RIPE NCC Mail Archives

[ncc-moscow04] RIPE NCC proposal for Russian registries

  • From: Jochem de Ruig jochem@localhost
  • Date: Tue, 09 Nov 2004 14:25:07 +0100

Dear colleagues,

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.

- Every invoice / payment will be treated as a separate transaction with 3 documents supplied: a "transaction contract", an invoice and an act of acceptance - 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 documents
- Invoices will be sent one month prior to the period (quarter) at issue

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 allowed.

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.

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 language documents. The English version will be authorative in case of ambiguity between the 2 versions.

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.

Kind regards,

Jochem de Ruig
Chief Financial Officer