The agreement between the Government of the Russian Federation and the Government of Georgia on the principles of collection of indirect taxes during the exporting and commodity import (works, services)
of July 10, 2001
The government of the Russian Federation and the Government of Georgia (The Executive authority of Georgia) which are hereinafter referred to as with the Parties
aiming at further deepening of economic integration, creation, equal opportunities for business entities and to establishment of conditions of fair competition,
recognizing the commonly accepted regulations and rules of international trade,
agreed as follows:
1. For the purposes of this agreement the following terms are used:
"indirect taxes" - the value added tax and excise (the excise tax or the excise duty);
"zero rate" - rate of indirect taxes on goods (works, services), equal to zero percent that is equivalent to release from the taxation and compensation of the value added tax and excises on the material resources used in case of production and sales of goods (rendering services) and means for the taxpayer the right to offsetting of the paid taxes on account of the forthcoming payments or their compensation;
"country of destination" - the state on which customs area goods are imported for consumption;
"business entities" are taxpayers of the states of the Parties.
Subject of this agreement is establishment of the principle of collection of indirect taxes when implementing the foreign trade transactions between business entities of the states of the Parties.
The goods placed under customs regime of export, which are exported from customs area of the state of one Party and imported on customs area of the state of other Party are assessed with indirect taxes on zero rate. This rule does not extend to natural gas and oil, including stable gas condensate.
The states of one Party imported on customs area goods which are exported from customs area of the state of other Party are assessed with indirect taxes in the country of destination according to its national legal system.
1. The procedure for application of indirect taxes in case of performance of works, rendering services is drawn up by the separate protocol. Before enforcement of this protocol of work (service) are assessed with indirect taxes according to the legislation of the states of the Parties, except for the following works (services):
a) works (service) in transportation and servicing of the goods which are exported from customs area of the state of one Party on customs area of the state of other Party including services in forwarding, loading, unloading and overload;
b) works (service) in transportation and servicing of goods in transit provided that the points of departure or purposes of goods are located in the territory of the states of the Parties, including services in their forwarding, loading, unloading and overload;
c) services in transportation of passengers and baggage from customs area of the state of one Party on customs area of the state of other Party in the direct and opposite direction.
2. Works (service) listed in subitems "a", "b" and "v" of Item 1 of this Article are assessed with the value added tax on zero rate in the state which taxpayers render such works (services), in case of confirmation of the fact of their rendering according to the legislation of the states of the Parties.
1. For the purpose of control of movement of goods, accounting and exchange of information of the Party will use the Commodity nomenclature of foreign economic activity applied by the Parties.
2. Indirect taxes on the goods imported on customs areas of the states of the Parties levy customs authorities of the country of destination or its tax authorities.
1. This agreement does not interfere with the right of the Parties according to the conventional principles and rules of international law to apply necessary measures to protection of interests of internal producers and the national market.
2. Disagreements in connection with interpretation or application of this agreement of the Party will solve by negotiations.
3. The parties will hold if necessary consultations for assessment of the course of implementation of this agreement and feasibility of introduction in it of changes and amendments.
The parties in case of mutual consent make to this agreement necessary additions and changes which are drawn up by the separate protocols which are integral part of the Agreement.
1. This agreement becomes effective from 1 date following after month of accomplishment by the Parties of necessary interstate procedures.
2. This agreement is signed for a period of five years and automatically prolonged for the subsequent five-year terms if any of the Parties does not notify in writing through diplomatic channels at least in 6 months prior to the expiration of the next term on the intention to stop its action.
It is made in the city of Moscow on July 10, 2001 in two authentic copies, everyone in the Russian and Georgian languages, and both texts are equally authoritative.
For the Government
/ signature /
For the Government
/ signature /
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