SECURITIES PROSPECTUS

Capital Tax Evasion" dated June 29, 1999 (the Treaty was validated by Federal Law of theRussian Federation No. 40-FZ dated April 26, 2005);• Agreement between the Government of the Russian Federation and the U.S.Government "On the Avoidance of Double Taxation and the Prevention of Income and CapitalTax Evasion" dated June 17, 1992 (the Agreement was validated by Resolution of the SupremeSoviet of the Russian Federation No. 3702-1 dated October 22, 1992);• Convention between the Government of the Russian Federation and the Government ofthe State of Israel "On the Avoidance of Double Taxation and the Prevention of Income TaxEvasion" dated April 25, 1994 (the Convention was validated by Federal Law of the RussianFederation No. 126-FZ dated October 8, 2000);• Convention between the Government of the Russian Federation and the Government ofthe United Kingdom of Great Britain and Northern Ireland "On the Avoidance of DoubleTaxation and the Prevention of Income and Incremental Property Value Tax Evasion" datedFebruary 15, 1994 (and the exchange of Notes dated February 15, 1994 between the AmbassadorExtraordinary and Plenipotentiary of the United Kingdom of Great Britain and Northern Irelandto the Russian Federation and Deputy Minister of Foreign Affairs of the Russian Federation) (theConvention and the Agreement in the form of exchange of notes for the application of certainprovisions of the Convention were validated by Federal Law No. 65-FZ dated March 19, 1997);• Treaty between the Russian Federation and the Federal Republic of Germany "On thePrevention of Income and Property Double Taxation" dated May 29, 1996 (the Agreement wasvalidated by Federal Law of the Russian Federation No. 158-FZ dated December 18, 1996);• Treaty between the Government of the Russian Federation and the Government of theRepublic of Cyprus "On the Avoidance of Double Taxation of Income and Capital" datedDecember 5, 1998 (the Agreement was validated by Federal Law No. 167-FZ dated July 17,1999).10.8. Description of the Procedure for Taxation of Income from the Issue-Grade Securities (toBe) Placed by JSC IDGC HoldingTaxation of income from the securities issued by JSC IDGC Holding, and operationsinvolving such securitiesThe taxation of income from the issue-grade securities (to be) placed by the issuer isgoverned by the Tax Code of the Russian Federation (hereinafter also referred to as "TC") andother regulations of the Russian Federation adopted in accordance with the Tax Code of theRussian Federation.Tax RatesCorporate EntitiesIndividualsType of income Residents Non-residents Residents Non-residentsIncome from the sale ofsecurities24% (namely:6.5% from thefederal budget;17.5% from thebudget of theconstituententity)20% 13% 30%Dividend income fromRussian entities0%(subparagraph 1of paragraph 315% 9% 15%197