Article 164. Tax Rates

1. Taxation shall be imposed at 0 per cent tax rate on the sale of:

1) goods (except for petroleum, including stable gas condensate and natural gas exported to territories of member states of the Commonwealth of Independent States) that have been exported under the custom treatment of export provided that documents required under Article 165 of the present Code are submitted to the tax authorities;

2) works (services) directly involved in the manufacture and sale of goods specified in Subitem 1 of the present Item.

The provision of the present subitem shall apply to works (services) in the escorting, transporting, loading and trans-shipment of goods exported from the territory of the Russian Federation and those imported to the Russian Federation (the former being performed by Russian carriers), and other similar works (services), and also works (services) in the processing of goods placed under the customs treatments of processing of goods in the customs territory and under customs control;

3) works (services) directly associated with the carriage (transportation) across the customs territory of the Russian Federation of goods that have been placed under the customs treatment of transit across aforesaid territory;

4) services in the carriage of passengers and luggage on condition that the departure point or destination point of passengers and luggage is located outside of the territory of the Russian Federation, provided the carriage is registered on the basis of uniform international documents of carriage;

5) works (services) performed (rendered) directly in outer space, and also the scope of preparatory works (services) on grounds that are technologically determined by and form an integral part of works (services) performed (rendered) directly in outer space;

6) precious metals by taxpayers extracting such or producing the former from scrap and waste containing precious metals. To the State Fund of Precious Metals and Jewels of the Russian Federation, the Central Bank of the Russian Federation, banks;

7) goods (works, services) for official use by foreign diplomatic representations and agencies equated to such or for personal use by diplomatic or administrative-clerical personnel of such agencies, including members of their families staying with them. The sale of goods (performance of works, rendering of services) specified in the present Subitem shall be subject to taxation at 0 per cent when the legislation of the corresponding foreign state establishes a similar order concerning diplomatic agencies and those equated to such, of the Russian Federation, diplomatic and administrative-clerical personnel of such agencies (including members of their families staying with them), or if such standard is stipulated in an international treaty of the Russian Federation. The list of foreign states concerning whose agencies the standards of the present Subitem are applied shall be defined by a federal body of executive power governing relations of the Russian Federation with foreign states and international organizations jointly with the Ministry of Taxation of the Russian Federation.

The order of application of the present Subitem shall be established by the Government of the Russian Federation.

8) supplies exported from the territory of the Russian Federation under the customs treatment of movement of supplies. For the purposes of this Article supplies shall mean fuel and combustive-lubricating materials which are necessary for ensuring the normal operation of aircraft and sea ships, as well as mixed navigation vessels (for rivers and sea).

2. Taxation shall be imposed at 10 per cent in case of sale of:

1) the following food articles:

cattle and poultry in live weight;

meat and meat products (except for gourmet articles: tenderloin, veal, tongue, sausage articles - fresh smoked of best quality, fresh smoked semi-dry, of best quality, fresh seasoned, stuffed of best quality; smoked articles made of pork, mutton, beef, veal, poultry - balyk, karbonade, neck, ham, pastorma, loin; baked pork and beef; canned ham, bacon, karbonade and tongue in marinade);

milk and diary products (including ice-cream produced on their basis, except for ice-cream produced on a fruits-and-berry basis, fruit and food ice);

eggs and egg based products;

vegetable oil;

margarine;

sugar, including raw sugar;

salt;

grain, compound food, fodder mixes, grain waste;

oilseeds and products of their processing (coarsely cut, oilcakes);

bread and baked food articles (including fancy bread, rusk and roll articles);

groats;

flour;

pasta;

live fish (except for valuable species: white salmon, Baltic and Far Eastern salmon, sturgeon (beluga, bester, sturgeon, sevryuga, sterlet), salmon, trout (except for sea trout), nelma, keta, chavycha, kizhuch, muksun, omul, Siberian and Amur sig, chir);

