Article 264. Other Outlays Involved in the Production and (or) Sale

1. To the other outlays involved in the production and (or) in the sale, are referred the following taxpayer's outlays:

1) the sums of the taxes and fees calculated in the order established by the legislation of the Russian Federation on taxes and fees, with the exception of those listed in Article 270 of the present Code;

2) the outlays on the certification of the products and services;

3) the sums of the commission fees and other similar expenditures on the works (services), performed (rendered) by outside organisations;

4) the sums of the port and airfield dues, the outlays on the pilot's services and other similar expenses and the other similar payments;

5) the sums of paid out travelling allowances within the limit of the norms established in conformity with the legislation of the Russian Federation;

6) outlays on ensuring fire safety of a taxpayer in compliance with the laws of the Russian Federation, outlays on the maintenance of a gas rescue team, outlays on the services rendered for the protection of property, on the fire prevention services, outlays on the acquisition and of the other services of guarding activity, as well as outlays on the maintenance of the internal security service for fulfilling the functions of economic protection of the banking and economic operations, and for the protection of material values (with the exception of the outlays on the equipment and on the acquisition of weapons and other special means of defence);

7) outlays on ensuring normal labour conditions and accident prevention measures provided for by the laws of the Russian Federation, outlays on civil defence in compliance with the laws of the Russian Federation, as well as outlays on medical treatment of occupational diseases of workers engaged in jobs with harmful or dangerous working conditions, outlays connected the maintenance of premises and equipment of health units situated directly on the territory of the organization;

8) the outlays on hiring workers, including the outlays on the services of specialized organizations profiled on an engagement of the personnel;

9) the outlays on rendering services involved in the guarantee repairs and servicing, including deductions into the reserve against the forthcoming outlays on the guarantee repairs and guarantee servicing (with account of the provisions of Article 267 of the present Code);

10) the rentals (leasing payments) for rented (leased) property. If the property received under a contract of leasing is recorded by the lease holder, the rentals (leasing payments) shall be recognised as outlays minus the sums of depreciation charges calculated for this property in conformity with Article 259 of the present Code;

11) outlays on the maintenance of the company's transport facilities (motor, railway, air and other types of transport). The outlays on compensation for the use of personal passenger cars and motorbikes for making official trips within the limit of the norms established by the Government of the Russian Federation;

12) outlays on business trips, in particular, on:

- workers' fares to the place of destination of the business trip and back to the place of his permanent work;

- the hire of living premises. In this item of the outlays, subject to compensation shall also be the worker's expenses incurred in the remuneration of additional services rendered in hotels (with the exception of the fees for services rendered in bars and restaurants, in hotel rooms and payments for the use of recreational and health facilities);

- the daily or field allowances within the limit of the norms approved by the Government of the Russian Federation;

- the formalisation and issue of visas, passports, vouchers, invitations and other similar documents;

- the consular and airfield dues, fees for the right of the entry, passage and transit of motor and the other transportation facilities, for the use of sea channels and of other similar installations, and other similar payments and fees;

12.1) outlays on the delivery from the place of residence (gathering) to the place of work and back of workers employed by the organizations exercising their activities by shifts or in the field (in expeditions). Said outlays shall be provided for by collective agreements;

13) outlays on providing food allowances for sea crews, river and air vessels within the limit of the norms approved by the Government of the Russian Federation;

14) outlays on legal and informational services;

15) outlays on consulting and other such services;

16) payment to the state and (or) private notaries for notarial formalisation. This kind of outlay shall be accepted within the limit of the tariffs approved in the established order;

17) outlays on auditor services;

18) outlays on the management of the organization or of its individual subdivisions, as well as outlays on the acquisition of services related to management of organizations or individual subdivisions thereof;

19) outlays on the services involved in sending over workers (technical and managerial personnel) by outside organisations for them to take part in the production process, in the management of the production or in the fulfilment of other functions involved in the production and (or) sale;

