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LETTER OF THE FEDERAL TAX SERVICE OF THE RUSSIAN FEDERATION

of August 30, 2013 No. AC-4-3/15780 @

About determination of type of the extracted mineral in case of production of precious metals

The Federal Tax Service in connection with addresses of taxpayers and tax authorities on legitimacy of taxation on mining (further - MET) the precious metals (silver) received as a result of the performed process of refining of the concentrate containing precious metals (alloyed gold) reports the following.

According to article 336 of the Tax Code of the Russian Federation (further - the Tax code), the taxation object of MET the minerals extracted from subsoil in the territory of the Russian Federation on the subsoil plot provided to the taxpayer in use in accordance with the legislation of the Russian Federation are recognized.

At the same time the extracted mineral products of the mining industry and development of pits containing in actually got (extracted) from subsoil mineral raw materials, the first on the quality corresponding to one of the standards listed in this regulation of the Tax code are recognized as provisions of Item 1 of article 337 of the Tax Code.

As article 1 of the Federal Law of 26.03.1998 No. 41-FZ "About precious metals and gemstones" (further - the Federal Law No. 41-FZ) production of precious metals extraction of precious metals from radical (ore), loose and technogenic fields with receipt of the concentrates and other semi-products containing precious metals is recognized.

Similar determination of activities for production of ores and sands of precious metals is this as well in the All-Russian Classifier of Economic Activities OK 029-2001 (subsection SV "Mining, except Fuel and Energy" code 13.20. 41).

Provisions state standard specifications P 52793-2007 "Metals precious. Terms and determinations" ores and sands of precious metals are determined as the mineral raw materials containing precious metal.

Thus, from set of the concept of production of precious metals this by the Federal Law No. 41-FZ and classification of this type of activity in OK 029-2001, follows that obtaining from the specified mineral raw materials of the concentrates containing precious metals is considered as integral part of process of production of these precious metals and, therefore, treats directly type of mining works.

Based on the concept of production of precious metals this in the Federal Law No. 41-FZ, the legislator in the subitem 13 of Item 2 of article 337 of the Tax Code to subjects to taxation of MET (according to Item 1 of article 336 of the Tax Code) carries such type of mineral as the concentrates and other semi-products received in case of extraction of these metals from radical (ore) containing precious metals (and also loose and technogenic) fields.

The concentrate containing precious metals in Item 7 of the above-named GOST P 52793-2007 is determined as the product of enrichment of the mineral raw materials containing precious metals suitable for conversion in which content of precious metal is higher, than in initial raw materials.

At the same time in this Item state standard specification it is specified that:

- the concentrate may contain non-ferrous and precious metals in different ratios;

- names of separate types of concentrates can reflect availability of the main precious metal in them, for example "gold-bearing concentrate".

The specified gold-bearing concentrates are positioned in the Section C "Products and services of the mining industry and development of pits" of the All-Russian Classifier of Economic Activities, products and services OK 004-93 in group 1323000 "Ores and concentrates of precious metals" on codes 1323102 - 1323104, including by code 1323104 - gold alloyed, representing (according to provisions state standard specifications P 52793-2007) gold alloy with chemical elements which composition is established by the regulating document.

TU 117-2-7-75 specifications "Gold alloyed. Specifications" it is also determined that gold alloyed represents gold alloy with impurity of other metals (including with silver).

According to the above, gold alloyed represents type of the extracted mineral and, respectively, subject to taxation of MET as is:

a) according to provisions of Item 1 of article 337 of the Tax Code - products of the mining industry and development of pits containing in actually got (extracted) from subsoil mineral raw materials (i.e. in the ore and sands containing precious metals), the first on the quality of the organization subsoil user corresponding to specifications (TU 117-2-7-75);

b) according to provisions of the subitem 13 of Item 2 of article 337 of the Tax Code - the gold-bearing concentrate received in case of extraction of precious metals from the radical (ore) field.

Provisions of Item 1 of article 338 of the Tax Code provide taxation of MET as well the useful components taken from subsoil in passing in case of production of the main mineral.

Thus, unambiguously follows from literal interpretation of this regulation of the Tax code that as subject to taxation of MET the minerals which are in passing extracted (i.e. according to provisions of Item 1 of article 337 of the Tax Code, actually got) from subsoil in the course of implementation of production of the main mineral are considered (and consequently, and in the course of receipt of gold-bearing concentrate).

Therefore, the silver which is in passing extracted (got) of subsoil during gold mining process implementation (including and process of receipt of gold-bearing concentrate) is subject to taxation of MET.

If silver (for example, in view of absence at the subsoil user of technical capabilities for its extraction from the concentrate containing precious metals) was received in the course of implementation of refining of this concentrate, it is necessary to be guided by the following.

According to provisions of the Operating procedure of the organizations performing refining of precious metals, No. approved by the order of the Government of the Russian Federation of 17.08.1998 972, in case of acceptance on refining of the concentrates containing precious metals by refinery their control approbation is performed. If according to this approbation the share of chemically net metal in handed over by the taxpayer on refining (i.e. entrance) concentrate is determined in other size, than according to the taxpayer, then the quantity of concentrate is recalculated by the last taking into account data of refinery.

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