VAT stands for value added tax. It is considered to be payers as individual entrepreneurs, organizations, and persons who have been recognized as VAT payers due to the crossing of goods through the customs of the Russian Federation.
All taxpayers should be registered with the authorized body (tax office).
Foreign branches or representative offices (organizations) that have several of their divisions on the territory of the Russian Federation can independently choose one specific one from the location of which they will be registered (will be registered with the tax inspectorate) and will already file declarations and pay tax on all other units located in Russia. Foreign organizations are obliged to inform the tax authorities in writing of their choice of the location of all their organizations that are located in our country.
VAT rate in the Russian Federation
The VAT rate may not be paid in case of exemption from tax assessment and payment, subject to the following conditions - if for three consecutive months the total income from services, work or sales of goods (but excluding tax) does not exceed a total of 2 million rubles .
The following operations are taxable:
- when transferring property rights, performing any services, works, as well as selling goods;
- during the transfer of goods on the Russian territory, the provision of services, as well as the performance of any work for personal needs, the costs of which are not deductible when income tax is calculated;
- when performing construction and installation works for their own use;
- when importing goods to the customs of the Russian Federation.
The VAT rate does not apply to certain types of transactions that are not recognized as taxable.
When calculating VAT, the established tax period is a quarter; this also applies to taxpayers who act as tax agents.
The 2012 VAT rate remains 0%, 10%, and 18%.
At 0%, goods imported in the customs regime of export are taxed, placed in the free customs zone under the customs regime, as well as services and works that are directly related to the sale and production of such goods. Also, the service with transportation of both passengers and baggage is taxed at a rate of 0%, but if the departure or destination points of passengers are located outside the territory of the Russian Federation and the transportation is arranged according to uniform transportation documents of an international standard.
A 0% VAT rate is present for work, goods and services in the field of space activities. It also applies to goods, services or work of official use of foreign diplomatic missions and equivalent to them; for the construction of ships that are to be registered in the international Russian registry. A complete list of goods subject to VAT at a rate of 0% can be found in the first paragraph of Article 164 of the Tax Code of the Russian Federation.
The 10% VAT rate in Russia applies to food, children’s goods, periodicals, books, books related to culture, science, education, as well as medical products of both domestic and foreign production. A more complete list at a rate of 10% can be studied in the second paragraph of Art. 164 Tax Code of Russia.
In all other cases, the rate of 18% is applied.
The VAT rate of 10% and 18% is applied when importing goods to Russian customs. In cases where, according to the tax code, the tax amount must be determined by calculation, then it is determined by the percentage of the tax rate to the tax base, taken for 100 and increased by the corresponding size of the tax rate.