consideration of complaints and the return of decisions on them shall be provided by the Tax Code of the Russian Federation.

If an enterprise disagrees with the decision taken by the Central State Tax Inspectorate of the Russian Federation Ministry of Finance, it may appeal this decision with an arbitration court.

If citizens disagree with the adopted decision, the actions of state tax team officials shall be appealed in judicial proceedings.

Lodging complaints shall not suspend the appealed actions, taken by tax bodies officials.

Actions taken by the office-bearers of tax bodies, associated with the imposed administrative penalty, shall be appealed in accordance with the legislation of the Russian Federation and the Republics constituting it on administrative malfactions.

CHAPTER IV. OTHER QUESTIONS OF FUNCTIONING OF THE TAX BODIES

Article 15. The order of supplying the tax bodies of the Russian Federation with service premises, transport facilities, computer technology and other material, technical means, and their workers with housing; preschool and general education establishments shall be introduced by the Government of the Russian Federation and the bodies of executive power of the subjects of the Russian Federation.

Article 16. All the staff employees of the tax bodies shall be subject to compulsory life and accident insurance at the expense of the federal budget resources of the Russian Federation.

Article 17. If a employee on a tax bodies dies in connection with his official service, the family of the decedent or his supporters shall receive a lump-sum benefit amounting to his upkeep for ten years from the republican budget of the Russian Federation, with the subsequent recovery of this sum from the persons at fault. If a grave bodily injury is inflicted on a tax bodies worker, that precludes further possibility of being engaged in professional activity, he shall be paid a lump-sum benefit amounting income for five years at the expense of the federal budget resources of the Russian Federation with the subsequent recovery of this sum from the persons at fault, in additional to the difference between his salary and pension for a period of ten years.

If a less grave bodily injury is inflicted on a tax bodies worker, he shall be paid a lump-sum benefit amounting to his upkeep for five months, from the federal budget resources of the Russian Federation, with the subsequent recovery of this sum from the persons at fault.

The damage caused to the property of a tax bodies employee (or his near relation) in connection of his official duties shall be compensated in full, from the federal budget resources of the Russian Federation with the subsequent recovery of this sum from the persons at fault.

Article 18. The heads and specialists of the tax bodies shall be assigned class ranks in accordance with their positions, qualifications and work records.

The regulations on class ranks of the employees of the tax bodies and the rates of allowances payable for the class ranks shall be subject to endorsement by the President of the Russian Federation.

Moscow, the House of Soviets

of the Russian Federation

March 21, 1991.