|                                                                                                                                                             |  | RUSSIA  CHANGES  CUSTOMS  RULES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
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|**BISNISHome PageSearchBISNISEmbassyReportsCountryReportsIndustryReportsPublicationsSourcesof FinanceLeadsand EventsExchangeRatesState ExportsOtherSources** |  | May 1998by Tatyana KapelushIn recent months Russian laws and regulations governing the treatment of goods imported into
the country have undergone some important changes, including modifications to the excise tax,
customs duties, and the value-added tax (VAT).  New payment schedules for the excise tax and
new formulas for calculating import duties are likely to complicate customs requirements for U.S.
exporters.  Changes to the VAT, on the other hand, eliminate this tax on some important types of
transactions.Excise Tax Amendments
Recent amendments to the Russian Federation's Law "On the Excise Tax" stipulate that the sale
of excisable goods should be recognized on the date such goods are shipped.  For excise-tax
purposes, the term "sale" includes gratuitous transfers, barter, and reciprocal offsets.  Since
February 18, 1998, excise tax must be shown as a separate line on all payment and supply
documents.  Excise tax must now be paid on first-time excisable goods imported to Russia where
clearance under interstate customs agreements is not applicable.  Excisable goods used to produce
non-excisable goods are also subject to excise tax.New deadlines for excise tax payment are now in force, as well.  Tax on excisable goods sold
between the first and the fifteenth days (inclusive) of the reporting month must be paid no later
than the thirtieth day of the following month.  Excise duties on goods sold between the sixteenth
and the last day of the month must be paid no later than the fifteenth day of the second month
following the reporting month.Excise tax rates have been increased on most goods.  Notably, the tax rate for automobiles has
increased from 5 percent to 10 percent, although cars with engine capacity of less than 2,500
cubic centimeters are now exempt.  Also tax exempt are: ethylated therapeutic, preventive, and
diagnostic substances registered in the State Register of Medical Substances; medical supplies;
substances prescribed by pharmacists; and cosmetics registered with the appropriate federal
bodies.New Import Duties
As of February 1, 1998, the Russian Government imposed new, combined import duty rates for
certain food products, dishes, and clothing, whose rates were formerly calculated as a percentage
of customs value.  The combined rate is directed at small traders suspected of under-reporting the
true value of imports.  The combined rate, which totals 30 percent of the customs value of
imports but no less than 1 ECU ($1.33) per kilogram, will also apply to second-hand clothing.Other changes affect foreign firms' representation offices in Russia.  Only companies legally
registered in Russia may now clear goods through customs.  Representation offices must use local
customs brokers.  The State Customs Committee will also advise the tax authorities in the city
where a representative office is located of the import of large consignments of goods to ensure
compliance with Russian tax obligations.Vehicles shipped to Russia for use by representative offices can be sold at the end of a three-year
period without the payment of customs duties.  Prior approval must be obtained from customs in
order to avoid paying duty, however.VAT Invoices/Amendments
VAT invoicing has also been simplified and brought closer into line with established international
practice.  VAT invoices are no longer required for transactions involving securities (except for
brokerage and intermediary services) and many banking and insurance operations.  VAT invoices
may now be signed by any individual authorized by the head of the company.  Also, the
requirements to indicate statistical codes and bank details are abolished.  Several amendments
have also been adopted relating to the maintenance of purchase and sales records.The State Tax Service has amended its VAT regulations, as well.  Charter of aircraft and ships
outside Russia are now exempt from VAT (documentation is required).  Transportation services
provided by Russian companies for imported goods are also exempt, provided the cost is included
in the goods' customs value.  VAT is now payable on export sales if payment for the goods is not
received within 180 days of customs clearance.  The Tax Service has also announced a simplified
list of documents required when claiming an offset of input VAT (when the goods are actually
exported, additional documentation is required).  For more information, visit the BISNIS
CustomsCorner, at www.mac.doc.gov/bisnis/customs.htm.Tatyana Kapelush works for BISNIS in Moscow.This report is provided courtesy of the Business Information Service for the Newly
Independent States (BISNIS)