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Full 20% VAT To Be Charged On Goods Imported To Russia From Eurasian Economic Union
If goods imported to Russia from Eurasian Economic Union counties are accounted for after January 01, 2019, VAT must be charged at the new rate of 20%. This is according to Russian Ministry of Finance Letter No. 03-05-05-01 / 95999 of February 28, 2019.
The Ministry argues that, Paragraph 14 of Section III of the Protocol on the Procedure for Levying Indirect Taxes and the Control Mechanism for Their Payment when Exporting and Importing Goods, Performing Work, and Providing Services, which is Annex No. 18 to the Treaty on the Eurasian Economic Union of May 29, 2014, establishes that VAT on imported goods from the territory of one EAEU member state to the territory of another EAEU member state, is determined as of the date those imported goods were recorded in the company's accounting. Additionally, the recognition of the imported goods in company accounting should be recognized on the basis of source documents. Accordingly, based on the clarifications provided, the tax rate should be determined not by on the date of shipment, but rather the date of the goods were accepted and recorded into the accounting. Thus, if the supplier shipped the goods, for example, in December 2018, and the Russian buyer accepted them into company accounting in February 2019, then the goods are subject to 20% VAT.
Translated by Alinga Consulting Group.
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