Chapter 26. The Mineral Resource Recovery Tax

Article 334. Taxpayers

Taxpayers of the mineral resource recovery tax (hereinafter in the present chapter referred to as "taxpayers") shall be deemed organisations and individual entrepreneurs recognised as users of subsoil under Russian law.

Article 335. Registration as a Taxpayer of the Mineral Resource Recovery Tax

1. Taxpayers shall be registered as taxpayers of the mineral resources recovery tax (hereinafter referred to as "the tax") at the location of the tract of sub-soil granted to the taxpayer for use under Russian law, except as otherwise required under Item 2 of the present article within 30 days as of the moment of state registration of a license (permit) for using a tract of sub-soil. With this, for the purposes of this Chapter, as the location of the tract of sub-soil granted to a taxpayer for use there shall be recognized the territory of the subject (subjects) of the Russian Federation where the tract of sub-soil is situated.

2. Taxpayers performing mineral resource recovery on the continental shelf of the Russian Federation, in the exclusion economic zone of the Russian Federation and also outside of the territory of the Russian Federation if the recovery is being pursued on territories under the jurisdiction of the Russian Federation (or rented from foreign states or used under an international treaty) in a tract of sub-soil granted to the taxpayer for use shall be subject to registration as taxpayers of the tax at the place of an organization or at the place of residence of a natural person location.

3. The specifics of the tax registration of taxpayers as payers of a tax shall be determined by the Ministry of Taxation of the Russian Federation.

Article 336. Tax Basis

1. Taxation basis for the purposes of the mineral resources recovery tax (hereinafter in the present Chapter referred to as "the tax") shall be as follows, except as otherwise required by Item 2 of the present article:

1) mineral resources recovered from sub-soil on the territory of the Russian Federation in a sub-soil tract granted to a taxpayer for use under Russian law;

2) mineral resources extracted from recovery production waste (lost rock) if such an extraction is subject to a separate licensing under the Russian legislation on sub-soil;

3) mineral resources recovered from sub-soil outside of the territory of the Russian Federation if the recovery is done on territories under the jurisdiction of the Russian Federation (and also rented from foreign states or used under an international treaty) in a tract of sub-soil granted to a taxpayer for use.

2. For the purposes of the present chapter the following shall not be deemed a tax basis:

1) generally-spread mineral resources recovered by an individual entrepreneur and used by him directly for his personal consumption;

2) mineralogical, paleontological and other geological collection items recovered (collected);

3) mineral resources recovered from sub-soil in the case of formation, use, re-construction and repair of specially-protected geological objects having scientific, cultural, aesthetic, sanitary rehabilitation or another public significance. The procedure for the recognition of geological objects as specially-protected geological objects having scientific, cultural, aesthetic, sanitary-rehabilitation or another public significance shall be established by the Government of the Russian Federation;

4) mineral resources extracted from a mining/recovery processing facility's or mining/recovery-related processing facilities own dump or waste (lost rock) if they were generally taxable before when recovered.

5) drainage underground water not included into the state balance sheet of mineral resources extracted when developing mineral deposits or when constructing and operating underground structures.

Article 337. Recovered Mineral Resources

1. For the purposes of the present chapter the mineral resources specified in Item 1 Article 336 of the present Code shall be called recovered mineral resources. Here the "mineral resource" shall mean an output of mineral resource industry and of quarrying (if not otherwise provided for by Item 3 of this Article) contained in a mineral raw material (rock, fluid and another blend) actually recovered (extracted) from sub-soil (waste, lost rock), the former being in compliance with a state standard of the Russian Federation, an industrial standard, regional standard, international standard in terms of its quality or in the absence of such standards in respect of a specific recovered mineral resource, in compliance with an organisation's (enterprise's) standard.

The products received as a result of further processing (dressing, technological process) of a mineral which are products of manufacturing industry may not be deemed a mineral.

