Chapter 8. Fulfillment of the Obligation to Pay Taxes and Fees

Article 44. Emergence, Alteration and Termination of Obligation for Payment of Tax or Fee

1. Obligation to pay a tax or fee shall emerge, alter and terminate on the grounds established by the present Code or other acts of legislation on taxes and duties.

2. An obligation to pay a specific tax shall be imposed on a taxpayer/payer of duty with the emergence of grounds that require payment of this tax or duty, as established by the legislation on taxes and duties.

3. An obligation to pay a tax and/or duty shall terminate in the following cases:

1) once the taxpayer of payer of duty pays the tax and/or duty;

2) with the emergence of circumstances with which the legislation on taxes and duties associates termination of obligation to pay the tax or duty in question;

3) with the death of an individual taxpayer or recognition of him as decedent in accordance with the procedure established by civil legislation. The liability of the decedent or one recognized as decedent with respect to property taxes shall be repayable on the account of his estate;

4) liquidation of an institutional taxpayer after the liquidation commission has settled all budget claims (claims of extrabudgetary funds) in accordance with Article 49 of the present Code.

Article 45. Fulfillment of an Obligation to Pay a Tax or a Duty

1. It shall be the duty of taxpayers/payers of duties to fulfill the obligation to pay taxes/duties on their own, unless otherwise provided by the legislation on taxes and duties.

The obligation to pay a tax or duty shall be fulfilled within the time limits established by the legislation on taxes and duties. A taxpayer shall have the right to fulfill his obligation to pay taxes/duties ahead of time.

Default on the duty of tax payment or improper discharge of this duty shall be ground for sending a claim for tax payment to a taxpayer by the tax body, the agency of the governmental extra-budgetary fund or the customs agency.

In case of failure to pay or failure to pay the full amount of a tax, the tax debt shall be paid off in due course at the expense of money funds available on bank accounts of the taxpayer in accordance with the procedure provided in Articles 46 and 48 of the present Code, and at the expense of other property of the taxpayer in accordance with the procedure provided in Articles 47 and 48 of the present Code.

Collection of a tax and/or duty from an organisation shall be performed without recourse to court, unless otherwise provided by the present Code. Collection of a tax and/or duty from a natural person shall be done through a court procedure.

Collection of a tax from an organisation cannot be performed without recourse to court, if the tax obligation is based on a change introduced by a tax authority into the following:

1) legal qualification of deals concluded by taxpayers with third parties;

2) legal qualification of the status and nature of the business in which the taxpayer is engaged.

2. Tax obligation shall be considered fulfilled by the taxpayer from the moment an order to pay the tax in question is presented to the bank, provided that the money balance of the taxpayer's account is sufficient to make the payment, and if the payment is made in ready cash - from the moment the tax payment is deposited into a bank or paid to the receiving cashier of a local government authority or a branch office of the State Committee of Telecommunications and Information Technologies of the Russian Federation. The tax shall not be recognized as paid it the taxpayer himself redeems, or the bank returns to the taxpayer, the payment order for the remittance of the tax payment into the budget (extra-budgetary fund), and also if at the time of presenting by a taxpayer an order for tax payment this taxpayer has other non-fulfilled claims made to his account, which under the civil legislation of the Russian Federation are executed in a priority order and if the taxpayer has not sufficient monetary funds on the account to satisfy all claims.

The duty of tax payment shall also be deemed to be discharged after the tax body or the court of law has passed a decision on the offset of the excessively paid or the excessively recovered tax amounts in the order established by Article 78 of this Code.

If the responsibility of assessing the tax and withholding it is imposed, in accordance with the provisions of this Code, on the tax agent, then the tax obligation of the taxpayer shall be considered fulfilled from the moment taxes were withheld by the tax agent.

3. The obligation to pay taxes/duties shall be executed in the currency of the Russian Federation. Foreign organisations, and also natural persons who are not tax residents of the Russian Federation may discharge the duty of tax payment in foreign currency. The tax payment may be made in foreign currency also in other cases provided for by federal laws.

4. Failure to fulfill an obligation to pay taxes shall constitute grounds for applying measures of enforced fulfillment of the tax obligation provided in the present Code.

5. Rules of this Article shall also apply to fees.

Article 46. Collection of Taxes, Duties, and Penalty Interest from Bank Accounts of Institutional Taxpayers (Payers of Fees) or Institutional Tax Agents

1. In case of failure to pay or failure to pay the full amount of tax in the established time frame, the tax obligation shall be executed by enforced collection actions by levying the taxpayer's or tax agent's bank account.

2. Collection of a tax shall be performed on the strength of a decision of the tax authority (hereinafter referred to as decision on collection) by forwarding a cash collection order to the bank of the taxpayer or tax agent, ordering the bank to withdraw money funds from the accounts of a taxpayer/tax agent and remit the required amount to the corresponding budgets and (or) extrabudgetary funds.