seafood and fish products, including cooled, frozen or of another kind of processing, herring, canned food and pickled canned food (except for gourmet articles: caviar of sturgeon and salmon species; of white salmon, Baltic salmon, of sturgeon fish - beluga, bester, sturgeon, sevryuga, sterlet; salmon; backs and flanks of nelma, cold smoked; light-, medium- and semuzh- pickled keta and chavycha; backs of keta, chavycha and cold smoked kizhuch, flanks of keta and sides of cold smoked chavycha; backs of muksun, omul, Siberian and Amur sig, cold smoked chir; pickled canned fillet slices of Baltic salmon and Far Eastern salmon; crab meat and sets of cooked-and-frozen separate limbs of crabs; of spiny lobsters);

children's and diabetic foods;

vegetables (including potatoes);

2) the following goods for children:

knitted articles for the newborn and children of day care, pre-school, junior and senior school age groups: outdoor knitted articles, knitted underwear articles, socks and stockings, other knitted articles: gloves, mittens, headgear;

ready-made garments, including garments made of natural sheepskin and rabbit (and likewise ready-made garments from natural sheepskin and rabbit with leather insets) for new born children and for children of nursery age, pre-school, junior and senior school age, outer clothing (including dresses and suits), underwear articles, headgear, clothes and articles for new-born children and children of nursery age. The provisions of this Paragraph shall not extend to ready-made garments made of natural leather and natural fur, safe for natural sheepskin and rabbit;

footwear (except for sports): footwear for the newborn and children of day care groups, of pre-school, and school; made of felt or rubber: small children's sizes, childrens, pupils';

children's beds;

children's mattresses;

perambulators;

school exercise-books;

toys;

plasticine;

pencil cases;

counting sticks;

school abacuses;

school diaries;

drawing-books;

albums for drawing;

albums for plotting;

folders for exercise-books;

covers for textbooks, diaries, exercise-books;

holders of cards with figures and letters;

diapers.

3) periodical printed publications, except for periodical printed publications of advertising or erotic nature;

education, science and culture books, safe for promotional and erotic books;

the services of forwarding and delivery of the periodical printed publications and books specified in Paragraphs 1 and 2 of the present subitem;

the editorial and publishing works (services) related to the production of periodical printed publications and books indicated in Paragraphs One and Two of this Subitem;

the services of placing advertisements and information announcements in the periodical printed publications specified in Paragraph 1 of the present subitem;

the services of drawing up and accomplishment of a subscription contract relating to the periodical publications specified in Paragraph 1 of the present subitem, in particular, the services of delivery of a periodical printed publication to the subscriber if there is a provision for the delivery in the subscription contract.

For the purposes of the present subitem the "periodical printed publication" is a newspaper, magazine, almanac, bulletin, another publication with a permanent title, current number and issued at least once a year.

For the purposes of the present subitem the "periodical printed publications of advertising nature" are periodical printed publications in which advertisement occupies over 40 per cent of the volume of one issue of the periodical publication;

4) the following medical goods, Russian and foreign-made:

medicinal preparations, in particular medicinal substances including in particular those made by a chemist's shop;

medical-purpose articles.

3. Taxation shall be made at the 20 per cent tax rate in the cases not specified in Items 1, 2 and 4 of the present Article.

4. When receiving monetary assets connected with payments for the goods (works and services) provided for by Article 162 of the this Code, when deducting the tax by tax agents in compliance with Article 161 of this Code, when selling property purchased elsewhere and taxable under Item 3 of Article 154 of this Code, when selling agricultural products and products of processing thereof in compliance with Item 4 of Article 154 of this Code, as well as in other cases where in compliance with this Code the amount of the tax should be determined by way of calculations, the tax rate shall be determined as percentage of the tax rate provided for by Item 2 or Item 3 of this Article, to the tax base taken as 100 and increased by the appropriate amount of the tax rate.

5. In case of the import of goods to the customs territory of the Russian Federation, the tax rates specified in Items 2 and 3 of the present Article shall be applied.

6. Under operations of the sale of goods (works, services), stipulated by Subitems 1 - 7 of Item 1 of the present Article, the taxpayer shall submit a separate tax declaration to the tax authorities.