Article 304. Specifics in Defining the Tax Base on Operations with the Financial Instruments of Futures Deals

1. The tax base on transactions with the financial instruments of futures deals circulated on the organised market, and the tax base of transactions with the financial instruments of futures deals not circulated on the organised market shall be computed separately.

2. The tax base on transactions with the financial instruments of futures deals circulated on the organised market shall be defined as the difference between the sums of the incomes from the said deals with all the basic asset due to receipt for the reporting (tax) period, and the sums of the outlays on the said deals with all the basic assets for the reporting (tax) period. The negative difference shall be recognised, respectively, as the loss from such operations.

The loss from transactions with the financial instruments of futures deals circulated on the organised market shall reduce the tax base calculated in conformity with Article 274 of the present Code.

3. The tax base on transactions with the financial instruments of futures deals not circulated on the organised market shall be defined as the difference between the incomes from the said operations with all the basic assets and the outlays on the said transactions with all the basic assets for the reporting (tax) period. The negative difference shall be, respectively, recognised as the losses from such transactions.

The loss from operations with the financial instruments of futures deals not circulated on the organised market, shall not reduce the tax base defined in conformity with Article 274 of the present Code (with the exception of the cases mentioned in Item 5 of this Article).

4. The losses on transactions with the financial instruments of futures deals not circulated on the organised market may be referred to the reduction of the tax base, which is formed on transactions with the financial instruments of futures deals not circulated on the organised market, in the subsequent tax periods, in the order established in this Chapter (with the exception of the cases envisaged by Item 5 of this Article).

5. Under the condition that the hedging operations are formalised taking account of the demands of Item 5 of Article 301 of the present Code, the incomes on such transactions with the financial instruments of futures deals shall increase, and the outlays shall reduce the tax base on other operations with the object of hedging.

The banks shall have the right to refer to the reduction of the tax base, defined in conformity with Article 274 of the present Code, the losses from transactions with the financial instruments of futures deals not circulated on the organised market, the basic asset of which is foreign currency and which are executed by the delivery of the basic asset.

6. When delineating the tax base on transactions with the financial instruments of futures deals, the provisions of Items 2-13 of Article 40 of the present Code may be applied only in the cases stipulated by this Chapter.

Article 305. Specifics in the Evaluation of Operations with the Financial Instruments of Futures Deals for the Purposes of Taxation

1. With respect to the financial instruments of futures deals circulated on the organised market, the actual price of the deal shall be recognised for taxation purposes as the market price, if the actual price of the deal lies in the interval between the minimum and the maximum price of deals (in the price interval) with the said instrument, registered by the trade organiser as on the date of making the deal.

If the deals on one and the same financial instrument of futures deals were performed through two or more trade organisers, the participant in the futures deals shall have the right to choose on his own the trade organiser who has registered the price interval which will be used for recognising the actual price of the deal as the market price for the purposes of taxation.

If the trade organiser has no information on the price interval as on the date of concluding the corresponding deal, for the said purposes the data of the trade organiser on the price interval as on the date of the closest auction which was held before the day of making the corresponding deal shall be used.

2. With respect to the financial instruments of futures deals not circulated on the organised market, for the purposes of taxation the actual price of the deal shall be recognised as the market price if any of the following conditions are noted:

1) the price of the corresponding deal lies in the price interval of a similar (homogeneous) financial instrument of futures deals, registered by the trade organiser on the date of making such deal or on the date of the closest auction held before the said date;

2) the price of the corresponding deal lies within the scope of 20 per cent towards a rise or fall from an average weighted price of a similar (homogeneous) financial instrument of a futures deal, calculated by the trade organiser in conformity with the rules he has established by the results of the auction as on the date of concluding such deal, or by the results of the closest auction held before the said date.

If there is no information on the results of the auction on similar (homogeneous) financial instruments of futures deals, the actual price of the deal shall be recognised for the purposes of taxation as the market price, if the actual price of the deal differs by no more than 20 per cent from the settlement price of this financial instrument of futures deals, which in its turn may be defined as on the date of making the futures deal, taking into account the concrete terms of the concluded futures deal, the specifics of the circulation and the price of the basic asset, the level of the interest rates on the monetary funds in the corresponding currency and other indices, information about which can serve as grounds for such computation.

Article 306. Specifics in the Taxation of Foreign Organisations. Permanent Representation of a Foreign Organisation

1. The provisions of Articles 306-309 of the present Code shall establish the specifics in the calculation of tax by foreign organisations engaged in business activity on the territory of the Russian Federation, if such activity leads to the creation of a permanent representation of the foreign organisation, and the specifics in the calculation of tax by foreign organisations which are not involved in an activity through a permanent representation in the Russian Federation, while deriving an income from sources in the Russian Federation.

