Article 278. Specifics in Defining the Tax Base for Incomes Received by Participants in a Contract of Simple Partnership

1. For the purposes of this Chapter, the taxpayer's handing over of the property, including of the rights of property, by way of contributions of the participants in simple partnerships (hereinafter 'the partnership') shall not be recognised as the sale of commodities (works, services).

2. If any of the participants in the partnership is a Russian organisation or natural person who is a tax resident of the Russian Federation, the incomes and the outlays of such partnership shall be recorded by the Russian participant for the purposes of taxation regardless of the fact on whom the maintenance of the partnership's affairs is imposed in accordance with the agreement.

3. The participant in the partnership who is recording the incomes and outlays of this partnership for the purposes of taxation shall be obliged to define in accordance with the progressive total by the results of every reporting (tax) period the income of every participant in the partnership proportionately to the share of the corresponding participant of the partnership, established by the agreements, in the income of the partnership derived over the reporting (tax) period from the activity of all the participants in the framework of the partnership. On the sums of the due (distributed) incomes, the participant in the partnership recording the incomes and outlays shall be obliged every quarter, before the 15th day of the month next to the reporting (tax) period, to inform every participant of the partnership of the sums of incomes due (distributed) to every participant in the partnership.

4. The incomes received from participation in a partnership shall be included in the composition of the extra-sale incomes of tax paying participants in the partnership, and shall be subject to taxation in the order established by the present Chapter. The losses of the partnership shall not be distributed among its participants and shall not be taken into account by them in taxation.

5. If the agreement of a simple partnership ceases to operate, its participants, when distributing the income from the partnership's activity, shall not correct the incomes they have earlier recorded in the taxation against the incomes they have actually derived when the income from the partnership's activity was distributed.

6. If the agreement of a simple partnership ceases to operate and the property is returned to the participants in this agreement, the negative difference between the evaluation of the returned property and the estimate in accordance with which this property was earlier handed over under the simple partnership agreement, shall not be recognised as a loss for the purposes of taxation.

Article 279. Specifics in Defining the Tax Base in Cases of Cession (Transfer) of the Right of Claim

1. If the tax paying seller of the commodity (works, services) who calculates the incomes (outlays) using the method of calculation cedes the right of claim for a debt to a third person before the term of payment fixed in the agreement on the realisation of commodities (works, services) sets in, the negative difference between the income from the realisation of the right of claim for the debt and the cost of the realised commodity (works, services) shall be recognised as the tax payer's loss. In this case, the amount of the loss shall not exceed for the purposes of taxation the sum of interest which the taxpayer would have paid, taking into account the demands of Article 269 of the present Code on the debt liability, equal to the income from the cession of the right of claim, over the period from the date of cession to the date of payment provided for by a contract of sale of goods (works, services). The provisions of this Item shall likewise apply to a taxpaying creditor for passive debts.

2. If the tax paying seller of commodities (works, services) calculating the incomes (the outlays) by the method of calculation cedes the right of claim for debt to a third person after the term of payment fixed by the agreement on the sale of commodities (works, services) sets in, the negative difference between the income from the sale of the right of claim for the debt and the cost of the sold commodity (works, services) shall be recognised as a loss under the deal on the cession of the right of claim which shall be included in the composition of the tax payer's extra-sale outlays. The loss shall in this case be accepted for the purposes of taxation in the following way:

- 50 per cent of the sum of the loss shall be included in the composition of the extra-sale outlays as on the date of cession of the right of claim;

- 50 per cent of the sum of the loss shall be included in the composition of the extra-sale outlays after 45 days from the day of cession of the right of claim.

The provisions of this Item shall likewise apply to a taxpaying creditor for passive debts.

3. If a taxpayer who has bought the right of claim for the debt subsequently realises the right of claim, the said transaction shall be considered as sale of financial services. The income (earnings) derived from the sale of financial services shall be defined as the cost of the property due to this taxpayer when he subsequently cedes the right of claim or when the corresponding liability ends. In this case, when defining the tax base, the taxpayer shall have the right to reduce the income he has derived from the sale of the right of claim by the sum of the outlays made on the acquisition of the said right of claim for the debt.

Article 280. Specifics in Defining the Tax Base on Transactions with Securities

1. The procedure for referring the objects of civil rights to securities shall be established by the civil legislation of the Russian Federation and by the applicable legislation of foreign states.

The procedure for referring securities to emission ones shall be established by the national legislation.

