Article 281. Specifics in Defining the Tax Base for Transactions in State and Municipal Securities

When placing state securities of the Russian Federation, state securities of the subjects of the Russian Federation and municipal state securities (hereinafter referred to as state and municipal securities), the incomes declared (established) by the issuer in the form of the rate of interest on the nominal cost of said securities shall be recognized as interest yields , and as regards the securities in respect of which the rate of interest is established, the interest yields on them shall be the incomes in the form of the difference between the nominal cost of a security and the cost of its primary distribution calculated as the weighted average price, as on the date when an issue of the securities in compliance with the established procedure was recognized as distributed.

In the taxation of the deals involved in the sale or other form of the withdrawal of securities, the price of the issue and of the municipal securities shall be recorded without interest (coupon) income falling on the time of the taxpayer's possession of these securities, the payment of which is envisaged by the terms of the issue of such security.

The taxation of an interest calculated over the time when the state and municipal security was kept on the taxpayer's balance, shall be effected on the terms established by this Chapter. The earnings from the state and municipal securities included in the price of the deal in whose circulation is included a part of the accumulated coupon interest shall be reduced by the income in the amount of the accumulated coupon income due for the time of the taxpayer's possession of the said security.

Article 282. Specifics in Defining the Tax Base for REPO Deals in Securities

1. For the purposes of the present Code, interpreted as REPO deals shall be deals involved in the sale (purchase) of emission securities (the first part of REPO), with an obligatory subsequent reverse purchase (sale) of securities of the same issue in the same amount (the second part of REPO) in the time term defined by the agreement at the price fixed by this agreement when concluding the first part of such deal. For the purposes of the present Code, the time term for which REPO deals are concluded shall not exceed six months. The deal may be prolonged in this case for a term not exceeding the number of days from the date of the execution of the deal under the terms of its conclusion until the end of the reporting period.

2. A REPO transaction shall not change the price of the acquisition of securities or the amount of the accumulated interest (coupon) income as on the date of the first part of REPO for the purposes of the taxation of the incomes from their subsequent sale after the reverse purchase of the securities in the second part of REPO.

3. The incomes (losses) from the sale of securities in the first part of a REPO transaction shall not be recorded when defining the tax base. The tax base for the interest (coupon) incomes shall be defined in accordance with Items 4, 5 and 7 of the present Article. Taxation of the said incomes shall be effected according to the rates established by Article 284 of the present Code.

4. For the seller in the first part of REPO, the difference between the price of acquisition of the second part of REPO and the price of sale of the first part of REPO shall be recognised:

1) if such difference is positive - as the outlays on the payment out of an interest on the attracted funds which are included in the composition of the outlays with account taken of the provisions envisaged by Articles 265 and 269 of the present Code (for banks - by Article 291 of the present Code);

2) if such difference is negative - as the incomes in the form of an interest on the loan represented by the securities which are included into the composition of the outlays in conformity with Article 250 of the present Code.

5. For the purchaser in the first part of REPO, the difference between the price of sale in the second part of REPO and the price of acquisition in the first part of REPO shall be recognised:

1) if such difference is positive - as the incomes in the form of interest on the placed funds, which shall be included in the composition of incomes in conformity with Article 250 of the present Code (for banks - by Article 290 of the present Code);

2) if such difference is negative - as the outlays in the form of interest on the loan received in securities which shall be included in the composition of the outlays in the order laid down by Articles 265 and 269 of the present Code.

6. If on the date of execution of the second part of REPO the deal on the reverse purchase (sale) of securities is not performed or is performed not in full volume, the organisation selling the first part of REPO shall define the income (outlays) from the sale of securities in the part of the securities not redeemed in the second part of REPO, as on the date of execution of the first part of REPO, in the order and on the terms laid down by Article 280 of the present Code. The price of sale of the said securities shall in this case be accepted for taxation purposes with account taken of the provisions of Items 5 and 6 of Article 280 ason the date of sale of such securities.

The provisions of the Item at hand shall not be applied with respect to securities redeemed after the date of performance of the deal in conformity with the terms of its conclusion but within the framework of the reporting period.

7. When calculating the difference between the price of sale (acquisition) in the second part of REPO and the price of acquisition (sale) in the first part of REPO defined according to Items 4 and 5 of the present Article, the price of sale (acquisition) in the second part of REPO shall be calculated with account taken of the accumulated interest (coupon) income as on the date of the second part of REPO, increased by the sum of the coupon payment by the issuer (if such has taken place) and reduced by the sum of the accumulated interest (coupon) income as on the date of the first part of REPO.

8. For the purposes of the present Article, seen as the dates of the first and second parts of REPO shall be the respective dates of the actual transfer of the security. In this case the actual price of sale (the acquisition) of the security shall be applied, both in the first part of REPO and in the second part of REPO, regardless of the market cost of such securities as on the date of the transfer. The provisions of this Item shall not be applied with respect to the securities on which the second part of REPO is not executed (with account taken of the provisions of Item 6 of the present Article).

