Article 219. Social Tax Deductions

1. When determining the size of the tax base according to Item 2 of Article 210 of the present Code, the taxpayer shall be entitled to the following social tax deductions:

1) in the amount of incomes transferred by the taxpayer to charities in the form of assistance in cash to organizations of science, culture, education, public health services and social security, partially or fully funded from appropriate budgets, and also to organizations of physical culture and sports, educational and pre-school establishments for needs of physical education of citizens and to the upkeep of sports teams in the amount of actually effected expenses, as well as in the amount of donations transferred (paid) by a taxpayer to religious organizations for exercising by them of the activities stipulated by their statutes, but no more than 25 per cent of the amount of income received over a tax period;

2) in the amount paid by the taxpayer over a tax period for his education at educational establishments - in the amount of actually effected expenses for education, but no more than 25,000 roubles, and also in the amount paid by the taxpayer - a parent for education of his children of up to 24 years of age in the day time format of education in educational establishments, - in the amount of actually effected expenses for this education but no more than 25,000 roubles per child in total for both parents.

Said social tax deduction shall be granted, provided the educational establishment has a corresponding license or another document confirming the status of the educational institution, and also upon submission by the taxpayer of documents confirming his actual expenses for training.

The social tax deduction is granted for the period of education of said persons in an educational institution, including a leave of absence which was duly taken during education;

3) in the amount paid by the taxpayer during a tax period for services in treatment granted to him by medical establishments of the Russian Federation, and also paid by the taxpayer for services in treatment of his/her spouse, his/her parents and (or) his/her children of up to 18 years of age in medical establishments of the Russian Federation (according to the list of medical services approved by the Government of the Russian Federation), and also in the amount of the cost of drugs (according to the list of drugs approved by the Government of the Russian Federation) prescribed to him by a treating doctor and purchased by taxpayers at their own expense.

The total amount of social tax deduction laid down by the present Subitem can not exceed 25,000 roubles.

For expensive types of treatment in medical establishments of the Russian Federation, the amount of tax deduction shall be accepted in theamount of actually borne expenses. The list of expensive types of treatment shall be approved by a decision of the Government of the Russian Federation.

The deduction of amounts of payment of treatment cost shall be granted to the taxpayer if the treatment took place in the medical establishments that have the required licenses to engage in medical activities, and also if the taxpayer submits documents confirming his actual expenses for the treatment and purchase of drugs.

Aforesaid social tax deduction shall be granted to the taxpayer if the treatment and purchased drugs were not paid for by an organization to the charge of funds of employers.

2. Social tax deductions shall be granted on the basis of written application of the taxpayer when the taxpayer submits his tax declaration to the tax authorities upon the lapse of the tax period.

Article 220. Property Tax Deductions

1. When determining the size of the tax base according to Item 2 of Article 210 of the present Code, the taxpayer shall be entitled to the following property tax deductions:

1) In the amounts received by the taxpayer over a tax period from the sale of apartment houses, flats, summer cottages, garden houses or land plots which have been owned by the taxpayer for less than five years, but in general not more than 1,000,000 roubles, and also in the amount received in a tax period from sale of other property which has been owned by the taxpayer for less than three years, but not more than 125,000 roubles. When selling apartment houses, flats, summer cottages, garden houses and land plots which have been owned by the taxpayer for five years or more, and also other property which have been owned by the taxpayer for three years and more, the property tax deduction shall be granted in the amount received by the taxpayer through sale of said property.

Instead of exercising his right to property tax deduction stipulated by the present Subitem, the taxpayer shall have the right to reduce the amount of taxed incomes by the amount of his actual expenses, proved by documents, and involved in the receipt of these incomes, except for sale by the taxpayer of securities owned by him.

The peculiarities of tax base calculation, of the calculation and payment of the tax on incomes under transactions in securities and transactions in time deal instruments of which the base asset is securities are established by Article 214.1 of the present Code.

When selling property that is in common share or common joint ownership, the appropriate size of property tax deduction calculated according to the present Subitem shall be distributed between the co-owners of this property in proportion to their share or under an arrangement between them (in case of sale of property that is in common joint ownership).

