08.09.06

The Russian Ministry of Finance issued letter No. 03-04-17/1/07, dated August 1, 2006, which clarifies the procedure for imposing value added tax on services to non-residents of the Russian Federation. The officials explained that value added tax is not levied on services provided to organizations operating outside the Russian Federation, as such services are not rendered within the country's borders. The purchaser of the services must be a non-resident or an organization which does not have a representative or branch office in Russia. It is necessary to present the contracts concluded with foreign or Russian entities to tax assessors as supporting documents, along with any other documents verifying the provision of services.