Article 340. Procedure for Valuating Recovered Mineral Resources When Tax Base Is Calculated

1. The taxpayer shall be responsible for valuating recovered mineral resources by one of the below methods:

1) on the basis of the taxpayer's prevailing selling prices in a relevant tax period with no account taken of state subventions;

2) on the basis of the taxpayer's selling prices of a recovered mineral resource prevailing in a relevant tax period;

3) on the basis of the rated value of the recovered mineral resources.

2. If the taxpayer applies the assessment method specified in Subitem 1 Item 1 of the present article the value of unit of recovered mineral resource shall be assessed on the basis of proceeds determined with the taxpayer's selling prices of the recovered mineral resource prevailing in the current tax period (or in the absence thereof, in the preceding tax period) with no account taken of subventions out of the budget aimed at reimbursing the difference between wholesale price and rated value.

In such a case proceeds from the sale of a recovered mineral resource shall be determined on the basis of selling prices (less the sum of subventions from the budget) determined with due regard to the provisions of Article 40 of the present Code, less the value added tax (in the case of sale on the territory of the Russian Federation and to the member states of the Commonwealth of Independent States) and excise tax reduced by the sum of the taxpayer's delivery expenses depending on delivery terms.

Where the proceeds from the sale of a recovered mineral are received in foreign currency, it shall be conversed into roubles at the exchange rate established by the Central Bank of the Russian Federation as on the date of sale of the recovered mineral determined depending on the method of recognizing incomes selected by a taxpayer in compliance with Article 271 or Article 273 of this Code.

For the purposes of the present chapter the sum of delivery expenses shall include expenses incurred towards customs duties and fees relating to foreign trade deals, the expenses incurred through the delivery (transportation) of the recovered mineral resource from finished-product warehouse (recording centre, main pipeline entry, a centre for shipping to a consumer or for processing, consignee network partition points and other similar conditions) to the consignee and also compulsory cargo insurance expenses calculated under Russian law.

For the purposes of the present chapter the delivery (transportation) expenses relating to the movement of a recovered mineral resource to the consignee, in particular include the expenses of delivery (transportation) by means of main pipelines, railway, waterway and other means of transport, the expenses of drainage, filling, loading, unloading and transhipment, port services charges and transportation/forwarding charges.

The assessment shall be done separately in respect of each type of recovered mineral resource on the basis of the selling prices for a relevant recovered mineral resource.

The value of a recovered mineral resource shall be determined as the quantity of the recovered mineral resource calculated under Article 339 of the present Code times the unit value of the recovered mineral resource calculated under the present item.

The unit value of a recovered mineral resource shall be calculated as the ratio of proceeds from the sale of the recovered mineral resource calculated under the present item to the quantity of the sold recovered mineral resource.

3. If there are no state subventions for the selling prices of a recovered mineral resource the taxpayer shall apply the assessment method specified in Subitem 2 Item 1 of the present article. In such a case the valuation of a unit of the recovered mineral resource shall be effected on the basis of proceeds from the sale of the recovered mineral resource calculated on the basis of selling prices with due regard to the provisions of Article 40 of the present Code less the value added tax (in the case of sale on the territory of the Russian Federation and to the member states of the Commonwealth of Independent States) and excise tax reduced by the sum of the taxpayer's delivery expenses depending on the delivery terms.

Where the proceeds from the sale of a recovered mineral are received in foreign currency, it shall be conversed into the currency of the Russian Federation at the exchange rate established by the Central Bank of Russian Federation as on the date of sale the recovered mineral determined depending on the method of recognizing incomes selected by a taxpayer in compliance with Article 271 or Article 273 of this Code.

For the purposes of the present chapter the sum of delivery expenses shall include expenses incurred towards customs duties and fees relating to foreign trade deals, the expenses incurred through the delivery (transportation) of the recovered mineral resource from finished-product warehouse (recording centre, main pipeline entry, a centre for shipping to a consumer or for processing, consignee network partition points and other similar conditions) to the consignee and also compulsory cargo insurance expenses calculated under Russian law.

