[ncc-moscow04] RIPE NCC proposal for Russian registries
From: Jochem de Ruig jochem@localhost
Date: Tue, 09 Nov 2004 14:25:07 +0100
With respect to the discussions on the mailing list and the advice the RIPE
NCC received from its lawyers please find below a short abstract and
proposal dealing with the Standard Service Agreement, the Terms and
Conditions and the RIPE NCC billing for Russian registries.
SUMMARY OF RIPE NCC PROPOSAL
- Every invoice / payment will be treated as a separate transaction with 3
documents supplied: a "transaction contract", an invoice and an act of
- To clarify the VAT issues additional text will be added to the invoice
and the "transaction contract"
- The relevant documents will be made available in Russian as dual language
- Invoices will be sent one month prior to the period (quarter) at issue
SERVICE FEE VS MEMBERSHIP FEE
Pursuant to the Russian civil legislation, it is possible to structure
payments to the RIPE NCC as either membership fees, service fees or a
combination of both. The membership fee and the service fee payments are
treated differently for Russian currency control and tax purposes.
In principle the RIPE NCC charges a yearly service fee. Expenses for the
RIPE NCC service fee should be deductible for corporate income taxes,
although this is not specifically mentioned by Russian tax law. As we
understand it, a membership fee will in principle not be deductible for
corporate income tax and only in exceptional cases will deductibility be
CURRENCY CONTROL LAW
In view of the current pending status of the currency control law (# 173-FZ
dated 10.12.2003) we do not have to address the issues regarding this law.
We do take notice of the developments regarding the currency control law.
So there is currently no restriction for Russian members to make
prepayments to the RIPE NCC.
Regarding the "instruction of the Central bank of the Russian Federation"
(# 117-I dated 15.06.2004), when a Russian registry needs an Import Deal
passport the RIPE NCC can provide its company registration documents.
VALUE ADDED TAXES
Russian VAT is applicable if services are physically rendered in Russia or
are deemed to be rendered in Russia.
There is ambiguity whether the RIPE NCC service fee is taxable for the
Value Added Tax in Russia.
The RIPE NCC proposes to treat every payment as a separate transaction. So
for every payment, a "transaction contract", invoice and act of acceptance
will be presented. The new Standard Service Agreement will be put in place
and will function as a general framework, whilst the "transaction contract"
will contain a specific price and a specific description of the services
provided that is related to the invoice and the subsequent act of acceptance.
To solve the ambiguity regarding Value Added Tax, the following sentence
will be added on the invoice text: "This service fee does not include
Russian VAT which must be added if applicable".
In addition the "transaction contract" will clearly state that the services
are rendered in Amsterdam, the Netherlands. In case it is needed the RIPE
NCC will supply the Dutch "Statement on the tax status of the business" of
the RIPE NCC.
The Standard Service Agreement, the Standard Terms and Conditions, the RIPE
NCC company registration documents, the "transaction contract" and the
additional Act of Acceptance will be made available in Russian as dual
The English version will be authorative in case of ambiguity between the 2
Payments will still have to be made to the RIPE NCC Dutch bank account as
it is not feasible at this point in time for us to open a local Russian
bank account. The invoices, the "transaction contract" and the act of
acceptance will be sent one month in advance of the period (quarter) at issue.
Please let us know what your view is regarding this issue and reply to this
e-mail before the 20 November 2004 so we can start preparations before the
initial quarterly invoices for 2005.
Jochem de Ruig
Chief Financial Officer