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Gaetano Cavalieri: Diamond producers no longer insisting that clients purchase what they are offered

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Worth of gold and diamonds

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28 september 2020

Russia’s Duma is offered to change the basis for calculating the severance tax levied from diamond mining

22 september 2020
Image credit: DWilliams (Pixabay)

(INTERFAX.RU) - The Russian government has submitted a bill to the State Duma offering a new procedure for assessing the value of mined precious stones used to calculate the severance tax levied from mining companies. It is proposed to estimate their value based on their sales prices, and not on the current way of their initial assessment based on the price lists of the country’s Ministry of Finance.
Currently, the severance tax for mining diamonds, emeralds, rubies, sapphires, pearls and other precious stones is 8%. It is calculated based on the price lists of the Ministry of Finance. The ministry calculates prices taking into consideration the proposals coming from Gokhran, Almazyuvelirexport and mining companies. The price list is revised in case prices change by more than 10% and stay at that level for 90 days.
The introduced bill, No. 1022670-7 proposes to estimate the value of mined precious stones based on the sales prices gained by a taxpayer during the tax period (excluding VAT), but not lower than the price lists of the Ministry of Finance.
“The assessment of the mined precious stones value shall be made on the basis of taxpayers' prevailing sales prices in a relevant tax period (and in their absence, on the basis of the highest prices in the nearest of the twelve previous tax periods) for mined precious stones excluding the value added tax, but not lower than their initial assessment carried out in accordance with the legislation of Russia on precious metals and precious stones,” says the bill.
However, the amendments, in contrast to the explanatory note, do not mention that the sale price used for calculating the severance tax for diamonds is to be reduced by taxpayers’ expenses for their delivery to the recipient, as is done, for example, in the case of precious metals.
If adopted, the law will enter into force on January 1, 2021.