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DETERMINATION OF THE CONSTITUTIONAL COURT OF THE RUSSIAN FEDERATION

of April 4, 2006 No. 98-O

According to the claim of limited liability company "Product company "Log" on violation of constitutional rights and freedoms provisions of Item 1 of article 165 of the Tax Code of the Russian Federation

Constitutional court of the Russian Federation as a part of the Chairman V. D. Zorkin, judges N. S. Bondar, G. A. Gadzhiyev, Yu. M. Danilov, L. M. Zharkova, G. A. Zhilin, S. M. Kazantsev, M. I. Kleandrov, A. L. Kononov, L. O. Krasavchikova, S. P. Mavrin, N. V. Melnikov, Yu. D. Rudkin, N. V. Seleznyov, V. G. Strekozov, O. S. Hokhryakova, B. S. Ebzeev, V. G. Yaroslavtsev,

having heard the conclusion of the judge S. M. Kazantsev who was carrying out preliminary studying of the claim of Product Company Lagom LLC based on article 41 of the Federal constitutional Law "About the Constitutional Court of the Russian Federation" in plenary meeting

established:

1. Product Company Lagom LLC in the claim in the Constitutional Court of the Russian Federation disputes constitutionality of Item 1 of article 165 of the Tax Code of the Russian Federation according to which for confirmation of justification of application of the tax rate of 0 percent (or features of the taxation) and the tax deductions it is necessary to submit the documents testimonial of sales of goods specified in this Item to tax authorities, moved in customs regime of export.

As appears from the provided materials, Product Company Lagom LLC was refused by the decision of the deputy manager of inspection of the Ministry of Taxes and Tax Collection of the Russian Federation for Sovetsky administrative district of the city of Omsk of September 22, 2003 compensation of the value added tax because the societies which arrived into the account money from payment by bank drawer of the bills of exchange expressed in the rubles received by society from foreign buyers for goods delivered these buyers under contracts with them, the tax authority did not recognize as export revenue. By the decision of Arbitration Court of the Omsk region left without change of the appeal and cassation instances by Arbitration Courts, in satisfaction told Product Company Lagom LLC of requirements about recognition of the decision of tax authorities by invalid it was refused. The Supreme Arbitration Court of the Russian Federation in Presidium of the Supreme Arbitration Court of the Russian Federation for review according to the procedure of supervision of the decisions made by subordinate Arbitration Courts refused case referral.

According to the applicant, Item 1 of article 165 of the Tax Code of the Russian Federation does not correspond to the Constitution of the Russian Federation, its Articles 1 (part 1), 8 (part 2), 15 (parts 1 and 2), 19 (parts 1 and 2), 35 (parts 1 and 3), 46 (part 1), 55 and 57, as limits possibility of the taxpayer who received payment of goods by the bill of exchange on which payer is the third party - the resident of the Russian Federation to confirm justification of application of rate of 0 percent on the value added tax with the documents confirming in total the fact of real receipt of revenue from the foreign buyer of goods under the contract with it for the account of the taxpayer in the Russian bank than breaks the principles of generality of the taxation, definiteness of regulations of the tax legislation, the right to judicial protection and limits court in possibility of the choice of methods of proof of revenues to the account of the taxpayer of proceeds from sales of goods, exported in customs regime of export. The applicant claims that uncertainty of provisions of Item 1 of article 165 of the Tax Code of the Russian Federation does not allow the taxpayers who received payment by bills of exchange - unlike the taxpayers who received payment of goods in cash, other goods in case of implementation of the foreign trade goods exchange (barter) transactions or without payment according to the procedure, stipulated by the legislation the Russian Federation about currency control and currency exchange control - to exercise the right to application of rate of 0 percent on the value added tax granted to them by the tax legislation that leads to inequality of the taxation and violation of the constitutional principle of equality of all before the law and court.

2. Article 57 of the Constitution of the Russian Federation orders everyone to pay legally established taxes and fees. Chapter 21 of the Tax Code of the Russian Federation establishes obligation of the organizations and individual entrepreneurs to pay the value added tax which is referred to category of the federal taxes.

According to Item 1 of article 164 of the Tax Code of the Russian Federation in case of sales of goods, exported in customs regime of export, on condition of submission to tax authorities of documents, stipulated in Article 165 Tax Code of the Russian Federation, the taxation it is made on the tax rate of 0 percent. In case of sales of goods for export the right of the taxpayer to application of rate of 0 percent on the value added tax arises owing to the conclusion of the transaction with the foreign partner, the obligation on the tax discharge on value added at which is absent. Therefore, the tax amount paid to partners of the taxpayer in the territory of the Russian Federation does not join in the cost of the goods sent for export and shall be compensated to the taxpayer from the budget.

These provisions of the Tax Code of the Russian Federation do not violate constitutional rights of taxpayers, they are directed to stimulation of development of foreign trade turnover and creation of the most advantageous and favorable conditions for making of export transactions.

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