Article 174. The Order and Terms of Payment of Tax to the Budget

1. The payment of tax in respect of transactions recognised as tax basis in compliance with Subitems 1 - 3 Item 1 Article 146 of the present Code, on the territory of the Russian Federation shall be effected according to the results of each tax period and on the basis of actual sale (transfer) of goods (performance of works, including those for own needs, rendering of services, including those for own needs) over the lapsed tax period no later than the 20th day of the month following the lapsed tax period, unless otherwise is stipulated by the present Chapter.

If goods are imported to the customs territory of the Russian Federation, the amount of tax payable to the budget shall be paid according to the customs legislation.

2. The amount of tax payable to the budget under operations of sale (transfer, performed, rendered for own needs) goods (works, services) on the territory of the Russian Federation shall be paid at the place of registration of the taxpayer with tax authorities.

3. The tax agents (organizations and individual businessmen) shall pay the amount of tax at the place of their location.

4. The payment of tax by persons specified in Item 5 of Article 173 of the present Code shall be made on the basis of results of each tax period according to the appropriate sale of goods (works, services) over the lapsed tax period no later than the 20th day of the month following the completed tax period.

5. Taxpayers (tax agents), including those listed in Item 5 of Article 173 of the present Code are obliged to submit to the tax authorities at the place of their registration an appropriate tax declaration no later than the 20th day of the month following the lapsed tax period, unless otherwise stipulated by the present Chapter.

6. Taxpayers who over a quarter generate monthly proceeds from the sale of goods (works, services), disregarding the tax and sales tax, the former not exceeding 1 mil. roubles shall have the right to pay the tax on the basis of actual sale (transfer) of goods (performance of works, including those for own needs, rendering of services, including those for own needs) for the completed quarter no later than the 20th day of the month following the lapsed quarter.

Taxpayers making quarterly tax payments shall submit their tax declaration no later than the 20th day of the month following the lapsed quarter.

Article 176. The Order of Tax Reimbursement

1. If, on the basis of results of a tax period, the amount of tax deductions exceeds the total amount of tax computed in respect of the transactions recognised as tax basis under Subitems 1-2 Item 1 Article 146 of the present Code, the received difference shall be subject to reimbursement (offset, return) to the taxpayer according to the provisions of the present Article.

2. The said amount shall be allocated within three calendar months following the past tax period towards performing under the taxpayer's duties to pay taxes and fees, in particular the taxes payable in connection with the movement of goods across the customs border of the Russian Federation, towards the payment of penalty, repayment of arrears, tax sanction amounts adjudged to the taxpayer and subject to entry in the same budget.

The tax bodies shall accomplish the offset on their own and they shall do it in agreement with the customs bodies when it concerns the taxes payable in connection with the movement of goods across the customs border of the Russian Federation, with taxpayer being notified about the offset within ten days after the date when it was accomplished.

3. Upon the expiration of three calendar months following the past tax period the amount which has not be taken into account shall be subject to refund for the benefit of the taxpayer on his written application.

Within two weeks after receipt of aforesaid application, the tax authorities shall decide as to a repayment the said amount for the benefit of the taxpayer from an appropriate budget and within the same time shall direct this decision for performance to a corresponding body of the federal treasury. Aforesaid amounts shall be repaid by bodies of the federal treasury.

The amounts shall be returned by bodies of the federal treasury within two weeks starting from the day of receipt of aforesaid decision of the tax authority. If such decision is not received by the appropriate body of federal treasury within seven days starting from the day it was sent by the tax authorities, the eighth day starting from the day such decision was sent by the tax authorities shall be defined as the receipt date of such a decision.

If the deadlines established by the present Item for an amount returnable to the taxpayer are not kept, interest shall be charged on the basis of one three hundred sixtieth of the refinancing rate of the Central Bank of the Russian Federation per deferment day.

4. The amounts stipulated by Article 171 of the present Code concerning operations in the sale of goods (works, services) stipulated by Subitems 1 - 6 and 8 of Item 1 of Article 164 of the present Code, and also amounts of tax calculated and paid according to Item 6 of Article 166 of the present Code shall be liable to offset (refund) on the basis of a separate tax declaration specified in Item 6 of Article 164 of the present Code and documents stipulated by Article 165 of the present Code.

The reimbursement shall be made no later than three months from the day of submission by the taxpayer of the tax declaration specified in Item 6 of Article 164 of the present Code and documents stipulated by Article 165 of the present Code.

During aforesaid time the tax authorities shall check the justification of the application of the 0 per cent tax rate and tax deductions and take a decision to reimburse by offset or refund the appropriate amounts or to refuse (in full or partially) to reimburse.

If the tax authorities decided to refuse (in full or partially) to reimburse, they are to provide the taxpayer with the motived conclusion no later than 10 days after said decision was taken.

If during the established period the tax authorities have not decided whether to refuse and/or aforesaid conclusion was not presented to the taxpayer, the tax authorities are obliged to accept a compensation award to an amount to which the decision to refuse was not taken and to notify the taxpayer on the decision taken within ten days.

If the taxpayer has any arrears and fines on the tax, arrears and fines on other taxes and fees, or indebtedness on the awarded tax sanctions subject to transfer to the same budget from which the reimbursement is being made, by decision of the tax authority, they shall be offset in the order of priority.

The tax authorities shall offset the aforesaid and inform the taxpayer thereof within 10 days.