20) outlays on the publication of business accounting reports, as well as on publishing and on the other ways of revealing other kinds of information, if the legislation of the Russian Federation has imposed upon the taxpayer the duty to actualise such publication (revealing);

21) outlays involved in the presentation of the forms and of information of the state statistical observation, if the legislation of the Russian Federation has imposed upon the taxpayer the duty to present such information;

22) representation outlays connected with holding official reception and with the servicing of representatives from other organisations taking part in negotiations aimed at establishing and maintaining cooperation, in accordance with the procedure stipulated by Item 2 of the present Article;

23) outlays on the training and retraining of personnel on the taxpayer's staff on a contractual basis in accordance with the procedure stipulated by Item 3 of the present Article;

24) outlays on stationery;

25) outlays on postal, telephone, telegraph and other similar services, outlays on the remuneration of communication services and on services rendered by computer centres and banks, including those on the services of fax and satellite communication, of e-mail and of informational systems (SWIFT, Internet and other similar systems);

26) outlays connected with the acquisition of the right to the use of computer software and of data bases under the contracts with the right holder (under licence agreements). To the said outlays shall also be referred outlays on acquisition of exclusive rights to the software at the cost of less than 10 000 roubles and those made on the renewal of computer software and of data bases;

27) the outlays on the current study (research) of the market situation, on the collection of information directly involved in the production and sale of commodities (works, services);

28) the outlays on the advertising of the put out (acquired) and (or) of the sold commodities (works, services), of the activities of the taxpayer, of trade marks and service marks, including participation in exhibitions and in the fairs, taking into account the provisions of Item 4 of the present Article;

29) the contributions, deposits and other obligatory dues paid to non-profit organisations, if the payment of such contributions, deposits and other obligatory dues is a condition for the performance of their activity by the taxpayers who are payers of such contributions, deposits or other obligatory dues;

30) contributions to international organisations, if the payment of such contributions is an obligatory condition for the performance of their activity by the taxpayers who are payers of such contributions, or if it is a condition for the international organisation's rendering the services necessary for the performance of the said activity by the tax payer who is a payer of such contributions;

31) the outlays involved in the remuneration of services to the outside organisations for the maintenance and sale, in accordance with the procedure established by the legislation of the Russian Federation, of the objects of pledge and pawn over the time when the said objects are kept by the pawn holder after they are handed over to him by the pawn giver;

32) outlays on the maintenance of settlements for shifts of workers and temporary settlements, including all objects of housing-communal and socio-cultural purpose, of truck farms and other similar services, in the organizations exercising their activities by shifts or in the field (in expeditions). Said expenses for the purposes of taxation shall be recognized within the limits of the normative standards for maintenance of similar objects and services endorsed by bodies of local self-government at the place of the taxpayer's activities. Where such normative standards are not endorsed by bodies of local self-government, the taxpayer shall be entitled to apply the procedure for determining outlays on the maintenance of these objects effective with regard to similar objects situated on the given territory and subordinate to said bodies;

33) the deductions of the enterprises and organizations running especially dangerous radioactive and nuclear works and objects for forming the reserves for guaranteeing the security of the said works and objects at all stages of their life cycle and development in conformity with the legislation of the Russian Federation on the use of nuclear power and in accordance with the procedure established by the Government of the Russian Federation;

34) the outlays on the preparation and development of new production, workshops and aggregates;

35) the outlays of non-capital character connected with the improvement of technology, as well as of the organisation of production and management;

36) the outlays on services involved in keeping business accounting, rendered by outside organisations or the individual businessmen;

37) periodical (current) payments for the use of the rights to the results of intellectual activity and of the means of individualisation (in particular, of rights arising from the patents on the inventions, industrial samples and other forms of intellectual property);

38) the outlays effected by tax paying organisations making use of the labour of invalids in the form of funds directed towards the goals ensuring the social protection of invalids, if the invalids comprise no less than 50 per cent of the total number of such taxpayer's workforce and the share of the outlays on the remuneration of invalids' labour in the outlays on remuneration of labour is not less than 25 per cent.

