11.09.08

In Russia, a Russian organization can acquire real-estate from a foreign entity on the basis of a sales contract. The Ministry of Finance explains Value-Added-Tax (VAT) obligations in such a situation in a letter dated August 7, 2008 № 03-07-08/196.

The Ministry of Finance considers the Russian organization acquiring the property to be a tax agent. The organization is obligated to calculate and pay VAT. VAT payments can be included as tax deductions in accordance with articles 171, 172, and 174 of the Tax Code.

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