If transactions with securities can also be qualified as a transaction with the financial instruments of futures deals, the tax payer shall on his own choose the procedure for the taxation of such transaction.

2. The taxpayer's incomes from transactions involved in the sale or in some other form of the withdrawal of securities (redemption included) shall be defined proceeding from the sale price or of the other form of withdrawal of a security, as well as from the sum of the accumulated (coupon) income, paid by the purchaser to the taxpayer, and from the sum of the interest (coupon) income paid out to the taxpayer by the issuer (by the bill giver). In this case, into the taxpayer's income from the sale or from another form of the withdrawal of securities shall not be included the sums of interest (coupon) income earlier recorded in the taxation.

In the event of withdrawal (sale, repayment or exchange) of an investment share of a unit fund which does not circulate on the organized market, the estimated cost of the investment share determined in the procedure established by the laws of the Russian Federation on investment funds shall be recognized as the market price thereof.

The outlays made on the sale (or on another form of the withdrawal) of securities, including investment shares of a unit fund, shall be defined proceeding from the price of acquisition of the security (including the outlays on the acquisition thereof), from the expenditures on the sale thereof , from the amount of discounts on the estimated cost of investment shares and from the sums of the accumulated interest (coupon) income paid up by the taxpayer to the seller of the security. In this case, into the outlays shall not be included the sums of the accumulated interest (coupon) income earlier recorded in taxation.

3. For the purposes of this Chapter, securities shall be recognised as circulated on the organised securities market only if the following conditions are simultaneously observed:

1) if they are admitted into circulation by any one of the trade organisers who has the right to do so in accordance with national legislation;

2) if information on their prices (quotations) is published in the mass media (including electronic), or if it may be supplied by the trade organiser or by another authorised person to any interested person in the course of three years after the date of the performance of transactions with the securities;

3) if the market quotation is calculated by them, when this is envisaged by the corresponding national legislation.

4. Seen as the market quotation of a security for the purposes of this Chapter is the average weighted price of the security in deals made in the course of a trading day through the trade organiser. If the deals with one and the same security were made through two or more trade organisers, the taxpayer shall have the right to choose the market quotation formed by one of the trade organisers, on his own. If the trade organiser does not calculate the average weighted price the average weighted price accepted for the purposes of this Chapter shall be half of the sum of the maximum and minimum price of the deals performed in the course of the trading day through this trade organiser.

Seen as interest (coupon) income shall be the part of the interest (coupon) income the payment of which is envisaged by the terms of the issue of such security, calculated in proportion to the number of days which have passed from the date of issue of the security or from the date of payment of the previous coupon income to the day of making the deal (to the date of handing over the security).

5. The market price of securities for the purposes of taxation circulated on the organised securities market shall be recognised the actual price of sale or of another form of the withdrawal of securities, if this price lies in the interval between the minimum and the maximum price of the deals (price interval) with the said security, registered by the trade organizer on the securities market as on the date of carrying out the corresponding deal.

If deals with one and the same security have been carried out on the said date through two or more trade organisers on the securities market, the taxpayer shall have the right to choose on his own the trade organiser, the values of whose price interval will be used by the tax payer for the purposes of taxation.

If on the date of performing the deal there is no information on the trade organisers' price intervals, the taxpayer shall accept the price interval in the sale of these securities in accordance with the data supplied by the trade organisers on the securities market for the date of the closest auction which has taken place before the day of carrying out the corresponding deal, even if the auction on these securities was held by the trade organiser only once in the course of the last twelve months. If the trade organiser observes the above procedure, the actual price of the sale or of another form of the withdrawal of the securities in the corresponding price interval shall be accepted for the purposes of taxation as the market price.

In the event of sale of securities circulating on the organized securities market at the price lower that the minimum price of deals on the organized securities market the minimum price of the deal shall be taken for determining the financial result.

6. As concerns securities which are not circulated on the organised securities market, for the purposes of taxation shall be accepted the actual price of their sale or of another form of the withdrawal of the given securities if any of the following conditions are fulfilled:

1) if the actual price of the corresponding deal lies in the price interval of a similar (identical, homogeneous) security, registered by the trade organiser on the securities market as on the date of making the deal or as on the date of the closest auction which has taken place before the performance of the corresponding deal, if an auction on these securities was held by the trade organiser even once in the course of the last twelve months;

2) if the deviation of the actual price of the corresponding deal is within the limit of 20 per cent towards a rise or fall from the average weighted price of a similar (identical, homogeneous) security calculated by the trade organiser on the securities market in conformity with the rules he has established by the results of the auction as on the date of making such deal or as on the date of the closest auction which has taken place before the day of making the corresponding deal, even if an auction on these securities was held by the trade organiser only once in the course of the past twelve months.

