changes in vat in russia - accountor
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Tax & Law Updates
Accountor is going to start publishing regular updates on Russian Tax Law, alongside other changes
in legislation that may directly or indirectly affect companies operating in Russia.
Today we’re discussing recent changes in VAT (Value Added Tax) regulations in Russia:
VAT deduction is possible before the transfer of ownership
The buyer has the right to deduct the VAT from an invoice that the seller completed before the transfer of
ownership of the goods. This conclusion is found in a letter from the Russian Finance Ministry.
Under the contract, the ownership right is transferred to the buyer upon acceptance of the goods at his
warehouse. An invoice is usually drawn up before this - when shipping goods to the carrier. If the invoice is
issued before the ownership is transferred to the buyer, a question remains: is it possible to claim tax
deductions?
Specialists of the Ministry of Finance confirmed that the buyer is entitled to claim a deduction. After all, the
supplier has to invoice within five days after delivery (p. 3 of Art. 168 of the Tax Code), and the date of
shipment is the date when the purchase invoice is drawn up by the buyer and the consignment note by the
carrier delivering the goods – It’s dependent on which is drawn up first. Since the invoice was issued correctly,
there should be no problem with deductions.
Legislation Act: A Letter from Ministry of Finance of Russia dated December, 30 2014 № 03-07-11/68585
Taking deductions from one invoice during several periods
Deducting VAT on the basis of invoices over different tax periods for three years after the registration of goods
(works, services), except fixed assets, equipment to be installed and (or) intangible assets, does not contradict
the Code standards.
Legislation Act: A Letter from Ministry of Finance dated April, 9 2015 № 03-07-11/20293
The three-year period for the VAT deduction is not increased at the time of tax
declaration submission
A company can only claim the VAT deduction within three years of the end of the quarter in which they had the
right to do so. This period will not be extended by 25 days, despite intention to submit the VAT declaration.
Legislation Act: Constitutional Court of the Russian Federation (decision dated 24.03.2015 № 540-О).
How to deduct VAT before the end of construction To deduct VAT on construction and installation works, we need an invoice and the relevant primary
documents. Claiming the deduction is possible only after putting these documents on record. Moreover,
account 08 "Investments into fixed assets" also needs to be submitted. When checking, tax specialists will take
into account the conditions of the contracts signed, procedure of settlements and the results of the work
performed.
Legislation Act: Letter from Federal Tax Service 20.03.2015 № GD-4-3/4428@).
We are ready to handle tax related processes in your company. Accountor is the leading provider of
tax advisory services in Russia for companies both entering, and already operating in the Russian
market. We have been successfully operating since 1992.
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