If the tax authorities decided on a compensation award, if there are arrears on the tax accrued during a period between the declaration submission date and the date of reimbursement of the appropriate amounts and which does not exceed an amount to be reimbursed by decision of tax authorities, no fine on the arrears shall be charged.

If the taxpayer has no arrears or fines on the tax, any arrears and fines on other taxes and also any indebtedness on awarded tax sanctions subject to transfer to the same budget from which the refund is made, the amounts to be reimbursed shall be offset against current payments on the tax and/or other taxes and fees payable to the same budget, and also on the taxes paid in connection with the movement of goods across the customs border of the Russian Federation and in connection with the sale of works (services) associated directly with the production and sale of such goods, as agreed with the customs authorities, or are to be returned to the taxpayer upon his application.

No later than the last day of the time specified in paragraph two of the present Item, the tax authorities shall take a decision to return tax amounts from the appropriate budget and within the same deadline it shall forward this decision for execution to the appropriate body of the federal treasury.

Bodies of the federal treasury shall refund the amounts within two weeks after they receive the decision of the tax authorities. If such decision is not received by an appropriate body of the federal treasury within seven days starting from the day it was forwarded by the tax authorities, the date of receipt of such a decision shall be recognized as the eighth day starting from the day it was forwarded by the tax authorities.

If the deadlines established by the present Item for an amount refundable to the taxpayer are not kept, interest shall be charged on the basis of the refinancing rate of the Central Bank of the Russian Federation.

Article 177. The Terms and Order of Payment of Tax in Case of Import of Goods to the Customs Territory of the Russian Federation

Terms and order of payment of tax in case of import of goods to the customs territory of the Russian Federation shall be established by the customs legislation of the Russian Federation with allowance for provisions of the present Chapter.

Article 178. The Order of Taxation When Performing Production Sharing Agreements

In the case of performance under production sharing contracts concluded in compliance with the Federal Law on Production Sharing Contracts the tax shall be calculated and paid with allowance for the following features:

exempt from tax shall be goods, works and services intended, according to the project documentation, for the performance of works under the production sharing agreement, including those imported to the customs territory of the Russian Federation by the investor, operator of said agreement, their suppliers, original contractors and carriers and other persons participating in the performance of works under said agreement on the basis of agreements (contracts) with the investor and/or the operator, and services rendered on the territory to the Russian Federation by foreign legal persons to the investors or operators of the production sharing agreements in connection with the performance of works under aforesaid agreements. The payer shall be exempt from payment of the tax, provided an application is submitted to the tax authorities (customs authorities) requesting exemption, which shall enclose the following documents:

a copy of the contract between the operator or supplier (original contractor, carrier) and the investor under the production sharing agreement, or a copy of the contract between the supplier (original contractor, carrier) and the operator on the concrete production sharing agreements provided that the operator is authorized to conclude the contracts on behalf of the investor;

a copy of the invoice (copy of the bill) made out by the supplier (original contractor, carrier) to the investor;

a letter of guarantee of the investor or operator under the production sharing agreements as per the form established by the Government of the Russian Federation confirming that the goods, work and services in question are intended by the project documentation for the performance of works under aforesaid agreement;

copies of transport and shipping documents;

the specified invoice giving the name of goods and their cost in the currency in which accounts are maintained under the agreement and/or in which the tax was calculated on said goods in the absence of exemption.

The order and terms of submission of said documents to the tax authorities shall be established by the Ministry of Taxation of the Russian Federation, and to the customs bodies by the State Customs Committee of the Russian Federation.

If the tax authorities (customs authorities) uncover any unauthorized use of goods, works or services (within the framework of time of their useful life) imported to the customs territory of the Russian Federation covered by a privilege established by the present Article, the value added tax, and fines shall be levied and collected in the order established by the present Code;

exempt from taxation shall be the turnover between the investor and the operator of the production sharing agreement under a gratuitous transfer of goods and materials required to perform works under said agreement, and also operations in the transfer of funds necessary to finance such works according to the estimate approved in the order established by the aforesaid agreement;

exempt from taxation shall be the turnovers in the transfer by the investor to the state of property newly created or bought by the investor and used by him to perform works under an agreement, and subject to transfer to the state according to terms of the agreement;

in the course of calculation of the tax, the investor being party to the production sharing agreement and/or the operator shall deduct from the amount of said tax subject to transfer to the budget during each tax period, all amounts of tax paid by the investor and/or the operator over said period in connection with the performance of works under said agreement;

a difference arising for the investor, being the party to the production sharing agreement and/or operator, in case of excess of amounts of tax paid by the investor and/or the operator in each tax period in connection with the performance of works under said agreement over the amount of said tax computed on sales during this tax period of products, goods (works, services), including in the absence of said sales, shall be reimbursable to the investor and/or operator from the budget at the end of said period in the order and on the terms established by the present Chapter of the Code. If the state fails to comply with said terms, amounts of paid tax subject to reimbursement from the budget shall be marked up on the basis of the refinancing rate of the Central Bank of the Russian Federation in effect during the period in question, if records are kept in the currency of the Russian Federation, or proceeding from the rate if records are kept in foreign currency;

following the start in production of a mineral raw material, the amount of tax not reimbursed to the investor from the budget by the appropriate day and specified according to Paragraph 13 of the present article shall be reimbursed to him to the charge of partial reduction of publicly owned produced products to the amount of its cost equivalent, according to the terms of the agreement;

when performing production sharing agreements concluded up to the entry into force of the Federal Law on Production Sharing Agreements shall be applied the conditions of calculation and payment of the tax established by said agreements from the date of their entry into force.