10.12.08

The Federation Council approved a cancellation of VAT on sales of used cars over three years old purchased by car dealers from individuals. The senators voted for changes to be applied to Articles 154 and 164 of the Tax Code of the RF.

According to amendments, for sales of cars previously bought from individuals for future resale, the VAT tax base is to be calculated as difference between final price (with tax) and initial purchasing price. This means that resellers will pay VAT only on the difference between these two prices. Currently, the VAT tax base is calculated based on the "market price" of the car (tax excluded). The amendments will come into force in the beginning of 2009.

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Source: Российский налоговый портал