Article 283. Transfer of Losses to the Future

1. Taxpayers who have incurred a loss (losses) calculated in conformity with this Chapter in the previous tax period or in the previous tax periods shall have the right to reduce the tax base of the current tax period by the entire sum of the loss they have suffered, or by a part of this sum (to transfer the loss to the future). In this case, the tax base of the current tax period shall be defined taking into account the specifics envisaged by this Article, by Article 275.1 and by Articles 280 and 304 of the present Code.

2. Taxpayers shall have the right to transfer the loss to the future for the ten years following the tax period in which this loss was incurred.

Taxpayers shall have the right to transfer onto the current tax period the sum of the loss incurred in the previous tax period. The aggregate sum of the transferred loss shall not in this case exceed in any reporting (tax) period 30 per cent of the tax base calculated in conformity with Article 274 of the present Code.

The loss which has not been transferred to the closest next year may in a similar order be transferred, either wholly or in part, to the closest next year of the subsequent ten years, while taking into account the provisions of the second paragraph of this Item.

3. If the taxpayer has incurred losses in more than one tax period, such losses shall be transferred to the future in the order of priority in which they have been incurred.

4. Taxpayers shall be obliged to keep the documents confirming the volume of the incurred loss in the course of the entire term when he reduces the tax base of the current tax period by the sums of the earlier incurred losses.

5. If taxpayers stop their activity because of reorganisation, the tax paying legal successor shall have the right to reduce the tax base in the order and on the terms envisaged by this Article by the sum of the losses incurred by the organisations put under reorganisation, prior to the moment of reorganisation.

Article 284. Tax Rates

1. The tax rate shall be established (unless otherwise stipulated by Items 2-5 of this Article) in the amount of 24 per cent. In this case:

- the sum of the tax calculated by the tax rate in the amount of 7.5 per cent shall be entered into the federal budget;

- the sum of the tax calculated by the tax rate in the amount of 14.5 per cent shall be entered into the budgets of the subjects of the Russian Federation;

- the sum of tax calculated by the tax rate in the amount of 2 per cent shall be entered into the local budgets.

The subjects of the Russian Federation may legislatively reduce the tax rate provided for by this Item for individual categories of taxpayers insomuch as it concerns the sums of the tax entered to the budgets of the subjects of the Russian Federation. With this, said tax rate may not be less that 10,5 per cent.

2. The rates of tax on the incomes of foreign organisations not connected with activity in the Russian Federation through their permanent representation, shall be established in the following amounts:

1) 20 per cent - from any kind of incomes, except for those indicated in Subitem 2 of this Item and in Items 3 and 4 of this Article subject to the provisions of Article 310 of this Code;

2) 10 per cent - from the use, maintenance or letting out (freighting) of ships, aircraft and other mobile transportation facilities or containers (including trailers and auxiliary equipment necessary for transportation) in connection with the performance of international shipments.

3. Towards the tax base defined in accordance with the incomes derived in the form of dividends shall be applied the following rates:

1) 6 per cent - on incomes derived in the form of dividends from Russian organisations by Russian organisations and natural persons who are tax residents of the Russian Federation;

2) 15 per cent - on incomes derived in the form of dividends from Russian organisations by foreign organisations, as well as on incomes received in the form of dividends by Russian organisations from foreign organisations.

Tax shall be calculated in this case with account taken of the specifics described in Article 275 of the present Code.

4. To the tax base defined for transactions in the individual kinds of debt liabilities shall be applied the following tax rates:

1) 15 per cent - on income in the form of interest on state and municipal securities (except for the securities pointed out in Subitem 2 of the present Item), the terms of the issue and the circulation of which envisage the receipt of income in the form of interest;

2) zero per cent - on income in the form of interest on the state and municipal bonds floated before January 20, 1997 inclusive, as well as on income in the form of interest on bonds of the state currency bonds loan of 1999, issued when carrying out the novation of the internal state currency loan Series III, issued for the purposes of ensuring the conditions necessary for the regulation of the internal currency debt of the former Union of the Soviet Socialist Republics and of the internal and the external currency debt of the Russian Federation.

5. The profit derived by the Central Bank of the Russian Federation from the performance of an activity involved in its discharge of the functions stipulated by the Federal Law on the Central Bank of the Russian Federation (the Bank of Russia), shall be levied with tax at a tax rate of 0 (zero) per cent.

The profit derived by the Central Bank of the Russian Federation from the performance of an activity not involved in its discharge of the functions envisaged by the Federal Law on the Central Bank of the Russian Federation (the Bank of Russia), shall be levied with tax in accordance at the tax rate envisaged by Item 1 of this Article.

6. The sum of tax calculated in accordance with the tax rates established by Items 2-4 of this Article shall be entered into the federal budget.

