Federation Council simplifies opening Russian bank accounts to pay for gas in rubles

MOSCOW. April 26 (Interfax) - The Federation Council has approved amendments to the Tax Code of the Russian Federation that simplify the procedure for foreign companies to open accounts with Russian credit institutions, as required to implement the procedure to remit payments in rubles for supplied Russian gas.

Consequently, Article 83 of the Tax Code, which regulates the tax accounting of organizations and individuals, has been amended, thereby introducing an alternative means for registering a foreign organization with the tax authorities in order to open an account for said organization in a Russian bank. A corresponding electronic application may be submitted to the tax authorities by a Russian bank in which an account has been opened for a foreign organization, thereby eliminating the necessity of submitting other documents.

Prior to the amendment, it has been required to submit an entire package of documents in order to register a foreign company with the tax authorities.

"The proposed decision will simplify the procedure for a foreign organization to open an account in a Russian bank. This is a relevant and urgent decision in the current conditions regarding the introduction of sanctions against Russia. Among other matters, this will allow foreign organizations to render payments in rubles for their tax obligations, and for obligations regarding foreign trade contracts for supplying natural gas, and so forth," according to the explanatory notes.

President Vladimir Putin at the end of March signed the decree "On the special procedure for foreign buyers to fulfill obligations to Russian suppliers of natural gas".

According to the decree, the government as of April has introduced a new procedure for paying for Russian gas supplies that stipulates the obligatory conversion of the contract currency into rubles through Gazprombank , with special ruble-denominated and foreign-currency-denominated accounts of so-called type "K" being opened for foreign buyers that pay for the gas in the contract currency. Gazprombank in turn sells the foreign currency on the Moscow Exchange and transfers the rubles to Gazprom , at which time the foreign buyers are considered to have fulfilled their obligations to pay for the gas.