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:

Article 1 General determinations

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.

Article 2 Subject of the agreement

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 article 3 Principle of the Taxation in case of commodity exportation

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.

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