START-ALLIANCE LLC. PROVIDES PROFESSIONAL VALUATION SERVICES IN REGARD TO MACHINERY AND EQUIPMENT IMPORTED INTO RUSSIA AS CONTRIBUTION TO THE COMPANY'S CHARTER FUND

According to the current Russian legislation, machinery and equipment, when imported by a foreign investor as contribution to the shareholders’ capital of a Russian legal entity, are exempt of import duties an VAT. Decree of the Russian Government No. 883 dated 23 July 1996 “On Customs Duty and VAT Concessions for the Goods Imported by Foreign Investors as Contribution to the Charter Capital of Legal Entities with Foreign Investments” stipulates the following:

1. To establish that the goods imported into the territory of the Russian Federation as a contribution of a foreign founder to the charter capital shall be exempt from customs duties, provided that these goods:

• are not subject to excise taxes;
• are classified as fixed assets;
• are imported within the time limits established by constituent documents for forming the company’s charter capital”.

In its turn, exemption from VAT is stated in the Russian Tax Code, Chapter 21 “Value-Added Tax”, Article 150 “Importation of Goods Free (Exempt) From Taxation into the Territory of the Russian Federation”.This Article reads as follows: "Manufacturing equipment, components and spare parts thereto imported into the customs territory of the Russian Federation as a contribution to the authorized (share) capital of entities … shall be free (exempt) from taxes.”

It should be emphasized that this benefit exclusively applies to the machinery and equipment classified as fixed assets (machines, processing lines, etc.). To qualify for this benefit for the goods crossing the Russian customs border, one must submit constituent documents registered with an authorized government body and valuation report for the subject equipment, issued by an independent valuer. The requirement for valuation of imported machinery and equipment also follows from provisions of the Federal Laws “On Limited Liability Companies” and “On Joint-Stock Companies”, which establish that contributions to company’s charter capital (fund) in the form of non-monetary asset are subject to obligatory valuation.