Article 149. Operations Which Are Not Taxable (Exempted from Taxation)

1. Not subject to taxation (exempt from taxation) letting out premises by a lessor on the territory of the Russian Federation to foreign subjects or to organizations accredited in the Russian Federation.

The provisions of Paragraph One of this Item shall apply when by law of a corresponding foreign state a similar procedure is established concerning citizens of the Russian Federation and Russian organizations accredited in this foreign state, or if such a standard is stipulated by an international treaty (agreement) of the Russian Federation. The list of foreign states in relation to whose citizens and (or) whose organizations are applied the norms of the present Item shall be defined by the federal body of executive authorities regulating relations of the Russian Federation with foreign states and international organizations jointly with the Ministry of Taxation of the Russian Federation.

2. Not subject to taxation (tax exempt) shall be the sale (and also transfer, performance, rendering for own needs) on the territory of the Russian Federation of:

1) the following domestic and foreign-made medical goods as per under the list approved by the Government of the Russian Federation:

major and vitally essential medical equipment;

artificial limbs and orthopedic articles, raw materials for their manufacture and semi-finished articles for the above;

technical facilities, including motor vehicles, materials which can be used only for disability prevention or rehabilitation of invalids;

glasses (except for sun glasses), lenses and rims for glasses (except sunglasses);

2) medical services rendered by medical organizations and/or institutions, including physicians engaged in private medical practice except for beauty treatment, veterinary and sanitary-and-epidemiological services. Limitations established by the present Subitem shall not apply to veterinary and sanitary-and-epidemiological services funded from the budget. For the purposes of the present Chapter, the following shall be referred to as medical services:

services defined by the list of services granted under obligatory medical insurance;

services rendered to the population in diagnostics, prevention and treatment irrespective of forms and sources of payment for such under the list approved by the Government of the Russian Federation;

services in the collection of blood from the population which are rendered under agreements with stationary medical establishments and by out-patient departments;

first aid services rendered to the population;

services in the duty of medical staff at a patient's bed;

pathology-anatomic services;

services rendered to pregnant women, infants, disabled persons and drug addicts under treatment;

3) services in the care for the ill, disabled and senior citizens granted by the state and municipal authorities of social protection to the persons, the necessity of care for whom is confirmed by appropriate conclusions of bodies of public health services and bodies of social protection of the population;

4) services in the care for children at pre-school establishments, holding of classes with minor children in hobby groups, circles (including sports ones) and studios;

5) food products produced directly by canteens of universities and schools, canteens of other educational institutions, canteens of medical organizations, children's pre-school establishments and sold by them to aforesaid establishments, and also food products manufactured directly by organizations of public catering and sold by such to aforesaid canteens or to said institutions.

The provisions of the present Subitem shall be applied to canteens of universities and schools, canteens of other educational institutions, messes of medical organizations only if these establishments are entirely or partially financed from the budget or from resources of obligatory medical insurance funds;

6) services in conservation, acquisition and use of archives rendered by archive establishments and organizations;

7) services in the carriage of passengers:

by urban public passenger transport (except for taxis, as well as mini-buses). For the purposes of the present Article, services in the carriage of passengers by urban public passenger transport shall include services in the carriage of passengers under uniform conditions of carriage of passengers, including at single travel tariffs established by bodies of local self-government which grant all privileges for travel approved in due order;

seagoing, river, railway or motor transport (except for taxis, as well as mini-buses) in suburban transport, provided passengers are carried at single tariffs and all travel privileges are granted as approved in due order;

8) undertaker's services, works (services) in the manufacture of gravestone monuments and registration of graves, and also sale of funeral accessories (according to a list endorsed by the government of the Russian Federation);

9) postage stamps (except for collectable stamps), marked cards and marked envelopes, lottery tickets of lotteries conducted by decisions of the authorized body;

10) services in the provision of living quarters in the housing stock of all forms of ownership;

11) coins made of precious metals (except for collectable coins) which are the currency of the Russian Federation, or currency of foreign states.

Collector's precious metal coins shall include the following:

precious metal coins being the currency of the Russian Federation or the currency of a foreign state (a group of states) coined according to the mirror surface technology;

precious metal coins not being the currency of the Russian Federation or the currency of a foreign state (group of states);

12) shares in the authorized (pooled) capital of organizations, shares in unit funds of co-operatives and unit investment funds, securities and instruments of time transactions (including forward and future contracts and options);

13) services rendered without collection of an extra charge to repair and maintain goods and household devices, including medical goods during their warranty period, including the cost of spare parts and details for such;

14) services in the field of education involving industrial practice (according to the areas of basic and further education as stated in the license) or educational process, except for consulting services, and also services in letting out premises performed by non-commercial educational organizations.

