VAT and Profit Tax on Real Estate Subleases to Russian Organizations by Foreign Organizations
If a Russian company subleases property from a foreign organization, a tax agent is obliged to calculate and pay the appropriate amount of VAT. Under the provisions of the Tax Code, the place of implementation of services for renting of immovable property is determined based on the location of the property.
This was clarified by the Russian Ministry of Finance in Letter from 18.11.2016 #03-07-08 / 67984. The argument is based on para. 2, Art. 615 of the RF RK.
In addition, under the provisions of para. 1, Art. 309 of the Tax Code, the income of a resident of a foreign state from sources in the Russian Federation on the sublease of real estate is subject to Russian income tax at a rate of 20%. A Russian organization must act as the tax agent.
Translated by Alinga Consulting Group.
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