Russia Tax Agency Issues Guidance on Reduced VAT Rates for Organizations, Entrepreneurs

The Russian Federal Tax Service March 20 issued a guidance on the application of reduced VAT rates for organizations and entrepreneurs. The guidance clarifies that: 1) the reduced VAT rates of 5 percent and 7 percent must be applied for three consecutive tax years; 2) use of the reduced rates starts from the period in which the first VAT declaration with the rates is filed, and taxpayers can’t switch to the standard 20 percent VAT rate during this period; 3) early termination is available to taxpayers under the simplified tax system that receive automatic VAT exemptions for income below 60 ...