If there is no information on the results of an auction on similar (identical, homogeneous) securities, the actual price of the deal shall be accepted for the purposes of taxation, if the said price differs by no more than 20 per cent from the settlement price of this security, which may be defined as on the date of making a deal with the security, with account taken of the concrete terms of the performed deal, for the specifics of its circulation and for the price of the security, as well as for the other indices, information on which may serve as grounds for such calculation. In particular, to define the settlement price of a share, the cost of the net issuer's assets falling on the corresponding share may be used, and to define the settlement price of a debt security - the market value of the loan interest rate for the corresponding time term in the corresponding currency.

7. The tax paying share holder selling the shares he has received when the authorised capital of the joint-stock company was augmented, shall define the income as the difference between the sale price and the originally remunerated cost of the share, corrected with account taken of the change in the number of shares as a result of the increase of authorised capital.

8. The tax base on transactions with securities shall be defined by the taxpayer separately, with the exception of the tax base on the transactions with securities, which shall be defined by professional securities market traders. Taxpayers (with the exception of professional market traders carrying out dealer's activity) shall define the tax base on transactions with the securities circulated on the organised securities market, apart from the tax base on transactions with securities which are not circulated on the organised securities market.

Professional participants of the securities market (including banks) which are not engaged in dealer's activities, for the purposes of taxation shall determine in their accounting police a procedure for forming the tax base with regard to transactions in the securities circulating on the organized securities market and the tax base with regard to transactions in the securities not circulating on the organized securities market.

With this, a taxpayer shall independently choose the types of securities (both those circulating on the organized securities market and those not circulating on the securities market) in respect of which other receipts and expenditures related to operation in them, which are determined in compliance with this Chapter, shall be included in the composition of receipts and expenditures while forming the tax base.

9. In the event of sale or any other withdrawal of securities, a taxpayer shall independently choose one of the following methods of writing off as outlays the cost of withdrawn securities in compliance with the accounting policy accepted for the purposes of taxation:

1) in accordance with the prime cost of the acquisitions (FIFO);

2) in accordance with the last cost of the acquisitions (LIFO);

3) in accordance with the cost of one unit.

10. Taxpayers who have incurred a loss (losses) from transactions in securities in the previous tax period or in the previous tax periods shall have the right to reduce the tax base received on the transactions in securities in the reporting (tax) period (to put off the said losses onto the future), in the order and on the terms established by Article 283 of the present Code.

With this, losses from transactions in the securities not circulating on the organized securities market which were incurred in the previous tax period (previous tax periods) may be referred to the decrease of the tax base caused by transactions in such securities which is determined in the reporting (tax) period.

With this, losses from transactions in the securities circulating on the organized securities market incurred in the previous tax period (previous tax periods) may be referred to the decrease of the tax base caused by transactions in the sale of the given category of securities.

During a tax period the transfer for the future of the losses incurred in a appropriate reporting period as a result of transactions in the securities circulating on the organized securities market and in the securities not circulating on the organized securities market shall be effected separately for said categories of securities within the limits of the incomes gained from transactions in such securities accordingly.

The incomes derived from transactions in the securities circulated on the organised securities market cannot be reduced by the outlays or the losses from transactions in the securities not circulated on the organised securities market.

The incomes derived from transactions in the securities not circulated on the organised securities market cannot be reduced by the outlays or the losses from transactions in the securities circulated on the organised securities market.

The provisions of the Paragraphs from Two to Six of the present Item shall not be spread to the professional securities market traders engaged in dealer's activity.

11. The taxpayers (including banks) engaged in the dealer's activities on the securities market, when determining the tax base and transferring losses for the future in the procedure and on the conditions established by Article 283 of this Code, shall form the tax base and shall determine the amount of the losses to be transferred for the future with the account taken of all incomes (outlays) and the sums of losses resulting from business activities.

During the tax period the carry-forward of damages incurred by the aforesaid taxpayers in a specific accounting period of the current tax period may be effected within the limits of the profit amount resulting from the pursuance of entrepreneurial activity.