Value Added Tax VAT

For 2020, VAT is the second largest source of revenue for the Russian government after taxes on the oil and gas sector.

2023: The leading regions in the Russian Federation are named by the amount of VAT paid

In July 2024, it became known that Moscow and the Moscow region are leading among Russian regions in terms of the volume of value added tax (VAT) transferred to the federal budget. In 2023, Moscow transferred ₽1,83 trillion, and the Moscow region - ₽610,3 billion. This data was published by the Federal Tax Service.

Other regions included in the top 5 also include the Khanty-Mansiysk Autonomous Okrug (₽474,6 billion), the Yamalo-Nenets Autonomous Okrug (₽399,5 billion) and St. Petersburg (₽293,5 billion).

Freepik

However, not all regions can boast positive value-added tax results. The five regions that were among the outsiders for net VAT refunds to businesses included the Murmansk Region (-52.8 billion ₽), the Amur Region (-32.9 billion ₽), the Chukotka Autonomous Okrug (-19.9 billion ₽), the Sakhalin Region (-19 billion ₽) and the Magadan Region (-18.9 billion ₽). This means that the amount of VAT compensation in these regions exceeds the amount of payments received.

Value added tax is an important source of budget revenue, representing a tax on the difference between sales revenue and the cost of producing or purchasing goods, works and services, according to the Federal Internal Revenue Service. VAT is calculated from the entire price of a product, work or service, and then reduced by the tax presented by suppliers, which allows you to pay value added tax only.

Overall, the results of the study show significant differences in the level of economic activity and the ability of regions to generate tax revenues. The leaders of the rating demonstrate high efficiency in collecting VAT, which indicates the significant economic potential of these regions.^[1][2]]

2020

VAT collection plan in the amount of 4.552 trillion rubles

The budget for 2020 includes VAT fees in the amount of 4.552 trillion rubles, and this plan was implemented even despite the collapse of the economy.

The tax benefits that the authorities introduced to support the economy did not apply to VAT, and according to the results of the first half of the year, revenues even increased - by 29 billion rubles, to 2.078 trillion. In August, the Ministry of Finance recorded a slight decline (by 3.7%), which accelerated almost 6 times in September.

The key tax, which is sewn into the cost of all goods and services in the country and provides every fifth ruble of state revenues, unexpectedly sank sharply in September 2020. Its revenues collapsed by 23%, to 411 billion rubles, follows from the operational statistics of the Ministry of Finance.

The media reported on the possible zeroing of VAT for domestic IT companies

The Russian government may nullify VAT for domestic IT companies, the Vedomosti newspaper reported in June 2020, citing two sources familiar with the discussion of the document in the government.

It is noted that such a measure of support for the Ministry of Telecom and Mass Communications can be introduced into the national plan for the development of the economy. It is added that the list of measures is still being discussed and can be changed.

According to the newspaper, the representative of the Ministry of Telecom and Mass Communications declined to comment, and the press service of the government said that "IT support measures have been sent for study."

"Among other possible measures to support the IT industry is a reduction in the upper bar of income tax for high-tech companies from 20 to 12%, (for regions - up to 2%), Vedomosti interlocutors list. According to them, we are also talking about an indefinite extension of the preferential regime for paying insurance premiums (now for IT companies their rate is 14%), "the message says.

• Main article: Benefits and support measures for IT companies in Russia
• Putin announced a number of instructions to support the IT industry

2018

VAT charges increased by 16.4% to RUB 3.6 trillion

At the end of 2018, the consolidated budget of Russia received 3.6 trillion rubles. (+ 16.4%) of value added tax (VAT)^[3]

The State Duma adopted a law on raising VAT to 20%

The State Duma adopted in the third, final reading a law^[4], providing for an increase in value added tax (VAT) to 20% from 18%, as well as new tariffs for social contributions. The bill was initiated by the government, the changes come into force on January 1, 2019.

VAT (value added tax) in Europe

According to government estimates, an increase in VAT will bring the federal budget an additional 620 billion rubles a year.

VAT benefits are saved. We are talking about reduced VAT rates in the amount of 10% for social goods: food products (with the exception of delicatessen), children's goods, periodicals and book products related to education, science and culture, as well as medicines and medical products. Zero VAT rates are valid for domestic interregional air transportation.

The law gives manufacturers the right not to restore VAT deducted for goods (works, services) purchased through subsidies received in 2018 to compensate for part of the costs associated with the release and support of warranty obligations in relation to wheeled vehicles, high-performance self-propelled and trailed equipment, including agricultural equipment.