Article 285. Tax Period and Reporting Period

1. Recognised as the tax period for tax shall be the calendar year.

2. Recognised as reporting periods for tax shall be the first quarter, the half-year and nine months of the calendar year.

As reporting periods for the taxpayers calculating monthly advance payments reasoning from actually gained profits shall be recognized as one month, two months, three months and so on up to the end of a calendar year.

Article 286. Procedure for the Calculation of Tax and Advance Payments

1. Tax shall be defined as the percentages part of the tax base corresponding to the tax rate, which shall be defined in conformity with Article 274 of the present Code.

2. Unless otherwise established by Items 4 and 5 of this Article, the taxpayer shall define the sum of tax by the results of the tax period on his own.

On the basis of the results of each reporting (tax) period, if not otherwise provided for by this Article, taxpayers shall calculate the sum of the advance payment reasoning from the tax rate and taxable profits calculated as a progressive total from the start of the tax period to the end of the reporting (tax) period. During a report period taxpayers shall calculate the sum of the monthly advance payment in the procedure established by this Article.

The sum of the monthly advance payment to be made in the first quarter of the current tax period shall be regarded as equal to the sum of the monthly advance payment to be paid by the taxpayer in the last quarter of the previous tax period. The sum of the monthly advance payment to be made in the second quarter of the current tax period shall be regarded as equal to one third of the sum of the advance payment calculated for the first reporting period of the current year. The sum of the monthly advance payment to be made in the third quarter of the current tax period shall be regarded as equal to one third of the difference between the sum of the advance payment calculated on the basis of the results of half a year and the sum of the advance payment calculated on the basis of the results of the first quarter.

The sum of the monthly advance payment to be made in the fourth quarter of the current tax period shall be regarded as equal to one third of the difference between the sum of the advance payment calculated on the basis of the results of nine months and the sum of the advance payment calculated on the basis of the results of half a year.

If the sum of a monthly advance payment calculated in such a way is negative or is equal to zero said payments in the appropriate quarter shall not be made.

The taxpayers shall have the right to switch to the calculation of monthly advance payments proceeding from the actually derived profit subject to the calculation. In this case, the sums of the advance payments shall be calculated by taxpayers proceeding from the tax rate and from the actually derived profit calculated by progressive total as from the start of the tax period and to the end of the corresponding month.

With this, the sum of the advance payments subject to entry into the budget shall be defined with account taken of the earlier calculated sums of advance payments. The taxpayer shall have the right to switch to making monthly advance payments, proceeding from the actual profit, having notified to this effect the tax body not later than December 31 of the year preceding the tax period in which the transfer to this system of making advance payments is taking place. The system for making advance payments cannot be changed by the taxpayer in the course of the tax period.

3. Organisations whose incomes from sales defined in compliance with Article 249 of this Code have not exceeded on average three million roubles in every quarter over the preceding four quarters, as well as budgetary institutions, foreign organisations carrying out activity in the Russian Federation through their permanent representation, non-profit organisations deriving no income from the sale of commodities (works, services), the participants in simple partnerships with respect to the incomes they derive from taking part in simple partnerships, the investors in production sharing agreements in the part of incomes derived from the implementation of the said agreements and beneficiaries on the trust management agreements, shall make only quarterly advance payments by the results of the reporting period.

4. If the taxpayer is a foreign organisation deriving incomes from sources in the Russian Federation not connected with permanent representation in the Russian Federation, the duty to define the sum of the tax, to withhold this sum from the taxpayer's income and to transfer the tax to the budget shall be imposed upon Russian organisations or upon foreign organisations performing an activity in the Russian Federation through permanent representation (upon tax agents), which (who) shall pay out the said income to the taxpayer.

The tax agent shall define the sum of tax for every payment (transfer) of the monetary funds or for other receipt of the income.

5. Russian organisations paying out incomes to taxpayers in the form of dividends, as well as in the form of interest on state or municipal securities, subject to taxation in conformity with this Chapter, shall define the sum of tax separately for every one of such tax payers as applied to every payment of the said incomes:

1) if the source of the taxpayer's incomes is a Russian organisation, the duty to withhold the tax from the taxpayer's incomes and to transfer it to the budget shall be imposed upon this source of incomes.

In this case, the tax in the form of advance payments shall be withheld from the taxpayer's incomes in every payment of such income;

2) when selling the state and municipal securities whose circulation provides for the recognition as the income, gained by the seller in the form of interest, the sums of accumulated interest yields (accumulated coupon yields), the taxpaying recipient of the yields shall independently calculate and pay the tax on such yields.

Information on the kinds of securities to which the procedure established by the present Item is applied shall be brought to the taxpayers' attention by the federal executive power body authorised by the Government of the Russian Federation.

6. Organizations established after the entry of this Chapter into force shall start paying monthly advance payments on the expiry of a complete quarter, as of the date of their state registration.