The provisions of the present Subitem shall not apply to incomes received by individual businessmen from sale of property in connection with performance of their business activities;

2) In the amount spent by the taxpayer for new construction or acquiring on the territory of the Russian Federation of an apartment house or a flat, in the amount of his actual expenses, and also in the amount used to repay a mortgage received by the taxpayer in banks of the Russian Federation and actually spent by him on new construction or on the purchase of an apartment house or flat on the territory of the Russian Federation.

The overall size of property tax deduction defined by the present Subitem can not exceed 600,000 roubles disregarding amounts used to repay a mortgage received by the taxpayer in banks of the Russian Federation and actually spent by him on new construction or on the purchase of an apartment house or flat on the territory of the Russian Federation.

Aforesaid property tax deduction shall be granted to the taxpayer on the basis of the taxpayer's written application and documents confirming the property title to a bought (constructed) apartment house or a flat, and also duly made out payment documents confirming that the taxpayer paid money resources (receipts to credit slips, bank abstracts on transfer of money resources from the buyer's accounts to an account of the vendor, documentary and cash vouchers, certificates on purchase of materials from natural persons, including details on the address and passport data of the vendor and other documents).

When acquiring property in common share or common joint ownership, the size of property tax deduction computed according to the present Subitem shall be distributed between the co-owners according to their share in the ownership or with their written application (in case of acquiring an apartment house or flat into common joint ownership).

The property tax deduction laid down by the present Subitem shall not apply in cases when the payment of expenses to construct or to purchase an apartment house or flat for the taxpayer is made to the charge of funds of employers or other persons, and also in cases when the purchase and sale transaction of an apartment house or flat is performed between related natural persons according to Item 2 of Article 20 of the present Code.

A taxpayer may not be granted repeated property tax deduction stipulated by the present Subitem.

If over a tax period the property tax deduction can not be used entirely then its balance can be rolled over to the subsequent tax periods until it is exhausted.

2. Property tax deductions (except tax property deductions relating to transactions in securities) shall be granted on the basis of a written application of the taxpayer when the taxpayer submits his tax declaration to tax authorities upon the lapse of the tax period.

When tax base is being calculated in relation to transactions in securities a tax property deduction shall be granted in accordance with the procedure established by Article 214.1 of the present Code.

Article 221. Professional Tax Deductions

When calculating the tax base according to Item 2 of Article 210 of the present Code, the following categories of taxpayers shall be entitled to professional tax deductions:

1) taxpayers listed in Item 1 of Article 227 of the present Code in the amount actually spent by them and proved by documents expenses directly involved in the generation of incomes.

In so doing, said expenses shall be accepted for deduction in the composition determined by a taxpayer independently in the procedure similar to that for determining expenses for the purposes of taxation established by the Chapter "Tax on Profits of Organizations"

The amounts of personal property tax paid of taxpayers defined in the present Subitem shall be accepted for deduction if this property being an item of taxation according to Articles of the Chapter "The Personal Income Tax" (except for apartment houses, flats, summer cottages and garages) is directly used to carry out business activity.

If the taxpayers can not provide documentary evidence of expenses connected with their activity as individual businessmen, the professional tax deduction shall be made at the rate of 20 per cent of the total amount of incomes received by the individual businessman from business activity. The present provision shall not apply to natural persons engaged in business activity without the formation of legal person, but who have not registered as individual businessmen;

2) taxpayers receiving incomes from performance of works (rendering of services) under civil contracts, - in the amount of their actual expense supported by documents - the former being directly involved in the performance of these works (rendering of services);

3) taxpayers receiving awards or compensation for creating, performance or another use of works of science, literature of art, compensation to authors of discoveries, inventions and industrial models in the amount of their actual expense supported by documents.