Recognized as goals ensuring the social protection of invalids shall be the improvement of labour conditions for invalids, creation of new jobs for invalids (including the acquisition and installation of equipment for, and the organization of the labour of, home-workers), training (including training in new professions and labour skills) and job placement of invalids, protection of the invalids' rights and lawful interests, measures for their rehabilitation (including acquisition and servicing of rehabilitation means, of guide-dogs, of authorizations to places in sanatoriums and health resorts) and providing for invalids equal opportunities (including transport servicing of invalids and arranging relaxation of disabled children) with other citizens in conformity with the legislation of the Russian Federation on the social protection of invalids, including making contributions for the maintenance of public organizations of invalids;

When determining the total number of invalids, into the average-listed number of workers shall not be included invalids combining jobs, working on turn-key contracts and other contracts of civil-legal nature;

39) the outlays of tax paying invalids' public organisations, and of tax-paying institutions, the only owners of whose property are the public organisations of invalids in the form of the funds oriented towards the performance of the activity of the said public organisations of invalids and towards the goals pointed out in Item 38 of the present Item.

After the expiry of the tax period, the receivers of the funds intended for the exercise of activities of a public organization of invalids and for the purposes of the social protection of invalids shall submit to the corresponding tax bodies at the place of their recording a report on the purpose-oriented use of the received funds.

If these funds have not been used, from the moment when the receiver has actually used such funds, not for the purpose (violated the terms for granting these funds), such funds shall be recognised as income of the tax-payer who has received these funds.

The outlays mentioned in Subitem 38 of the present Item and in the present Subitem cannot be included in the outlays connected with the production and (or) the sale of excisable commodities, mineral raw materials, other commercial minerals and other commodities in accordance with the list compiled by the Government of the Russian Federation in agreement with the all-Russia organizations of invalids, as well as with rendering intermediary services connected with the sale of such commodities, mineral raw materials and minerals;

39.1) outlays of taxpaying organizations whose authorized (pooled) capital is completely made up of the contribution of religious organizations in the form of receipts from the sale of religious literature and articles of religious purpose, provided that these amounts are transferred for the exercise of the authorized activities of said religious organizations;

40) payments for the registration of the rights to immovable property and to land, of the deals in the said objects, payments for the supply of information on the registered rights and the remuneration of the services of the authorised bodies and specialised organisations involved in the assessment of property and in compiling documents of cadastre and technical recording (inventory) of the objects of immovable property;

41) outlays under the contracts of civil-legal nature (including turn-key contracts) concluded with individual businessmen not on an organisation's staff;

42) the outlays of the agricultural organisation taxpayers on providing food for the workers engaged in agricultural works;

43) outlays on the replacement of copies of periodical printed matter in which defects have been exposed or which have lost their marketable appearance in the course of transportation and (or) sale, and which have proved to have missing parts, but not over seven per cent of the cost of the edition of the corresponding issue of the periodical printed publication;

44) losses in the form of the cost of mass media products and books which have defects or have lost their marketable appearance, or which have not been sold within the time term indicated in the present Subitem (morally outdated), and which are written off by the taxpayer engaged in the manufacture and issue of the mass media products and books, within the limit of ten per cent of the cost of the edition of the corresponding issue of the periodical publication or of the corresponding edition of books, as well as the outlays on writing off and utilisation of mass media products and books in which defects have been exposed or which have lost their marketable appearance or which have not been sold.