2. Seen as the permanent representation of a foreign organisation in the Russian Federation for the purposes of this Chapter shall be an affiliate, representation, department or bureau, an office, agency or any other set-apart subdivision or other place of activity of this organisation (hereinafter 'the department'), through which the organisation regularly performs its business activity on the territory of the Russian Federation, involved in:

- the use of mineral wealth and (or) the use of other natural resources;

- the performance of the contract-envisaged works aimed at the construction, installation, assembly, mounting, adjusting, servicing and running of equipment, including entertainment slot-machines;

- selling commodities from store-houses situated on the territory of the Russian Federation which are owned or rented by this organisation;

- the performance of other works, rendering services and carrying out other kinds of activity, with the exception of that stipulated by Item 4 of this Article.

3. The permanent representation of a foreign organisation shall be seen as set up from the start of the regular performance of business activity through its department. However, the activity involved in organising such department does not of itself establish a permanent representation. The permanent representation shall stop its existence from the moment of termination of the business activity of the foreign organisation through this department.

In the case of the use of the mineral wealth or of utilising other kinds of natural resources, the permanent representation of a foreign organisation shall be seen as set up since the earliest of the following dates: the date of coming into force of the licence (the permit) certifying the right of this organisation to the performance of the corresponding activity, or the date of the actual start of such activity. If the foreign organisation performs works or renders services to another person who possesses this licence (permit), or if it comes out as a general contractor for the person possessing such licence (permit) in resolving the questions involved in the formation and the termination of the existence of the permanent representation of this foreign organisation shall be applied a procedure similar to that established by Items 2-4 of Article 308 of the present Code.

4. The fact of performance by the foreign organisation on the territory of the Russian Federation of an activity of preparatory or auxiliary character in the absence of any sign of a permanent representation stipulated by Item 2 of this Article, cannot be considered as leading to the formation of a permanent representation. Referred to a preparatory or an auxiliary activity shall be, in particular:

1) the use of structures exclusively for the purposes of the storage, demonstration and (or) delivery of commodities belonging to this foreign organisation before the start of such delivery;

2) keeping stock of commodities belonging to this foreign organisation exclusively for the purposes of their storage, demonstration and (or) delivery before the start of such delivery;

3) maintaining a permanent place of activity exclusively for the purposes of purchasing commodities by this foreign organisation;

4) maintaining a permanent place of activity exclusively for the collection, processing and (or) dissemination of information for bookkeeping, for marketing or advertising, or for studying the market of commodities (works, services) sold by the foreign organisation, if such activity is not the principal (regular) activity of this organisation;

5) keeping a permanent place of activity exclusively for the purposes of signing contracts on behalf of this organisation, if the signing of contracts takes place in conformity with the detailed written instructions from the foreign organisation.

5. The fact of the foreign organisation's possession of securities and of participation shares in the capital of Russian organisations, as well as of other property on the territory of the Russian Federation in the absence of any sign of a permanent representation envisaged by Item 2 of this Article, is not in itself considered for such foreign organisation as leading to the creation of a permanent representation in the Russian Federation.

6. The fact of conclusion by the foreign organisation of an agreement of simple partnership or some other agreement presupposing a joint activity of its parties (participants), performed wholly or in part on the territory of the Russian Federation, cannot in itself be considered for the given organisation as leading to the establishment of a permanent representation in the Russian Federation.

7. The fact of the supply by the foreign organisation of the personnel for work on the territory of the Russian Federation in another organisation in the absence of the signs of a permanent representation, stipulated by Item 2 of this Article, cannot be considered as leading to the creation of a permanent representation of the foreign organisation which has supplied the personnel, if such personnel act exclusively on behalf of and in the interest of the organisation to which it was directed.

8. A foreign organization's performance of transactions involved in the import to the Russian Federation or in the export from the Russian Federation of commodities, including in the framework of foreign trade contracts, in the absence of the signs of a permanent representation envisaged by Item 2 of this Article, cannot be considered as leading to the formation of a permanent representation of this organisation in the Russian Federation.

9. The foreign organisation shall be seen as having a permanent representation if this organization delivers from the territory of the Russian Federation the commodities in its possession being a result of processing on the customs territory or under customs control and also if this organisation performs an activity satisfying the signs envisaged by Item 2 of this Article, through a person who, on the grounds of contractual relations with this foreign organisation, represents its interests in the Russian Federation, acts on the territory of the Russian Federation on behalf of this foreign organisation, possesses and regularly exercises the powers for concluding contracts or for coordinating their essential terms on behalf of the given organisation, thus creating the legal consequences for the given foreign organisation (a dependent agent).