3. A decision on recovery shall be taken after the expiry of the period fixed for the discharge of the duty of tax payment, but not later than 60 days after the expiry of the term of the execution of the claim for tax payment. A decision to collect taxes made after the expiration of the indicated ten-day limit shall be ineffective and shall not be subject to fulfillment. Should this be the case, the tax authority can file a suit with a court for collection the tax debt from the taxpayer or tax agent.

The taxpayer (tax agent) shall be notified of the decision to collect the tax not later than five days after the decision on collection of the required amount of cash was made.

4. A cash collection order (instruction) to the bank to remit the tax to the corresponding budget and (or) extrabudgetary fund shall be forwarded to the bank where the taxpayer (payer, tax agent) has its accounts and shall be subject to unconditional fulfillment by the bank within the order of priority established by civil legislation of the Russian Federation.

5. A cash collection order (instruction) of the tax authority to remit a tax shall indicate those accounts of the taxpayer (or tax agent) from which the tax is to be remitted, and the amount to be remitted.

Taxes may be collected from rouble and (or) foreign exchange accounts of a taxpayer (tax agent) with the exception of loan and budget accounts.

Collection of taxes from foreign exchange accounts of a taxpayer (tax agent) shall be performed in the amount equivalent to the amount payable in roubles at the rate of the Central Bank of the Russian Federation on the date of the sale of foreign currency. When taxes are collected from foreign exchange accounts, the head of the tax authority (or his deputy) shall forward to the bank, along with the cash collection order, an order to sell the hard currency of the taxpayer (tax agent) not later that the following day.

A tax shall not be collected from taxpayer's or tax agent's deposit account unless the term of the deposit agreement has expired. Provided there is a deposit agreement between a taxpayer (another obligor) and the bank, the tax authority body shall have the right to issue an order (instruction) to the bank to remit funds from the deposit account to a settlement (current) account of the taxpayer (other obligor) upon the expiration of the deposit agreement, if the order (instruction) of the tax authority to the bank to remit the tax has not been fulfilled by that time.

6. An order (instruction) of the tax authority to remit a tax shall be executed by the bank not later than within one business day after the day when such order (instruction) was received by the credit organisation, if the collection of tax is done from the rouble accounts, or not later than two business days, if the tax is collected from foreign exchange accounts, since this does not violate the order of sequence of payments, established by the civil legislation of the Russian Federation.

Should the balance on the accounts of a taxpayer or another obligor as of the day when the credit organisation received an order (instruction) from the tax authority to remit a tax be insufficient to pay off the tax debt or nil, the order shall be executed as money arrives on such accounts not later than one business day after each such arrival into rouble accounts, and not later than two business days after each such arrival into hard currency accounts, inasmuch as this procedure is not inconsistent with the order of priority payments as established by the civil legislation of the Russian Federation.

7. Should the balance on the accounts of a taxpayer (tax agent) be insufficient or nil or in the absence of information about the accounts of a taxpayer or a tax agent, the tax authority shall have the right to collect the tax liability at the expense of other property of the taxpayer or tax agent in accordance with the procedure set out in Article 47 of this Code.

8. In collecting a tax, a tax authority can resort to suspension of bank accounts of a taxpayer (tax agent) in accordance with the procedure and on the terms established by Article 76 of this Code.

9. The provisions contained in this Article shall also be applicable to collection of penalty interest for untimely payment of taxes/duties.

10. The rules provided in this Article shall also be applicable for collecting a fee.

11. Provisions provided for by this Article shall also apply in case of the collection of taxes and dues by customs agencies.

Article 47. Collection of Taxes at the Expense of Property of Institutional Taxpayers or Institutional Tax Agents

1. In cases stated in Item 7 of Article 46 of this Code, the tax authority can take the property (including ready cash) of an institutional taxpayer or institutional tax agent to satisfy a tax debt within the limits of the amounts indicated in the demand for payment of taxes adjusted for the amounts already levied in accordance with Article 46 of the present Code.

Collection of a tax or duty at the expense of property of an institutional taxpayer (institutional tax agent) shall be performed on the strength of a decision made by the head of the tax authority (his deputy) by forwarding a ruling to the marshal of the court in the district where the taxpayer (tax agent) is located to be executed in accordance with the procedure provided by Federal Law on the Executive Procedure with due account of the details envisaged by this Article.

2. The ruling to collect taxes at the expense of property of an institutional taxpayer or institutional tax agent shall contain:

full name of the official and the name of the tax authority that issued the said decision;

the date and reference number of the resolution of the head of the tax authority (or his deputy) to collect taxes at the expense of taxpayer's (tax agent's) property;

the name and address of the institutional taxpayer or institutional tax agent whose property is being levied excerpt from the resolution of the head of the tax authority (or his deputy) to collect taxes at the expense of taxpayer's (tax agent's) property;

the effective date the resolution of the head of the tax authority (or his deputy) to collect taxes at the expense of institutional taxpayer's or institutional tax agent's property;

the date of the above indicated ruling

The ruling shall be signed by the head of the tax authority (or his deputy) and stamped with the stamp of the tax authority.