Sale by non-commercial education organizations of goods (works, services) as their own products (produced by educational institutions, including industrial practice workshops within the framework of basic and further education), and also those bought from outside sources shall be subject to taxation irrespective whether the income from this sale is directed to the educational institution in question or to immediate needs of the development, improvement of the educational process;

15) repair and restoration, mothballing and rehabilitation works performed in the restoration of historical and cultural monuments protected by the state, religious buildings and structures used by religious organizations (except for archaeological and earth works in zones adjacent to historical and cultural monuments or cult buildings and structures; civil engineering works in the reconstruction of monuments completely lost to history and culture or of cult buildings and structures; works in the manufacture of restoration, mothballing of structures and materials; activities to control quality of performed works);

16) works performed during the sale of target-oriented socio-economic programs (projects) of housing construction for servicemen within the framework of implementation of aforesaid programs, including:

works in the construction of social, cultural purpose or amenities and the associated infrastructure;

works in the creation, construction and maintenance of centers for professional retraining of servicemen, persons discharged from military service and members of their families.

Operations listed in the present Subitem are not subject to taxation (are exempted from taxation), provided these works are financed solely and directly to the charge of loans or credits granted by international organizations and/or governments of foreign states, foreign organizations or natural persons pursuant to inter-governmental or interstate agreements, a party to which is the Russian Federation, and also agreements signed by authorized bodies of state administration on instruction of the Government of the Russian Federation;

17) services rendered by bodies authorized thereto, for which a state duty is collected, all kinds of license, registration and patent fees and charges and also tolls and duties collected by state bodies, bodies of local self-government, by other authorized bodies and officials when granting certain rights to organizations and natural persons (including wood charges, rent charge to use forest stock and other payments to the budgets for the right to use natural resources);

18) goods placed under the customs treatment of duty free shop;

19) goods (works, services) except for excisable goods and excisable mineral raw materials sold (performed, rendered) within the framework of rendering gratuitous help (assistance) to the Russian Federation according to the Federal Law on Gratuitous Help (Assistance) to the Russian Federation and Addenda and Amendments to Certain Laws of the Russian Federation on Taxes and on the Establishment of Privileges under the Payments to State Extra-Budgetary Funds in Connection with the Granting of Gratuitous Help (Assistance) to the Russian Federation.

Sale of goods (works, services) listed in the present Subitem shall not be taxable (exempted from taxation) upon submission to the tax authorities of the following documents:

the contract (copy of the contract) of the taxpayer with the donor of the gratuitous help (assistance) or with the recipient of the gratuitous help (assistance) to deliver goods (perform works, render services) within the framework of rendering the gratuitous help (assistance) to the Russian Federation;

certificate (notarized copies of the certificate) issued in due order and confirming that the delivered goods (performed works, rendered services) are classed as humanitarian or technical help (assistance);

bank statement confirming that proceeds have actually been receive on the taxpayer's account in a Russian bank for the goods (works, services) sold to the donor of free aid (assistance) or to a beneficiary of free aid (assistance).

If a contract has a clause calling for settlements in cash a bank statement shall be submitted to a tax body to acknowledge the payment of the amounts of money received by the taxpayer into the taxpayer's account in a Russian bank and also copies of cash receipt slips confirming the actual receipt of proceeds from the buyer of the said goods (works, services);

20) services rendered by establishments of culture and arts in the area of culture and arts, which include:

services in letting out audio and video media on hire from the stock of said establishments, of sound and technical equipment, musical instruments, stage facilities, costumes, footwear, theatrical props, properties, wigmaker's accessories, articles for cultural needs, animals, exhibits and books; services in the making of copies for educational purposes and teaching aids, services in photocopying, reproduction, photo-copying, making of microcopies of printed matter, museum exhibits and documents from stocks of aforesaid establishments; services in making sound recordings of theatre shows, cultural-and-educational and entertainment shows, in the production of copies of sound recordings from sound records of aforesaid establishments; services in the delivery of printed matter from stocks of libraries to readers and receipt thereof from the readers; services in drafting lists, reports and catalogues of exhibits, materials and other articles and collections making up stocks of aforesaid establishments; services in hiring out scenic and concert areas to other budget funded institutions of culture and arts, and also services in the distribution of tickets specified in paragraph three of the present Subitem;

sale of admission tickets and seasonal tickets to theatre-and-entertainment, cultural-and-educational activities and entertainment shows, side-shows in zoological gardens and parks of culture and rest, excursion tickets and places in tourist groups on a form duly authorized as a strict accountability form;

sale of programs at performances and concerts, catalogues and booklets.

