21.03.08

Expenses from renting housing on business trips, including the VAT associated with it, can be deducted from the profit tax base if confirmed by bills or hotel receipts.

If the hotel service was provided on the territory of the EU and if VAT amount was reimbursed by foreign tax authorities according to EU legislation, that amount should then be declared as taxable extraordinary income for the period when it was received.  This is according to Russia’s Ministry of Finance (Letter # 03-03-06/4/8 from February 14, 2008).

The Ministry of Finance also cautions that during an audit tax officials may request the original documents which were submitted by taxpayer to foreign tax authorities (as confirmation of justified VAT reimbursement). In this case, according to article 93 of the TC, the taxpayer must present certified copies of the original documents, confirming the housing rental in a foreign state.

Therefore, if a company has parted with original documents for the purpose of VAT reimbursement, it must retain the copies.

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