If these expenses can not be supported by documents they shall be accepted for deduction in the following amounts:

_________________________________________________________________________
|                                                        | Stantard rate|
|                                                        | of expenses  |
|                                                        | (in per cent |
|                                                        |  to amount   |
|                                                        | of accrued   |
|                                                        |   income)    |
_________________________________________________________________________
|Creation of literary works, including those for theatre,|              |
|cinema, variety artists, circus                         |       20     |
|Creation of fine arts and graphic works, photo works    |              |
|for publications, architecture and design works         |       30     |
|Creation of sculptures, monumental and decorative       |              |
|paintings, works of decorative and applied arts, works  |              |
|of easel-painting, of theatre and cinema arts           |              |
|and graphical works of                                  |              |
|various techniques                                      |       40     |
|Creation of audio-visual works (video, television and   |              |
|cinema films)                                           |       30     |
|Creation of musical works:                              |              |
|musical and scenic works, (operas, ballet performances, |              |
|musical comedies), symphonic, choral, chamber works,    |              |
|works for brass bands, original music for cinema films, |              |
|television and video films and                          |              |
|theatre productions                                     |       40     |
|other musical works, including those                    |              |
|prepared for publication                                |       25     |
|Performance of works of literature and arts             |       20     |
|Creation of scientific works and designs                |       20     |
|Discoveries, inventions and creation of industrial      |              |
|models (to the amount of income received over the first |              |
|two years of their use)                                 |       30     |
_________________________________________________________________________

For the purposes of the present article "taxpayer's expenses" also include the amounts of tax envisaged by the applicable tax and fee legislation in respect of the kinds of activity specified in the present article (except the tax on incomes of natural persons) accrued or paid by the taxpayer in the tax period.

When determining the tax base, the expenses confirmed by documents can not be taken into account at the same time as the expenses within the limits of the authorized norms.

The taxpayers specified in the present Article shall exercise their right to professional tax deductions upon filing an application in writing with a tax agent.

In the absence of a tax agent the taxpayers specified in the present Article shall exercise their right to professional tax deductions upon filing an application in writing with a tax body simultaneously with filing a tax return on the expiry of a tax period.

Article 222. Authorities of Legislative (Representative) Bodies of the Constituent Entities of the Russian Federation in the Establishment of Social and Property Deductions

Within the limits of social tax deductions established by Article 219 of the present Code, and property tax deductions established by Article 220 of the present Code legislative (representative) bodies of the constituent entities of the Russian Federation may establish other amounts of deductions with due account of their own region.

Article 223. The Date of Actual Receipt of Income

1. For the purposes of the present Chapter, unless otherwise stipulated by Item 2 of the present Article, the date of actual receipt of income shall be defined as the day of:

1) disbursement of income, including the transfer of the income to accounts of the taxpayer held with banks or by his instruction to accounts of third persons at the receipt of incomes in cash;

2) transfer of incomes in kind - when incomes are received in kind;

3) payment by the taxpayer of interest on received borrowed (credit) funds, on purchase of goods (works, services), on purchase of securities if incomes are received in the form of material benefit.

2. Upon the receipt of income in the form of remuneration for labour, the date of actual receipt by the taxpayer of such an income shall be defined as the last day of the month for which the income for performed job duties was charged to him according to the labour contract (the agreement).

Article 224. Tax rates

1. The tax rate shall be established in the amount of 13 per cent, unless otherwise stipulated by the present Article.

2. The tax rate shall be established in the amount of 35 per cent concerning the following incomes:

cost of prizes and prizes received in competitions, games and other activities held with the purposes of advertising goods, works and services, in the part exceeding the amounts stated in Item 28 of Article 217 of the present Code;

insurance under voluntary insurance contracts in the part exceeding the amounts stated in Item 2 of Article 213 of the present Code;

an income earned as interest on bank deposits in as much as it concerns the surplus of an amount calculated proceeding from three quarters of the refinancing rate of the Central Bank of the Russian Federation, within the period for which the interest is accrued in relation to rouble deposits (except time pension deposits put into the account for a term of at least six months) and nine per cent annual rate in relation to foreign currency deposits and also incomes earned as interest on time pension deposits put into account before January 1, 2001 for a term of at least six months, in as much as it concerns the surplus of an amount calculated proceeding from the effective refinancing rate of the Central Bank of the Russian Federation in the period for which the interest is accrued;

amounts of economic gain on interest when the taxpayers receive borrowed funds in the part exceeding the amounts specified in Item 2 of Article 212 of the present Code.

3. The tax rate shall be established in the amount of 30 per cent with respect to all the incomes received by natural persons who are not tax residents of the Russian Federation.

4. The tax rate shall be established in the amount of six per cent with respect to the incomes from the share participation in the activity of organisations received in the form of dividends.