18.07.05

The Tax Code of the Russian Federation has been amended, creating a new payment system and administration for VAT.  In line with this, we can expect the following future changes:

1.        Starting January 1, 2007 in barter transactions VAT is to be paid only in cash.

2.        VAT refund processing in cases of capital construction will be expedited starting January, 1 2007.

3.        Starting January 1, 2006 the only method of VAT payment will be based on accrual.

4.        The term “advance payment” is going to be replaced by “partial payment” in VAT legislation. VAT will be paid according to “partial payments.”

5.        At the beginning of 2007, it is hoped that VAT on export operations would be refunded based on an “application” method only.

6.        VAT paid on property transferred as payment of charter capital will be refundable.

7.        In transitioning from Simplified Taxation or even from Complex Taxation on Imputed Income to regular taxation, VAT refunds under previous systems must be returned to the state.