Chapter 25. Tax on Organisations' Profit

Article 246. Tax Payers

Recognised as the taxpayers of the tax on the profit of organisations (hereinafter in the present Chapter 'the taxpayers') shall be:

- Russian organisations;

- foreign organisations carrying out their activity in the Russian Federation through their permanent representations and (or) receiving incomes from sources situated in the Russian Federation.

Article 247. Object of Taxation

Seen as an object of taxation for the tax on the profit of organisations (hereinafter in this Chapter 'the tax') shall be profit derived by the taxpayer.

Recognised as profit for the purposes of the present Chapter shall be:

1) for Russian organisations - derived incomes, reduced by the amount of the effected expenditures which are defined in conformity with the present Chapter;

2) for foreign organisations performing an activity in the Russian Federation through permanent representations incomes derived through these permanent representations, reduced by the amount of the outlays made by these permanent representations which are defined in conformity with this Chapter;

3) for other foreign organisations - incomes derived from sources situated in the Russian Federation. The incomes of the said taxpayers shall be determined in conformity with Article 309 of the present Code.

Article 248. Procedure for Defining Incomes. Classification of Incomes

1. For the purposes of the present Chapter, to incomes shall be referred:

1) the incomes derived from the sale of commodities (works, services) and of the rights of property (hereinafter, the incomes from sale);

For the purposes of this Article goods shall be defined in compliance with Item 3 of Article 38 of this Code;

2) the extra-sale incomes.

When defining the incomes, from the latter shall be excluded the amounts of the taxes presented in conformity with this Code by the tax payer to the buyer (to the acquirer) of commodities (works, services or property rights).

The incomes shall be defined on the basis of the initial documents and of tax recording documents.

The incomes from sale shall be defined in the order established by Article 249 of the present Code, with account for the provisions of the present Chapter.

The extra-sale incomes shall be defined in the order established by Article 250 of the present Code, with account for the provisions of this Chapter.

2. For the purposes of the present Chapter, the property (works, services) or the rights of property shall be seen as received free of charge, if the receipt of this property (works, services) or of the rights of property is not involved in the emergence of the receiver's duty to pass on the property (rights of property) to the person who is handing them over (to perform certain work for the handing over person or to render a service to the handing over person).

3. Incomes of a taxpayer expressed in foreign currency shall be recorded together with the incomes expressed in roubles.

Incomes of a taxpayer expressed in conventional units shall be recorded together with the incomes expressed in roubles.

Conversion of said incomes shall be effected by a taxpayer depending on the method of recognizing incomes chosen by him in his accounting policy in compliance with Articles 271 and 273 of this Code.

For the purposes of this Chapter, the amounts shown in the composition of a taxpayer's income shall not be subject to a repeated inclusion into the composition of his incomes.

Article 249. Incomes from Sale

1. Recognised as the incomes from sale for the purposes of this Chapter shall be earnings derived from the sale of commodities (works, services) both of own manufacture and of those acquired before, as well as the earnings from the sale of property.

2. The earnings from sale shall be defined proceeding from all the receipts connected with settlements for the sold commodities (works, services) or for the rights of property expressed in the form of money and (or) in kind. Depending on the method of recognizing receipts and expenditures chosen by a taxpayer, proceeds connected with settlements for sold goods (works, services) or the rights of property shall be recognized for the purposes of this Article in compliance with Article 271 and 273 of this Code.

3. The specifics in defining the incomes from sale for the individual categories of the taxpayers, or the incomes from sale derived in connection with particular circumstances shall be established by the provisions of the present Chapter.

Article 250. Extra-Sale Incomes

For the purposes of this Chapter, recognised as extra-sale incomes shall be the incomes not mentioned in Article 249 of the present Code.

In particular, seen as the extra-sale incomes of the taxpayers shall be incomes derived:

1) from share participation in other organisations;

2) from the positive (negative) difference of exchange rates arising when the rate of sale (purchase) of foreign currency is higher (lower) than the official exchange rate of foreign currency established by the Central Bank of Russia on the date of transfer of ownership of the foreign currency ( the specifics of defining the banks' incomes from these transactions are established by Article 290 of this Code);

3) in the form of fines, penalties and (or)other sanctions acknowledged by debtors and subject to payment by debtors on the basis of an effective court decision, as well as of the sums of compensation for losses or for damage;

4) from letting the property for rent (into sub-rent), where such incomes are not determined by a taxpayer in the procedure established by Article 249 of this Code;

5) from giving over to use the rights to the results of intellectual activity and to the means of individualisation equated to them (in particular, from giving over to use the rights arising from patents for inventions, industrial samples and other kinds of intellectual property), where such incomes are not determined by a taxpayer in the procedure established by Article 249 of this Code;

6) in the form of interest received under contracts of borrowing, credit, bank account, bank deposit, as well as on securities and other debt liabilities (the specifics of defining the banks' incomes in the form of interest are established by Article 290 of the present Code);

7) in the form of the sums of replenished reserves, the outlays on whose formation were accepted in the composition of the outlays in the order and on the terms established by Articles 266, 267, 292, 294, 300 324 and 324.1 of the present Code;

8) in the form of the gratuitously received property (works, services) or of the rights of property, with the exception of the cases pointed out in Article 251 of the present Code.