To establishments of culture and arts for the purposes of the present Chapter, theaters, cinemas, concert organizations and collectives shall be referred theatrical and concert box offices, circuses, libraries, museums, exhibitions, houses and palaces of culture, clubs, houses (in particular of cinema, writers', composers' houses), planetaria, parks of culture and recreation, lecture halls and popular universities, excursion bureaus (safe for tourist excursion bureaus), reserves, botanical gardens and zoos, national parks, natural parks and landscape parks;

21) works (services) in the production of cine-products performed (rendered) by organizations of cinematography, of rights to use (including hire and show) cine-products which have received the national film certificate;

22) services rendered directly at airports of the Russian Federation and in the air space of the Russian Federation in the service of aircraft, including aero-navigation services;

23) works (services including repair ones) in the service of seagoing and inland watercraft within mooring periods (all kinds of harbour dues, services of port craft), as well as pilotage;

24) services of pharmaceutical institutions with regard to production of medicines, as well as to manufacture and repair of spectacle lenses (safe for sunglasses), to repair of hearing aids and the prosthetic-and-orthopedic articles enumerated in Subitem 1 of Item 2 of this Article, services related to prosthetic-and-orthopedic assistance.

3. The following operations shall not be subject to taxation (tax exempt) on the territory of the Russian Federation:

1) sale (transfer for own needs) of religious use objects and religious literature (according to the list approved by the Government of the Russian Federation upon submission by religious organizations (associations), the former being produced and sold by religious organizations (associations), by organizations (associations) and by organizations owned by religious organizations (associations), as well as by economic companies whose authorized (pooled) capital is composed of the contribution of religious organizations (associations) within the framework of religious activities, apart from excisable goods and mineral raw materials ones and also the organization and holding by aforesaid organizations of religious rites, ceremonies, prayer assemblies or other cult activities;

2) sale (in particular, transfer, performance, provision for own needs) of goods (except for excisable, mineral raw materials and mineral resources, and also other goods according to the list approved by the Government of the Russian Federation upon submission by All-Russian public organizations of disabled persons, works, services (except for broker and other intermediary services), effected and sold by:

public organizations of invalids (including those created as unions of public organizations of invalids) at least 80 per cent of whose membership are invalids and their legal representatives;

organizations whose entire authorized capital consists of contributions of public organizations of invalids specified in paragraph two of the present Subitem if the average active number of invalids among their workers constitutes no less than 50 per cent, and their share in the fund of wages - no less than 25 per cent;

establishments, whose asset's are owned solely by public organizations of invalids specified in paragraph two of the present Subitem and created to achieve educational, cultural, treatment-and-health improvement, physical culture and sports, scientific, information related and other social purposes, and also to render legal and other help to disabled, disabled children and their parents;

health treatment and industrial (labour) workshops at anti-tuberculousis, psychiatric, psycho-neurological establishments, establishments of social protection or social rehabilitation of population;

3) the accomplishment of banking transactions by banks (save cash collection), in particular:

raising organisations' and individuals' funds as deposits;

placing borrowed funds of organisations and individuals in the name of banks and on the account of the banks;

opening and keeping organisations' and individuals' bank accounts;

effecting settlements on the instructions of organisations and individuals, in particular, correspondent banks, on their bank accounts;

providing cash services to organisations and individuals;

purchasing/selling foreign currency in cash and in cashless form (in particular, providing mediation services relating to transactions of the purchase/sale of foreign currency);

accomplishing transactions in precious metals and precious stones under the legislation of the Russian Federation;

banks issuing bank guarantees and also accomplishing the following transactions:

issuing a surety for a third person as providing for performance of obligations in pecuniary form;

providing services relating to the installation and operation of a "client-bank" system, in particular, providing software and personnel training for the said system;

4) operations performed by organizations that provide information and technological interaction between participants in settlements, including rendering of services in the collection, processing and sending to participants in the settlements of information on bank card operations;

5) performance of certain banking operations by organizations which, according to the legislation of the Russian Federation have the right to perform such without a license of the Central Bank of the Russian Federation;

6) sale of articles of folk art crafts of recognized artistic value (except for excisable goods) whose samples have been registered in the order established by the Government of the Russian Federation;

7) rendering of services in insurance, co-insurance and re-insurance by insurance organizations, and also rendering of services on non-state pension insurance by non-state pension funds.