Recognised as outlays shall be the cost of mass media products and books which have not been sold to the following deadlines:

- as concerns the printed periodical publications before the output of the next issue of the corresponding periodical;

- as concerns books and other non-periodical printed matter - within 24 months after their issue;

- as concerns calendars (regardless of their form) before April 1 of the year to which they refer;

45) the contributions on the obligatory social insurance against accidents in production and against occupational diseases, made in conformity with the legislation of the Russian Federation;

46) the taxpayer's deductions made to provide for the supervisory activity of the specialised institutions for the purposes of exerting control over the observation by such taxpayers of the corresponding demands and terms, stipulated by the legislation of the Russian Federation, and the taxpayers' deductions into reserves created in conformity with the legislation of the Russian Federation regulating activities in the sphere of communications;

47) losses caused by spoilage;

48) outlays connected with maintenance of public catering units for servicing labour collectives (including amounts of accrued depreciation, outlays on repairing premises, outlays on lighting, heating, water and power supply, as well as on fuel for cooking);

49) the other outlays involved in the production and (or) sale.

2. To the representation outlays shall be referred the taxpayers' outlays on official receptions and (or) on servicing the representatives of other organisations, taking part in negotiations aimed at establishing and (or) at maintaining mutual cooperation, as well as the participants who have arrived to attend the meetings of the taxpayer's board of directors (of the board) or of the other management body, regardless of the place of holding such events. To the representation outlays shall be referred those made on holding official receptions (lunches, dinners or other similar events) arranged for the said persons, as well as for the officials of a taxpaying organization participating in the talks, on providing transport facilities to take these persons to the place of holding representation events and (or) meetings of the management body and back, on snack bar servicing during negotiations, and on the remuneration of the services of interpreters who are not on the tax payer's staff, to provide for translation during the representation events.

To the representation outlays shall not be referred those made on organising entertainment and recreation, prophylactic activity or the treatment of diseases.

The representation outlays shall be included in the course of the reporting (tax) period in the composition of the other outlays in an amount not exceeding four per cent of the taxpayer's outlays on the remuneration of labour over this reporting (tax) period.

3. To the taxpayer's outlays on personnel training and retraining carried out on the grounds of contracts with educational establishments shall be referred outlays involved in the training and retraining (including in raising the qualifications of personnel) in conformity with the contracts signed with these establishments.

The said outlays shall be included in the composition of the other outlays, if:

1) the corresponding services are rendered by Russian educational establishments which have received state accreditation (possess the corresponding licence), or by foreign educational establishments with the corresponding status;

2) training (retraining) is provided to the workers on the tax payer's staff and in the operating organisations responsible for maintaining the qualifications of workers employed at nuclear power plants - to the workers of these plants, in conformity with the legislation of the Russian Federation;

3) the programme for training (retraining) helps in raising qualifications and encourages a more efficient use of the trained or the retrained specialist in this organisation in the framework of the tax payer's activity.

Not recognised as outlays on personnel training and retraining shall be the outlays involved in organising entertainment, recreation or medical treatment, or outlays connected with the maintenance of educational establishments or with rendering them gratuitous services, with the payment for the workers' studies at higher and secondary special educational establishments for them to receive a higher or secondary special education. The said outlays shall not be accepted for the purposes of taxation.

4. For the purposes of the present Chapter, to the organisation's outlays on advertising shall be referred:

- the outlays on advertising effected through the mass media (including announcements in the press and in radio and television programmes) and the telecommunication networks;

- outlays on lit and other outdoor advertising, including the manufacture of advertisement stands and panels;

- outlays on taking part in exhibitions, fairs and displays, on the decoration of showcases, of sales exhibitions, rooms for the exposition of samples and demonstration halls, on the production of advertising booklets and catalogues containing information on the works and services carried out and rendered by an organization, or on an organization proper, and on the price discounts concerning the commodities which have fully or partially lost their original properties because of being put on display.

The taxpayer's outlays on the acquisition (the manufacture) of the prizes given out to the winners during the large scale advertising campaigns, as well as the taxpayer's outlays on other types of advertising not indicated in Paragraphs from Two to Four of this Item, which are carried out by him with a report (tax) period for the purposes of taxation shall be recognized in the amount not exceeding one per cent of the proceeds from sale to be defined in conformity with Article 249 of the present Code.