This will lead to losses in federal budget revenues in the amount of 27 billion rubles, according to the financial and economic justification for the document.

Insurance premiums

The law also provides for a decrease from January 1, 2019 in the total rate of insurance contributions to state extra-budgetary funds to 30% from 34% and the establishment of a rate of insurance contributions to the Pension Fund in the amount of 22%.

"Establishing the rate of insurance premiums for compulsory pension insurance in relation to the main category of payers in the amount of 22% (instead of the generally established tariff of 26%) within the established base for calculating insurance premiums for compulsory pension insurance will lead in 2021 to a decrease in the volume of premiums for compulsory pension insurance in the amount of 948,22 billion rubles, in 2022 in the amount of 1 trillion 16,27 billion rubles, in 2023 in the amount of 1 trillion 86,52 billion rubles, in 2024 in the amount of 1 trillion 171.41 billion rubles, "the financial and economic justification says.

The lack of funds will have to be covered from the budget. As a result, the transfer from the federal budget to the Pension Fund of the Russian Federation will grow by 502.6 billion rubles in 2019 and by 554.1 billion rubles in 2020, the authors of the document calculated.

Now the total rate of insurance premiums for employers is 30% (of which 22% are sent to the FIU, 2.9% and 5.1% to the FSS and MHIF). The rate of 30% is preferential: according to previously adopted designs, its effect ceases in 2021, which would increase the burden on employers to 34%. Thus, having set a new tariff of 30%, the Russian government proposes to abandon the increase in this rate in the future.

Amendments to the second reading

By the second reading of the document, amendments were approved that extend for six years - until January 1, 2025 - the effect of the zero VAT rate for passenger air travel to and from Crimea. The current preferential rate is applicable until the end of 2018.

Also, the zero VAT rate is set for domestic air transportation services for passengers and baggage, provided that the departure point or arrival point is located on the territory of the Far Eastern Federal District (Far Eastern Federal District) - this preferential rate will also be valid until January 1, 2025. "For unification, we keep the same privilege for Kaliningrad," said Andrei Makarov, head of the State Duma Committee on Budget and Taxes.

For 2019-2024, preferential rates of insurance premiums for NGOs applying a simplified taxation system and engaged in social services for citizens, scientific research and development, education, health care, culture, art and mass sports (with the exception of professional), as well as for charitable organizations are also extended. Rates of contributions for compulsory pension insurance will be 20%, for compulsory social insurance in case of temporary disability and in connection with motherhood, for compulsory medical insurance - 0%.

The law also clarifies the procedure for determining the tax base when selling goods, works or services, taking into account subsidies provided by federal or regional budgets in connection with the application by the taxpayer of discounts on the price of these goods, works or services.

The document provides for the possibility of deducting from the tax base the amount of VAT on goods purchased through subsidies received before December 31, 2018. "This is very important for agricultural producers and organizations implementing projects for the construction and reconstruction of roads," said Makarov, head of the budget committee.

From January 1, state-owned companies will not be able to include VAT on individual purchases in their costs and include them in the cost of goods.

The government decided to raise the VAT rate to 20%

The value added tax (VAT) rate in Russia will be raised to 20% (from 18%), said Prime Minister Dmitry Medvedev, RBC correspondent Medvedev^[5]

VAT, which is transferred to the final prices of all goods and services, is the cornerstone of the Russian tax and budgetary system. In 2017, the federal treasury collected 5.1 trillion rubles. VAT, or 34% of all budget revenues (.[1] xls ). This year, the government expects to collect at the expense of VAT on domestic and imported goods and services almost 5.8 trillion rubles.

The total VAT rate will be increased to 20% from January 1, 2019, said First Deputy Prime Minister and Minister of Finance Anton Siluanov. According to him, this measure will give the budget an additional 600 billion rubles. annually starting next year. The funds will help fund "national development goals" identified by a presidential decree in May, he said.

The government is preparing a package of measures to "compensate" for the VAT increase.

• First, business opportunities to expedite value added tax refunds will expand. Now the Tax Code provides the right to an accelerated method of its compensation if the company paid at least 7 billion rubles. VAT, excise taxes, income and mining taxes in aggregate for the three previous years; this threshold will be reduced to 2 billion rubles.
• Secondly, the timing of office inspections with VAT refunds will be reduced.
• Thirdly, the government will abolish the tax on movable property (business has repeatedly called for it to be abolished, calling it a "modernization tax"). Finally, the tariff on employers' contributions to compulsory pension insurance of workers will be "indefinitely" fixed at 22% (and 10% when the maximum base for contributions is reached), Siluanov said. According to the current legislation, the tariff for OPS should return to the level of 26% from 2021.