2. Below are the types of mineral resources:

1) anthracite, coal, bituminous coal, lignite and combustible shale;

2) peat;

3) hydrocarbon raw material:

water-free, salt-free and stabilised oil, gas condensate from oil and gas fields;

gas condensate from gas condensate fields which has undergone separation, water-separation, light faction stripping and other admixture removal;

combustible natural gas from gas and gas condensate fields;

combustible natural gas (solute gas or the mixture of solute gas and casing-head gas) from oil, gas and oil, gas condensate and oil, oil and gas, oil and gas condensate fields extractive from oil wells (hereinafter referred to as accompanying gas);

4) commodity ores:

of ferrous metals (iron, manganese, chromium);

non-ferrous metals (aluminium, copper, nickel, cobalt, lead, zinc, tin, tungsten, molybdenum, antimony, mercury, magnesium and other nonferrous metals which are not stipulated in other groupings);

rare metals forming their own deposits (titanium, zirconium, niobium, rare earth, strontium, lithium, beryllium, vanadium, germanium, caesium, scandium, selenium, zirconium, tantalum, bismuth, rhenium, rubidium);

multi-component complex ores;

5) useful components of a multi-component complex ore extracted from it, in the case of their being sent within an organization for further processing (dressing, technological process).

6) mining chemical non-metal raw materials (apatite-nephelinic and phosphorite ores, potassium, magnesium and rock salts, boron ores, sodium sulphate, natural sulphur and sulphur in gas, iron pyrite and complex ore deposits, barite, asbestos, iodine, bromine, fluorspar, earth dyes (mineral pigments), carbonaceous rock and other types of non-metal mineral resources for chemical and mineral fertiliser industry);

7) mining non-metal raw materials (abrasive rocks, vein quartz (except special-purity quartz and piezo-optical raw materials), quartzite, carbonaceous rock for metallurgy, quartz-feldspar and siliceous raw materials, glass sands, natural graphite, talcum (steatite), magnesite, talcummagnesite, pyrophyllite, mica-muscovite, mica-phlogopite, vermiculite, refractory clay for the production of drilling slurries and sorbents, other mineral resources not included in other groups);

8) bituminous rocks (safe for those indicated in Subitem 3 of this Item);

9) rare metal raw materials (trace elements) (in particular, indium, cadmium, tellurium, thallium, gallium) and also other recovered mineral resources being associated components in the ores of other mineral resources;

10) non-metal raw materials basically used in the building industry (gypsum, anhydrite, natural chalk, dolomite, limestone fusion agents, limestone, calcareous rock for the manufacture of lime and cement, natural building sand, pebbles, gravels, sand and gravel blends, building stone, siding stone, marl, clay, other non-metal mineral resources used in the building industry);

11) quality products of piezo-optical raw materials, special-purity quartz raw materials and fine gem raw materials (topaz, nephrite, jadeite, rhodonite lazurite, amethyst, turquoise, agate, jasper and others);

12) natural diamonds, other precious stones from bedrock, gravel and man-made deposits, in particular, rough, graded and classified stones (natural diamonds, ruby, emerald, sapphire, alexandrite, amber);

13) concentrated and other semi-products containing precious metals (gold, silver, platinum, palladium, iridium, rhodium, ruthenium, osmium) obtained at the recovery of precious stones, i.e. the recovery of precious metals from bedrock (ore), gravel and man-made deposits;

14) natural salt and pure sodium chloride;

15) underground waters containing mineral resources (industrial water) and/or natural medical treatment resources (mineral water), as well as thermal water;

16) raw stuff of radioactive metals (in particular, uranium and thorium).

3. As a mineral resource there shall be likewise deemed the products being the results of developing a deposit which are received mineral raw material by means of processing technologies which are special types of recovery works (in particular, underground gasification and leaching, dredging and hydraulic excavation in gravel deposits, hydraulicking) and also the processes classified in compliance with mineral licenses as special type of recovery works (in particular, mineral resource recovery from overburden or ore dressing tailings, oil-spill collection by means of special-purpose machines).

