Source: Federal Law No. 29-FZ of 14 February 1998 "On the introduction of amendments to the Federal Law "On Excise Tax" published 18 February 1998 in "Rossiiskaya Gazeta".

Law on Excise Tax Amendent
Amendments to the Law "On Excise Tax" have been officially published in "Rossiiskaya Gazeta" on 18 of February 1998, and have entered into force on the same date.

Timing of Revenue Recognition for Excise Tax Purposes
In accordance with the law, sale (gratuitous transfer, barter, reciprocal offset) of excisable goods should be recognized on the date such goods have been shipped (transferred). The only exception that is made is for natural gas sales, which are recognized on the date the payment is transferred to the bank accounts (for cash settlements - the date funds are paid to the cash-desk). For excisable goods shipped before the enforcement of the amendments to the law, the procedure for computation and payment of excise tax remains unchanged.

Tax Payment
Starting February 18, 1998 excise tax must be shown as a separate line on all payment/supply documents (including schut-facturas). In addition, beginning from this date new deadlines for payment of excise tax have been introduced.

Tax on excisable goods sold between the 1st and the 15th day inclusive) of the reporting month should be payable no later than the 30th day of the following month.

Excise duties on goods sold between the 16th and the last day of the month must be paid no later than the 15th day of the second month following the reporting month.

Excise tax on natural gas must be paid no later than the 20th of the
following month.

Taxpayers
Taxpayers' list now also includes companies selling first time excisable goods, imported into the territory of the Russian Federation without customs clearance under relevant inter-state customs agreements, or compnies using excisable goods for the production of non-excisable goods.

Excise Tax on Exported Goods
Excise tax now must be paid on goods to be exported. Tax refund may be
obtained if there is documentary proof of export outside the CIS within 90 days from the date of their shipment.

Tax payment deferral may be granted under a bank guaratee only.

Excise Tax Rates
Excise tax rates have been changed (increased for the majority of goods). The tax rate for cars is increased two-fold (from 5% to 10%) . However, cars with engine capacity of less than 2500 cubic centimeters are now excempt from excise tax).

Ethylated therapeutic, preventive and diagnostic substances duly registered and listed in the State Register of Medical Substances, as well as medical supplies and substances prescribed by chemists upon individual formulae are tax exempt. The tax wold also not be levied on ethylated substances and cosmetics registered with appropriate federal bodies.

This report is provided courtesy of the Business Information Service for the Newly Independent States (BISNIS)