For the purposes of the present chapter the delivery (transportation) expenses relating to the movement of a recovered mineral resource to the consignee, in particular include the expenses of delivery (transportation) by means of main pipelines, railway, waterway and other means of transport, the expenses of drainage, filling, loading, unloading and transhipment, port services charges and transportation/forwarding charges.

The assessment shall be done separately in respect of each type of recovered mineral resource on the basis of the selling prices for a relevant recovered mineral resource.

The value of a recovered mineral resource shall be determined as the quantity of the recovered mineral resource calculated under Article 339 of the present Code times the unit value of the recovered mineral resource calculated under the present item.

The unit value of a recovered mineral resource shall be calculated as the ratio of proceeds from the sale of the recovered mineral resource calculated under the present item to the quantity of the sold recovered mineral resource.

4. Where a taxpayer does not sale a recovered mineral, he shall apply the method of assessment indicated in Subitem 3 of Item 1 of this Article.

In such a case the taxpayer shall be responsible for assessing the rated value of a recovered mineral resource according to tax record data. Here, the taxpayer shall apply the incomes and expenses recognition procedure he uses for calculating tax base for the purposes of the tax on profits of organizations.

The following types of expenses incurred by the taxpayer in the tax period shall be taken into account in the determination of the rated value of a recovered mineral resource:

1) material expenses calculated in keeping with Article 254 of the present Code, save material expenses incurred in the course of storage, transportation, packing and other preparation (in particular, pre-sale preparation), and sale of the recovered mineral resources (including material expenses, as well as safe for the outlays made by the taxpayer in the manufacture and sale of other types of products, goods (works, services);

2) remuneration for labour expenses calculated in compliance with Article 255 of the present Code, save expenses towards remuneration for the labour of workers not engaged in the recovery of minerals;

3) accrued depreciation calculated in compliance with the procedure established by Articles 258 - 259 of the present Code, save the sums of accrued depreciation on depreciated assets not relating to recovery of minerals;

4) fixed asset repair expenses calculated in compliance with the procedure established by Article 260 of the present Code, save fixed asset repair expenses not relating to recovery of minerals;

5) natural resource mining expenses calculated in compliance with Article 261 of the present Code;

6) the expenses stipulated in Subitems 8 and 9 of Article 265 of the present Code, save the expenses indicated therein as not relating to recovery of minerals;

7) other expenses calculated in compliance with Articles 263, 264 and 269 of the present Code, save other expenses not relating to recovery of minerals.

When the rated value of a recovered mineral resource is determined the expenses specified in Articles 266, 267 and 270 of the present Code shall not be taken into account.

Here, the direct expenses made by a taxpayer in the tax period shall be distributed among recovered mineral resources and work-inprocess as of the end of the tax period. The work-in-process balance shall be determined and assessed with due regard to the peculiarities specified in Item 1 Article 319 of the present Code. When determining the estimated cost of a recovered mineral there shall be likewise accounted the indirect outlays determined in compliance with Chapter 25 of this Code. With this, the indirect outlays made by a taxpayer during a report (tax) period shall be distributed between the outlays on the recovery of minerals and the outlays on other activities of a taxpayer in proportion to the share of the direct expenses pertaining to the recovery of minerals in the total amount of direct expenses. The total amount of the outlays made by a taxpayer in a tax period shall be distributed between recovered minerals in proportion to the share of each recovered mineral in the total quantity of recovered minerals in this tax period. The sum of indirect expenses relating to the mineral resources recovered in the tax period shall be included in full in the rated value of the mineral resources recovered in the relevant tax period.

5. Assessment of the cost of the precious metals extracted from ledge (ore), gravel and man-caused deposits shall be made reasoning from a taxpayer's selling prices of chemically pure metal in an appropriate tax period without taking into account the value-added tax, decreased by the outlays of a taxpayer on the affinage and delivery (transportation) thereof to the recipient (and in the absence of such prices - from those in the nearest of the previous tax periods).

With this, the cost of one unit of said recovered mineral shall be determined as the product of the share (in natural indicators) of a chemically pure metal in one unit of the recovered mineral and the cost of one unit of the chemically pure metal.

6. Assessment of the cost of recovered precious stones shall be made proceeding from their initial assessment made in compliance with the laws of the Russian Federation on precious metals and precious stones.