Article 338. Tax Base

1. The taxpayer shall be responsible for determining his tax base in respect of every recovered mineral resource (in particular, useful components extracted from sub-soil in association with the recovery of a main mineral resource).

2. The tax base shall be determined as the value of recovered mineral resources, except as otherwise required by the present article. The value of recovered mineral resources shall be determined in compliance with Article 340 of the present Code.

3. The quantity of recovered mineral resources shall be determined in compliance with Article 339 of the present Code.

4. A tax base shall be determined separately for each recovered mineral resource defined under Article 337 of the present Code.

5. In respect of the recovered mineral resources for which different tax rates are established or the tax rate is calculated subject to a coefficient, the tax base shall be determined as applied to each tax rate.

Article 339. Procedure for Determining the Quantity of a Recovered Mineral Resource

1. The taxpayer shall be responsible for determining the quantity of a recovered mineral resource. Depending on the recovered mineral resource its quantity shall be determined in weight or volume units.

2. The quantity of a recovered mineral resource shall be determined directly (through the application of metering means and devices) or indirectly (by means of calculations, by the data on the content of recovered mineral resource in a mineral raw material (waste, lost rock) extracted from sub-soil, except as otherwise required by the present Article. If its is impossible by a direct method an indirect method shall be applied.

The method applied by the taxpayer to determine the quantity of a recovered mineral resource shall be subject to approval within the accounting philosophy of the taxpayer for taxation purposes and it shall be applied by the taxpayer during the whole period of recovery of the mineral resource. The mineral resource quantity assessment method approved by the taxpayer may be changed only if changes are introduced in the technical design of mineral deposit mining in connection with changes in the applied technology of recovering mineral resources.

3. Here, if the taxpayer applies a direct mineral resource quantity assessment method the quantity of a recovered mineral resource shall be determined with account taken of actual loss of the mineral resource.

As the actual loss of a mineral there shall be recognized the difference between the estimated quantity of the mineral by which the mineral reserve is decreased and the quantity of the actually recovered mineral determined on the completion of the full technological cycle of the mineral recovery. The actual losses of a mineral shall be accounted when determining the quantity of the recovered mineral in the tax period, in which the measurement thereof was made, in the amount determined on the basis of the results of the measurements made.

4. When precious metals are extracted from bedrock (ore), gravel and man-made deposits the quantity of a recovered mineral resource shall be determined according to the data from the recovery compulsory records kept under the legislation of the Russian Federation on precious metals and precious stones.

Precious metal nuggets not intended for processing shall be recomineral resource mentioned in Paragraph 1 of the present Item. Furthermore, a tax base shall be determined separately in respect of such nuggets.

5. When precious stones are extracted from bedrock, gravel and manmade deposits the quantity of a recovered mineral resource shall be determined after the primary grading, primary classification and primary valuation of rough stones. Here, unique precious stones shall be recorded separately and a tax base shall be determined separately in respect of such stones.

6. The quantity of a recovered mineral defined in compliance with Article 337 of this Code as useful components contained in recovered multi-component complex ore shall be determined as the quantity of the ore component in chemically pure form.

7. When determining the quantity of a mineral recovered in a tax period, there shall be accounted the mineral in respect of which a complex of manufacturing operations (processes) related to recovery (extraction) of the mineral from sub-soil (waste, spoil) was completed in the tax period, if not otherwise provided for by Item 8 of this Article.

With this, when developing a mineral deposit under a license (permit) for recovery of the mineral, the whole complex of manufacturing operations (processes) stipulated by the preliminary design of developing the deposit of the mineral shall be taken into account.

8. When selling and (or) using mineral raw stuff prior to completing the development of a mineral deposit, the quantity of a mineral recovered in a tax period shall be determined as the quantity of the mineral contained in said mineral raw stuff sold or used for one's own needs in the given tax period.