The discussion about the value added tax (VAT) reduction from 2009 is over. The Vice Prime Minister Alexey Kudrin declared that instead of VAT reduction in 2009 the state will reduce the mineral extraction tax (MET). And that will reduce the oil companies’ tax collection by RUR 100 bln. However, the present tax imposition for Gazprom remains, for which the Ministry of Finance planned MET increase. The decision was approved by the president Vladimir Putin; therefore the lobbyists of VAT reduction have already considered it final

Federal Tax Service (FTS) reported about extraordinarily high growth of tax revenues. In January, 2008 as compared to January, 2007 they grew almost by 70%. The growth dynamics of tax collections repeatedly outstrips the growth rates of economy even adjusted for inflation.

Prime Minister Viktor Zubkov hurries his government. However, it is quite clear, he has been given not so much time to achieve concrete results. But Zubkov has no other way out: the president gave tasks that the Cabinet should execute, though for a short period of time. Therefore, prime minister demands from his subordinates to the utmost, creating the most necessary tension. Zubkov actually followed the way of his predecessor Mikhail Fradkov, upholding the alleviation of tax burden. He demanded from the heads of the federal executive body – by all appearances, from the Ministry of Finance – to prepare own suggestions about taxes exemption of companies’ expenses and citizens for education and medical insurance, and also for co-financing of pension accruals and to pass them to the Ministry of Economic Development and Trade within the month

According to the taxation aspects research conducted by the Ernst & Young Company, the tax reform continues in Russia. It is directed on regulation of transfer pricing and companies’ tax treatment. However many companies are not satisfied with the taxation reform carrying out rates. They are disappointed with the tax authorities’ inconsistency in the tax laws application and interpretation.

The Ministry of Finance has published the list of offshores, registration in which will not allow the companies to transfer tax-free dividends to Russia. According to the experts’ opinion, there is no importance in the regular black list publication. Close to the state large companies, as a rule, do not use doubtful tax jurisdictions as they have a dividend privilege.

The changes in the tax residence determination order of individual persons dated January, 1, 2007 aroused a great number of questions among taxpayers. It is necessary to explain tax residence determination peculiarities for the calculation of tax on individual persons’ income after generalization of the Russian Ministry of Finance letter.

Services of program development for electronic computers, computers and databases, rendered by Russian organization to the foreign partner, are not acknowledged as the object of VAT imposition in Russian Federation (RF). About this informs the Ministry of Finance in the letter of September, 12, 2007 # 03-07-08/255.

From January, 1, 2001 taxation of foreign natural persons in the Russian Federation is carried out on the basis of the chapter 23 of tax code of the Russian Federation. Regulations of operating intergovernmental agreements about avoidance of double taxation, made between the Russian Federation or former USSR and foreign countries are taken into account.