Article 262. Outlays on Scientific Studies and (or) on Research and Development Works

1. Recognised as outlays on scientific studies and (or) on research and development works shall be outlays involved in the creation of new or in the improvement of already put out products (commodities, services), in particular, outlays on inventions, as well as outlays on forming the Russian Fund of Technological Development and other branch and inter-branch funds of financing scientific studies and research and development works according to the list endorsed by the Government of the Russian Federation in compliance with the Federal Law on Science and State Scientific Research Policy.

2. A taxpayer's outlays on scientific studies and (or) research and development works relating to the development of new products (goods, works and services) or to the improvement of those being put out, especially the outlays on inventions borne by him independently or jointly with other organizations (in the amount corresponding to his share of expenditure), as well as under the contracts in which he acts as a customer with regard to such studies or works, shall be recognized for the purposes of taxation upon the completion of these scientific studies or research and development works (upon completion of individual stages of works) and signing by the parties of an acceptance certificate in the procedure provided for by this Article.

The taxpayer shall evenly include the said outlays in the composition of the other outlays in the course of five years, under the condition that these studies and works are used in the production and (or) sale of commodities (in the performance of works or in rendering services) as from the first day of the month next to the month in which these studies (individual stages of research) were completed.

The taxpayer's outlays on scientific studies and (or) on research and development works, aimed at the creation of new or at an improvement of already applied technologies, or at the creation of new kinds of raw and other materials, which have not produced any positive result, shall also be included in the composition of other outlays evenly in the course of three years in an amount not exceeding 70 per cent of the actually incurred expenses, in accordance with the order envisaged by the present Item.

3. The outlays of a taxpayer on scientific studies and (or) research and development works in the form of allocations to the formation of the Russian Fund of Technological Development and of other branch and inter-branch funds of financing scientific studies and research and development works according to the list endorsed by the Government of the Russian Federation in compliance with the Federal law on Science and State Scientific Research Policy shall be recognized for the purposes of taxation within the limits of 0,5 per cent of incomes (gross receipt) of the taxpayer.

4. The provisions of Item 2 of the present Article shall not extend to outlays on scientific studies or on the research and development works carried out in organisations which are engaged in scientific studies and (or) in research and development works in the capacity of performer (of the contractor or of the subcontractor). The said outlays shall be considered as made on the performance by these organisations of an activity aimed at deriving incomes.

5. Where as a result of expenses incurred in connection with scientific studies and (or) research and development works a taxpaying organization gains the exclusive rights to the results of the intellectual activities indicated in Item 3 of Article 257 of this Code, these rights shall be recognized as the intangible assets subject to depreciation in compliance with Item 2 of Article 258 of this Code.

Article 263. Outlays on the Obligatory and Voluntary Insurance of Property

1. The outlays on the obligatory and voluntary insurance of property embrace the insurance fees for all kinds of the obligatory insurance and for the following kinds of the voluntary insurance of property:

1) voluntary insurance of the transportation facilities (of water, air, ground and pipeline transport), including those rented, the outlays on whose maintenance are included in the outlays involved in production and sale;

2) voluntary insurance of freight;

3) voluntary insurance of the production-profiled fixed assets (including those rented), of non-material assets and of the objects of the capital construction in progress (including those rented);

4) voluntary insurance against the risks involved in the performance of the construction and mounting works;

5) voluntary insurance of the commodity-material stocks;

6) voluntary insurance of the harvest of agricultural cultures and the livestock;

7) voluntary insurance of other property which the taxpayer uses in carrying out an activity aimed at deriving an income;

8) voluntary insurance of responsibility for inflicting harm, if such insurance is a condition for the performance by the taxpayer of activity in conformity with the international liabilities of the Russian Federation or with the generally accepted international demands.

2. The outlays on the obligatory kinds of insurance (those established by the legislation of the Russian Federation) shall be included in the composition of the other outlays within the limit of the insurance tariffs in conformity with the legislation of the Russian Federation and with the demands of the international conventions. If the given tariffs are not approved, the outlays on the obligatory insurance shall be included in the composition of the other outlays in the amount of the actual expenditures.

3. The outlays on the voluntary types of insurance indicated in this Article shall be included into the composition of the other outlays in the amount of the actual expenditures.