16.10.06

Letter No. GV-6-10/935@ from the Federal Tax Service, dated September 18, 2006 was issued as a reminder that as of January 1, 2007, all taxes in the Russian Federation shall be paid in rubles. Amendments to Sections 1 and 2 of the Russian Tax Code, which will become effective starting January of next year, served as the basis for the letter.

Taxpayers who formerly paid their taxes with foreign currency should consult their tax inspectorates for information on the Federal Treasury account details of the local subdivision of the Russian Federation. The taxpayer should also inquire about any other details necessary for ensuring that the funds are received at the intended destination as the tax obligation is not counted as fulfilled if the taxpayer indicates the wrong Federal Treasury account number for his/her respective subdivision or gives an incorrect name for the recipient’s bank (Article 45, Section I of the Russian Tax Code).

If the taxpayer does not have sufficient funds in his/her ruble account, taxes can still be collected from the foreign currency account. However, the withdrawal will be made according to the ruble exchange rate posted by the Russian Central Bank at the moment of payment. The taxpayer shall bear all expenses related to exchanging the currency into rubles. Any overpayment in taxes will be refunded in rubles.