The foreign organisation shall not be seen as having a permanent representation if it performs an activity on the territory of the Russian Federation through a broker, a commission agent, a professional Russian securities market trader or through any other person acting in the framework of his principal (regular) activity.

10. The fact that the person performing activity on the territory of the Russian Federation is reciprocally dependent on the foreign organisation shall not be considered as leading to the formation of a permanent representation of this foreign organisation in the Russian Federation in the absence of the signs of a dependent agent envisaged by Item 9 of this Article.

Article 307. Specifics in the Taxation of Foreign Organisations Performing an Activity Through a Permanent Representation in the Russian Federation

1. Recognised as the object of taxation for foreign organisations which perform an activity in the Russian Federation through a permanent representation shall be:

- the income derived by the foreign organisation as a result of the performance of an activity on the territory of the Russian Federation through its permanent representation, reduced by the amount of the outlays made by this permanent representation which shall be defined taking account of the provisions of Item 4 of this Article;

- the incomes of the foreign organisation from the possession, use and (or) disposal of the property of the permanent representation of this organisation in the Russian Federation minus the outlays involved in deriving such incomes;

- the other incomes from the sources in the Russian Federation pointed out in Item 1 of Article 309 of the present Code, referred to the permanent representation.

2. The tax base shall be delineated as the monetary expression of the object of taxation, established by Item 1 of this Article.

When delineating the tax base of a foreign non-profit organisation, the provisions of Item 2 of Article 251 of the present Code shall be taken into account.

3. If the foreign organisation performs on the territory of the Russian Federation an activity of a preparatory and (or) an auxiliary character in the interest of third persons which is leading to the formation of a permanent representation, and if with respect to such an activity no receipt of any remuneration is envisaged, the tax base shall be defined in the amount of 20 per cent from the sum of the outlays of this permanent representation involved in such activity.

4. If the foreign organisation has on the territory of the Russian Federation more than one department, the activity through which is leading to the establishment of a permanent representation, the tax base and the sum of the tax shall be calculated separately for every department.

If the foreign organisation performs through such departments an activity in the framework of a single technological process, or in other similar cases in agreement with the Ministry of Taxation of the Russian Federation, such organisation shall have the right to calculate taxable profit connected with its activity through a department on the territory of the Russian Federation, as a whole by the group of such departments (including for all the departments), under the condition that all the departments included in this group apply the same accounting policy for the purposes of taxation. In this case, the foreign organisation shall determine on its own which of the departments shall keep the tax records and submit the tax declarations at the place of location of every department. The sum of tax on the profit subject to payment to the budget in this case shall be distributed between the departments in the general order envisaged by Article 288 of the present Code. The cost of the fixed assets and of the non-material assets, or an average-listed number of the workers (the fund for the remuneration of the workers' labour) not involved in the activity of the foreign organisation on the territory of the Russian Federation through the permanent representation shall not be recorded.

5. Foreign organisations performing an activity in the Russian Federation through a permanent representation shall apply the provisions envisaged by Articles 280, 283 of the present Code.

6. Foreign organisations performing an activity in the Russian Federation through a permanent representation shall pay tax according to the rates established by Item 1 of Article 284 of the present Code, with the exception of the incomes listed in Subitems 1 and 2 and in the second paragraph of Subitem 3 of Item 1 of Article 309 or the present Code. The said incomes referred to the permanent representation shall be levied with tax apart from the other incomes, in accordance with the rates established by Subitem 2 of Item 3 and by Item 4 of Article 284 of the present Code.

7. When into the sum of the foreign organisation's profit are included the incomes from which, in conformity with Article 309 of the present Code, tax has been in fact withheld and transferred to the budget, the sum of the tax subject to payment by this organisation into the budget, into which the sum of the withheld tax was transferred, shall be reduced by the sum of the withheld tax. If the sum of the tax withheld in the reporting period exceeds the sum of the tax for this period, the sum of tax paid in excess shall be subject to return from the budget in conformity with the present Code, or shall be offset against the future tax payments of this organisation.

8. Foreign organisations performing an activity in the Russian Federation through a permanent representation shall pay the advance payments and tax in the order stipulated by Articles 286 and 287 of the present Code.

Foreign organisations performing an activity in the Russian Federation shall submit the tax declaration by the results of the tax (reporting) period, as well as the annual report on activity in the Russian Federation in compliance with the form endorsed by the Ministry of Taxation of the Russian Federation, through the permanent representation to the tax body at the place of location of the permanent representation of this organisation in the order and within the time terms established by Article 289 of the present Code.

If the activity of the permanent representation of the foreign organisation in the Russian Federation is stopped before the end of the tax period, the tax declaration for the last reporting period shall be submitted by the foreign organisation in the course of one month from the day of termination of the activity of this department.