3. The collection actions shall be performed, and the orders contained in the ruling executed, by the court marshal within two months after the receipt of the ruling.

4. Collection of taxes at the expense of property of an institutional taxpayer or an institutional tax agent shall be performed in the following sequence:

ready cash;

assets which are not immediately involved in manufacturing of products (goods), particularly, securities, foreign exchange valuables, equipment, non-production premises, automobiles, items of interior design of offices;

finished products (goods), as well as other material valuables which are not involved and (or) not intended for direct involvement in production;

raw materials and supplies intended for direct involvement in production, as well as machinery, equipment, buildings, structures and other fixed assets;

assets transferred under lease, loan, rental or other agreements to other persons (enterprises, organisations or natural persons), if such agreements have been terminated or recognized ineffective in accordance with the established procedure in order to secure the fulfillment of a tax obligation;

other assets.

5. If taxes as collected at the expense of property of an institutional taxpayer or institutional tax agent, the tax obligation shall be considered fulfilled from the moment the said property is sold and the tax debt of the institutional taxpayer or institutional tax agent is paid off from the proceeds from sale.

6. Tax officials shall not have the right to purchase the property of a institutional taxpayer or institutional tax agent that is sold in execution of a decision to collect the tax debt at the expense of the property of the taxpayer or tax agent.

7. Provision provided for by this Article also apply in case of the exaction of a penalty for the untimely payment of the tax and due.

8. The provisions contained in this Article shall also be applicable for collecting a fee at the expense of property of the payer of duty.

9. provisions provided for by this Article shall also apply in case of the collection of taxes and dues by customs agencies.

Article 48. Collection of Taxes, Fees or Interest from Property of Individual Taxpayer or Tax Agent or Natural Person

1. In the event of non-fulfillment in time of a tax liability by an individual taxpayer or a tax agent - natural person, the tax body (customs agency) may file a complaint in court for collection of a tax from the property (including funds at bank accounts and cash) of the individual taxpayer or individual tax agent within the limits of the amounts specified in the demand to pay tax.

2. The complaint concerning collection of a tax from the property of an individual taxpayer or a tax agent - natural person shall be filed with the Arbitration Court (regarding the property of a natural person registered as an individual entrepreneur) or with a court of general jurisdiction (regarding the property of individuals other than entrepreneurs).

3. The complaint concerning collection of a tax from the property of an individual taxpayer or a tax agent - natural person may be filed with an appropriate court by the tax body (customs agency) during six months following the expiration date of the demand to pay the tax.

4. The complaint concerning collection of a tax from the property of an individual taxpayer or a tax agent (customs agency) - natural person can be accompanied by a petition of the tax body to arrest the property of the respondent as a security of the complaint.

5. The proceedings in a case concerning collection of a tax from the property of an individual taxpayer or an individual tax agent shall be performed in accordance with the Russian legislation of arbitration procedures or the Russian legislation of civil procedures.

6. Collection of a tax from the property of an individual taxpayer or an individual tax agent on the basis of an effective court decision shall be made in accordance with the Federal Law on the Executive Procedure with due account of the details envisaged by this Article.

7. Collection of a tax from the property of an individual taxpayer or a tax agent - natural person shall be made step by step with regard to the following:

funds on bank accounts;

cash;

property that is not involved in the production process directly, such as securities, foreign currency, non-production premises, cars, pieces of office decoration;

finished products (goods) and other material assets not involved in production and (or) not intended for direct participation in production;

raw materials and materials intended for direct participation in production as well as plant, equipment, buildings, constructions and other fixed assets;

property which was assigned under a contract into possession, use or disposal without transferring the title of ownership on such property if, in order to secure the obligation to pay a tax, such contract was annulled or invalidated in the established procedure;

other property with the exception of personal effects intended for everyday use by the individual or his family in accordance with the legislation of the Russian Federation.

8. In the event that the tax has been collected from the property of the taxpayer or the tax agent, the obligation to pay the tax and fee shall be deemed fulfilled from the time when such property was sold and the arrears of the taxpayer or the tax agent paid from the proceeds. Interest for untimely remittance of taxes shall not accrue during the period between the time of the property arrest and remittance of the proceeds to the appropriate budgets (off-budget funds).

9. The incumbents of tax bodies (customs agency) shall not have the right to buy the property of an individual taxpayer or an individual tax agent that is being sold in the process of execution of a court decision on collection a tax from the property of the individual taxpayer or the individual tax agent.

10. The rules of this Article shall also apply in case of collecting fee from the property of the taxpayer.

11. The rules of this Article shall also apply to collection of interest for untimely payment of a tax or a fee.