For the purposes of the present Article, those operations shall be recognized as operations in insurance, co-insurance and reinsurance as a result of which the insurance organization receives:

insurance (remuneration) payments under insurance, co-insurance and reinsurance contracts, including insurance premium payments, and paid reinsurance commission (including a bonus);

interest charged on deposit of the premium under reinsurance contracts and transferred by the reinsured to the reinsurer;

insurance premiums received by the authorized insurance organization which has duly concluded a coinsurance contract for and on behalf of the insurers;

the funds received by the insurer under as subrogation from a person responsible for damage caused to the insurant at the rate of insurance indemnity paid to the insurant;

8) the conducting of lotteries, running of totalizators and holding other games based on risk (including those using game machines) by gambling industry organizations;

9) sale of ore, concentrates and other industrial products containing precious metals, scrap and waste of precious metals for the manufacture and refining of precious metals; sale of precious metals and gems by taxpayers (except for those listed in Subitem 6 of Item 1 of Article 164 of the present Code) to the State Fund of Precious Metals and Gems of the Russian Federation, to the Central Bank of the Russian Federation and banks; sale of gems into raw materials (except for raw diamonds) to be processed by enterprises irrespective of their forms of ownership for subsequent export sale; sale of gems into raw materials to specialized foreign trade organizations, the Central Bank of the Russian Federation and banks; sale of precious metals from the State Fund of Precious Metals and Gems of the Russian Federation to specialized foreign trade organizations, the State Fund of Precious Metals and Precious Stones of the Russian Federation, the Central Bank of the Russian Federation and banks, and also precious metals in ingots by the Central Bank of the Russian Federation and banks provided that these ingots remain in a certified vault (the State Vault of Valuables, the vault of the Central Bank of the Russian Federation or vaults of banks);

10) sale of raw diamonds to processing enterprises of all forms of ownership;

11) intrasystem sale (transfers, performance, rendering for own needs) of goods produced (performed works, rendered services) by organizations and establishments of the penitentiary system;

12) transfer of goods (execution of works, rendering of services) free of charge within the framework of charities according to the Federal Law on Charities and Charitable Organizations, except for excisable goods;

13) sale of entrance tickets whose form is approved in the established manner as a strict accountability form, by organizations of physical culture and sports for entrance to sports and entertainment activities they conduct; rendering of services in leasing out sports facilities to conduct aforesaid activities;

14) rendering services by members of bar associations, as well as rendering services by bar associations (by institutions thereof) to members of these bar associations in connection with the exercise by them of their professional activities;

15) rendering of financial services on granting loans in cash;

16) performance of research and development works at the expense of funds of budgets, and also funds of the Russian Fund for Fundamental Research, the Russian Fund for Technological Development and extra-budgetary funds of ministries, departments and associations formed for these purposes according to the legislation of the Russian Federation; performance of research and development works by educational and research institutions and under economic contracts;

17) sale of scientific and educational book products and also editorial, publishing and polygraphic activity in its production and sale;

18) services of sanatoriums, resorts, health improvement and recreational establishments located on the territory of the Russian Federation which are formalized by authorizations to a course of treatment with board or without it, being strict accountability forms;";

19) performance of works (rendering of services) in the fighting of wood fires;

20) sale of products of own manufacture of organizations engaged in the production of agricultural products which generate at least 70 per cent of the overall share of incomes from the sale in the total sum of their incomes, the former made with wages in kind for labour, issues in kind for labor, and also for the public catering of workers involved in agricultural works;

21) sale of products of mass media, and printed matter associated with education, science and culture; editorial, publishing and polygraphic works and services in the production of mass media products and books associated with education, science and culture.

The present Subitem shall not apply to mass media products of advertising or erotic nature nor to printed matter of advertising or erotic character.

4. If the taxpayer performs taxable operations and operations which are not taxable (being released) according to provisions of the present Article, the taxpayer is obliged to keep separate accounting of such operations.

5. A taxpayer performing operations in the sale of goods (of works, services) stipulated by Item 3 of the present Article shall have the right to refuse the release of such operations from taxation having presented an appropriate application to the tax authorities at the place of their registration as a taxpayer no later than by the 1st tax period starting from which the taxpayer is going to refrain from the release or to suspend the latter.

Such refusal or suspension is possible only concerning all operations performed by the taxpayer stipulated by one or several Subitems of Item 3 of the present Article. A similar operation may not be released or not tax exempt depending on who the buyer (purchaser) of the corresponding goods (works, services) is.

It is not permitted to refuse or suspension release from tax obligation operations for a period of less than one year.

6. Operations listed in the present Article shall not be subject to taxation (tax exempt), provided the taxpayers performing these operations hold the appropriate licenses to carry out the licensed activity according to the legislation of the Russian Federation.

7. Release from tax obligation according to provisions of the present Article shall not apply when business activities are performed in the interests of other persons on the basis of contracts of delegation, contracts of commission agency or agency contracts, except as otherwise provided in the present Code.

8. In the event of amending the wording of Items from 1 to 3 of this Article (cancellation of a relief from taxation or referring taxable operations to the operations which are exempt from taxation) taxpayers shall apply the procedure for determining the tax base (or for relief from taxation) which was effective on the date of shipping goods (carrying out works and rendering services), regardless of the date of paying them.