Vedomosti: the government is discussing raising VAT to 20%

The government is discussing the possibility of raising the value added tax from 18 to 20%. The increase, VAT they write at the end of May 2018, Sheets"" is considered as one of the options to get a part of the 8 trillion rubles needed to implement the new "May decree."

According to the interlocutors of the publication, an increase in VAT will give the budget an additional about two trillion rubles over six years.

Another two trillion rubles for the "May decree" is expected to give the budget an announced increase in the retirement age, two sources told the newspaper. The remaining four trillion rubles will bring loans (about three trillion rubles) and the reform of taxation of the oil industry (about one trillion rubles).

Sources of the publication stressed that we are not talking about decisions already made. Everything changes very quickly and constantly, said one of the interlocutors of Vedomosti.

2013: Issue VAT online

On January 1, 2014, Federal Law No. 134-FZ of June 28, 2013 comes into force. It obliges to submit VAT returns exclusively via the Internet for the first quarter of 2014. This applies to enterprises of all forms of ownership and number, as well as individual entrepreneurs.

Who must submit VAT returns

Organizations that have issued an invoice to their counterparty (voluntarily or by mistake) are obliged to submit the VAT declaration. It happens that the company works on "simplification" and issues an invoice with VAT. This is allowed by law, but obliges you to pay VAT and return the declaration. And all firms on the general tax regime pass VAT by default.

What needs to be done now

According to the Office of the Federal Tax Service of St. Petersburg, there are more than forty thousand organizations and individual entrepreneurs in the city who prefer electronic paper declarations. In total, there are 13 special communication operators in St. Petersburg. Experts fear that confusion may arise during the reporting period associated with the entry into force of the new law. Therefore, it is worth thinking about connecting now in order to have time to get used to new technologies.

Why do telecom operators need

Internet reporting first appeared in 2002. And by 2013 it had changed beyond recognition. Today, telecom operators give tremendous opportunities:

Sending reports around the clock even on holidays and weekends;

• - Automatic update of all forms and built-in error checking;
• - Sending to any region of Russia, receiving notifications and reference information;
• - Reconciliation of calculations with the budget;
• - Verification of counterparties on the basis of the Unified State Register of Legal Entities and arbitration cases;
• - Assessment of tax audit risk and office audit of reports;
• - Financial and tax analysis.

And more. You get a powerful tool for solving a wide range of management and accounting tasks.

Alternative ways to submit reports via the Internet

Is the only way to submit reporting via the Internet - to purchase software from a telecom operator? No, there are others. Here they are.

1. You can purchase an electronic signature from any trusted Certification Center and submit your report through the website www.nalog.ru. The advantages of this method are a low price (about 2000 rubles per year), and the choice of certification cents is much wider than operators. Cons - you can only submit a report. You will not be able to request a reconciliation report, find out the amount of debt and receive additional services, as well as report to the FIU.
2. You can submit the report directly from 1C:Enterprise 8 system program. The obvious advantages are that you do not need to install third-party programs. Everything happens inside the usual 1C. Disadvantages - not all companies provide reports to the FIU.
3. Finally, you can contact any accounting firm (we also call them "Authorized Accounting") and ask to submit a report for you. At the same time, it is imperative to issue a power of attorney of the established sample and take it to the tax office before submitting the report. Pros - you don't need to buy anything, the cost of sending one report is within 200 rubles. The cons are the same queues, you need to spend time on the road, third parties see your numbers in the declaration.

By the way, many modern accounting programs and services also allow you to send reports via the Internet.

Violation of the method of submission of the report

The new version of paragraph 1 of Article 119 of the Tax Code of the Russian Federation determines that since 2014, both taxpayers and tax agents can be fined for late delivery of the return (so far this applies to taxpayers). The amount of the fine is 200 rubles. The amount is quite ridiculous, but there is a risk that the declaration will be considered unapproved.

What if today you are denied the reception of a report on paper

Such a refusal is illegal and you can safely defend your case. The law clearly spells out the timing of the entry into force. But keep in mind: tax inspectors will be more loyal to you if you submit reports via the Internet. Verified.

See also

• Automated NDS-2 monitoring system (ASK NDS-2)
• Automated VAT refund control system (ACS VAT)

• Taxes in Russia

• IP (individual entrepreneur)
• Russian economy
• Benefits and support measures for IT companies in Russia
• Optimization (reduction) of taxes

Notes