Section IX. Regional Taxes and Fees

Chapter 27. Sales Tax

Article 347. General Provisions

A sales tax (hereinafter referred to as "the tax") is instituted by the present Code and laws of Russian regions and put into force in compliance with the present Code by laws of Russian regions and its payment shall be compulsory on the territory of a relevant Russian region.

When a Russian region institutes the tax it shall set the rate thereof, a procedure and term for the payment of the tax, the form of a report on the tax.

Article 348. Taxpayers

1. The following shall be recognised to be payers of the sales tax (hereinafter referred to as "taxpayers"):

1) organisations;

2) individual entrepreneurs.

2. The organisations and individual entrepreneurs specified in this article shall be recognised as taxpayers if they sell goods (works, services) on the territory of a Russian region in which the said tax has been instituted.

Article 349. Tax Basis

The tax basis shall be transactions of sale of goods (works, services) to natural persons on the territory of a Russian region. Transactions of sale of goods (works, services) shall be recognised as tax basis in case when such a sale is effected for cash and also through the use of settlement or credit bank cards.

Article 350. The Transactions Not Subject to Taxation (Relieved from Taxation)

1. Transactions of sale of the following goods (works, services) to natural persons shall not be subject to taxation:

bread and bakery items, milk and dairy products, vegetable oil, margarine, flour, poultry eggs, cereals, sugar, salt, potato, infant and diabetic food;

children's garments and footwear;

medicines, prosthetic and orthopaedic articles;

housing and utility services, services of leasing out housing accommodations and also services of provision of accommodation in hostels;

buildings, structures, plots of land and other facilities relating to immovable property and also securities;

the vouchers (meals vouchers) of a sanatorium/health resort and health rehabilitation institutions, recreational facilities sold to disabled persons; goods (works, services) connected with education, education/production, scientific or tutelage processes and produced by educational institutions;

educational and scientific book products;

periodical printed editions, except for advertising or erotic printed editions;

services in the field of culture and art provided by culture and art institutions and organisations (theatres, cinemas, concert organisations and teams, clubs-type institutions, in particular rural ones, libraries, circuses, lecture-halls, planetariums, culture and recreation parks, botanical gardens, zoos) in the case of their conducting theatrical shows, cultural and educational events, in particular, transactions of sale of entry tickets and subscription tickets;

services of keeping children in pre-school institutions and of providing care to ill and senior citizens;

services of carriage of passengers by the mass transit systems of a municipal entity (except for taxis) and also services of suburban carriage of passengers by sea, river, railway and motor road transport;

services provided by credit organisations, insurers, non-state pension funds, professional participants in the securities market within the framework of their activity subject to licensing and also services provided by the bar;

rite services of burial offices, cemeteries and crematoriums, services of conducting rites and events performed by religious organisations;

services which are provided by authorised governmental bodies and local government bodies and for which relevant types of duties and fees are charged.

2. If a taxpayer accomplishes transactions subject to taxation and transactions not subject to taxation (relieved from taxation) under the present article the taxpayer shall keep separate records of such transactions.

Article 351. Tax Base

The tax base shall be determined as the value of sold goods (works, services) calculated on the basis of applied prices (tariffs) with the account taken of the value added tax and excise taxes (for excisable goods) less the tax.

Article 352. Tax Period

The tax period is hereby established to be a calendar month.

Article 353. Tax Rate

1. The tax rate shall be set by laws of Russian regions as not exceeding 5 per cent.

2. Differentiated tax rates cannot be set in respect of transactions of sale of specific types of goods (works, services) within the tax rate set by Item 1 of the present article.

3. Differentiated rates shall not be set depending on who the taxpayer or buyer (customer, consignor) of the goods (works, services) is.

Article 354. Procedure for Calculating the Tax

1. The amount of the tax shall be calculated as a percentage share of the tax base corresponding to the tax rate.

The tax amount shall be included by the taxpayer in the price of the goods (works, services) with which the buyer (customer, consignor) is charged.

2. The tax shall be payable at the place of transactions of sale of the goods (works, services) subject to taxation under the present Code.

3. If under the terms of a contract of commission agency (contract of agency, contract of agency service) the actual sale of goods (works, services) to buyers is effected by a commission agent (agent) and amounts of money for the goods (works, services) sold come to the cash office (settlement account) of the commission agent (agent) the duty to pay the tax and remit it to the budget is vested in the commission agent (agent) who in such a case is recognised to be a tax agent. In such a case the amount of tax shall be calculated on the basis of the full price of the goods (works, services) including the remuneration of the commission agent (agent). In the case of receipt of proceeds from the commission agent (agent) the principal shall not pay the tax if the tax has been paid by the commission agent (agent).

If under the terms of a contract of commission agency (contract of agency, contract of agency service) the actual sale of goods (works, services) to buyers is effected by the commission agent (agent) and amounts of money for the sold goods (works, services) the tax shall be paid to the budget by the principal. In such a case the amount of tax shall be calculated by the principal on the basis of the full price of the goods.

4. The date of accomplishment of transactions of sale of goods (works, services) recognised as tax basis shall be deemed the day when proceeds are received for the goods (works, services) sold in bank accounts or the day when proceeds are received by the cash office or the day when the goods (works, services) are transferred to the buyer.

Article 355. The Peculiarities of Calculating and Paying the Tax at the Place of Location of Isolated Units of the Organisation

An organisation accomplishing transactions of sale of goods (works, services) through its isolated units located outside of the place where the organisation is located shall pay the tax on the territory of the Russian region where the transactions of sale of goods (works, services) on the basis of the value of the goods (works, services) sold through the isolated unit.