Assessment of the cost of recovered unique precious stones and unique nuggets of precious metals which are not subject to processing shall be made proceeding from their selling prices without taking into account the value-added tax decreased by the amounts of a taxpayer's outlays on the delivery (transportation) thereof to the recipient.

Article 341. Tax Period

A calendar month shall be deemed a tax period.

Article 342. Tax Rate

1. Taxation shall be effected at zero tax rate in the case of recovery of:

1) mineral resources in as much as rated mineral resource loss is concerned.

For the purposes of the present chapter the "rated losses of mineral resources" means the actual losses of mineral resources occurring during recovery which are technologically relating to the accepted deposit mining scheme and technology, within the maximum limits on rated losses endorsed in compliance with the procedure established by the Government of the Russian Federation;

2) accompanying gas;

3) underground waters containing mineral resources (industrial waters) the extraction of which is connected with the mining of other types of mineral resources and which are recovered in the course of mineral deposit mining and in the case of construction and operation of underground structures;

4) mineral resources in the case of mining of low-quality (remaining low-quality) mineral deposits or mineral deposits written off earlier (except for the cases of a deterioration in the quality of a mineral deposit as the result of a selective mining). Mineral deposits shall be classified as "low-quality" in the manner established by the Government of the Russian Federation;

5) the mineral resources remaining in overburdens, diluting (impoverishing) rock, processing facility dumps or waste in connection with the lack of know-how in the Russian Federation for extracting them and also mineral resources mined from overburdens and diluting (impoverishing) rock, mining facility waste and mining-related facility waste (in particular, resulting from oil slurry processing) within the maximum limits on the content of mineral resources in the said rock and waste endorsed in the manner established by the Government of the Russian Federation;

6) mineral waters used by a taxpayer exclusively for medical treatment and health rehabilitation purposes without a direct sale thereof (in particular, treatment, preparation, processing and bottling into containers);

7) underground waters used by a taxpayer exclusively for agricultural purposes, in particular, in irrigation of agricultural-purpose land, water supply to animal farms, comprehensive animal facilities, poultry farms, fruit and vegetable gardening and animal-breeding associations of citizens.

2. If not otherwise provided for by Item 1 of this Article, taxes shall be levied at the tax rate of:

3,8 per cent, as regards the recovery of potassium salts;

4,0 per cent, as regards the recovery of:

peat;

coal, lignite, anthracite and shale oil;

Apatite-nipheline, apatite and phosphorite ores;

4,8 per cent for the recovery of conditioned ferrous metal ore;

5,5 per cent for the recovery of:

radioactive metal raw materials;

non-metal mining chemical raw materials (except for potassium salts, apatite-niphelimic, apatite and phosphorite ores);

non-metal raw materials used mainly in building industry;

natural salt and pure sodium chloride;

underground industrial and thermal waters;

nephelines and bauxites;

6,0 per cent for the recovery of:

non-metal mining raw materials;

bituminous rocks;

concentrates and other intermediate products containing gold;

other minerals which are not included into other groupings;

6,5 per cent for the recovery of:

concentrates and other intermediate products containing precious metals (safe for gold);

precious metals which are useful components of multicomponent complex ore (safe for gold);

quality piezo-optical raw material, high-purity quartz raw material and gem raw material products;

7,5 per cent for the recovery of mineral water;

8,0 per cent or the recovery of:

conditioned non-ferrous metal ores (safe for nephelines and bauxites);

rare metals either making up their own deposits or associated in ores with other mineral resources;

multi-component complex ores, as well as useful components of complex ores, except for precious metals;

natural diamonds and other precious and semi-precious stones;

26,5 per cent for the recovery of hydrocarbon raw materials.

The taxpayers which have accomplished on their own account prospecting and exploration of the mineral deposits/fields they are mining or which have reimbursed the state in full for the expenses incurred towards the prospecting and exploration of an appropriate quantity of reserves of such minerals and which have been relieved as of July 1, 2001 under federal law from their duty to make deductions towards renewal of mineral and raw material reserves in respect of exploitation of such deposits/fields shall pay the tax on the minerals recovered in a specific license tract with the co-efficient of 0.7 being applied.