When receiving property (works, services) free of charge, incomes shall be estimated proceeding from the market prices defined subject to the provisions of Article 40 of this Code, but no less than the residual cost determined in compliance with this Chapter, as regards depreciated property, and no less than the cost of production (acquisition), as regards other property (carried out works, rendered services). Information on the prices shall be confirmed by the taxpayer receiving the property (works, services), either in documented form or by making an independent estimate;

9) in the form of income distributed in favour of the taxpayer, if he is a member of a simple partnership, in accordance with the order envisaged by Article 278 of the present Code.

10) in the form of the income of the past years exposed in the accounting (tax) period;

11) in the form of the positive exchange rate difference arising from the revaluation of the property in the form of currency values and of claims (liabilities) whose cost is expressed in foreign currency, including those on the currency accounts in banks which is performed in connection with a change in the official exchange rate of the foreign currency to the rouble of the Russian Federation fixed by the Central Bank of the Russian Federation;

For the purposes of this Chapter positive difference of exchange rates shall mean the difference of exchange rates arising in the event of revaluation of property in the form of currency values and claims shown in foreign currency, or in the event of marking down liabilities shown in foreign currency;

11.1) in the form of the sum difference a taxpayer has, when the sum of arising claims and liabilities calculated on the basis of the exchange rate of conventional monetary units, established by agreement of the parties on the date of sale (posting) of goods (works, services) and property rights, does not comply with the actually received (paid) amount in roubles;

12) in the form of fixed assets and intangible assets received free of charge in compliance with international treaties of the Russian Federation or with the laws of the Russian Federation by nuclear power plants for enhancing their safety, which are not used for production purposes;

13) in the form of the cost of received materials or other property during their pulling down or dismantling, when fixed assets are put out of operation in cases of their liquidation (with the exception of the cases envisaged by Subitem 19 of Item 1 of Article 251 of the present Code);

14) in the form of the property (monetary funds included), works and services, utilised other than in accordance with their intention, which were received in the framework of charitable activity (including charitable assistance and donations), of purpose-oriented receipts and purpose-oriented financing, with the exception of budgetary funds. With respect to the budgetary funds used other than for the target purposes, the norms of the budgetary legislation of the Russian Federation shall be applied.

The taxpayers who have received property (monetary funds included), works or services in the framework of charitable activity, or purpose-oriented incomings, or purpose-oriented financing, shall submit to the tax bodies at the place of their recording, after the end of the tax period, a report on the purpose-oriented utilisation of the received funds, which shall be compiled in accordance with the form approved by the Ministry of Taxation of the Russian Federation.

15) in the form of received purposive funds intended for the formation of reserves for development and ensuring the functioning and safety of nuclear power plants, or in the form of monetary assets received by nuclear power plants from said reserves, which have been used for other than the intended purposes;

16) in the form of the sums by which the authorised (summed up) capital (fund) of the organisation was reduced over the accounting (tax) period, if such reduction was effected with a simultaneous refusal of return of the cost of the corresponding part of the contributions (deposits) to the organisation's shareholders (partners) (with the exception of the cases envisaged by Subitem 18 of Item 1 of Article 251 of the present Code);

17) in the form of the return from a non-profit organisation of the earlier made contributions (deposits), if such contributions (deposits) were earlier recorded in the composition of the outlays on the creation of the tax base;

18) in the form of the sums of credit indebtedness (of a liability to the creditors), which is written off in connection with an expiry of the term of legal limitation or on the other grounds, with the exception of the cases envisaged by Subitem 22 of Item 1 of Article 251 of the present Code;

19) in the form of the incomes derived from transactions with the financial instruments of futures deals, taking into account the provisions of Articles 301-305 of this Code;

20) in the form of the cost of the surpluses of the commodity material values and other property, exposed as a result of making an inventory;

21) in the form of the cost of mass media products and books subject to exchange in the event of return or writing off of such products for the reasons provided for by Subitems 43 and 44 of Item 1 of Article 264 of this Code.