In connection with the adoption of Federal Law No.238-FZ dated July 21, 2014 “On introduction of amendments to Part 2 Chapter 21 of the Tax Code of the Russian Federation (the “Tax Code”) and Article 12 of Federal Law ‘On introduction of amendments to certain legislative acts of the Russian Federation pertaining to combatting illegal financial transactions’” (the “Law”), starting October 1, 2014, substantial changes to existing regulation in the field of taxation will come into effect.

1. The new wording of Subclause 1 Clause 3  Article 169 of the Tax Code includes the expansion of the list of transactions with respect to which parties, per their written consent,  will be exempt from issuing commercial invoices (‘schet-faktura’), keeping records of received and issued commercial invoices, and books of purchases  and sales.

Previously, taxpayers were exempt from this obligation only with respect to transactions that are not subject to the Value Added Tax (VAT) in accordance with Article 149 of the Tax Code.

Starting on October 1, 2014, the sale of goods (works, services) or property rights to non-VAT taxpayers and to those exempt from taxpayer duties related to the calculation and payment of VAT also does not require commercial invoices, registers, books of purchases and sales (Subclause a Clause 3 Article 1 of the Law).

2. Rules were clarified for deducting the amount of VAT, calculated based on the sums of advance payments in the course of transfer of property rights.

In accordance with the changes introduced by Clause 6 Article 172 of the Tax Code, taxpayers are entitled to deduct the amount of VAT, which is calculated based on the sum of advance payments, starting on the date of transfer of property rights in the amount of the tax which is calculated based on the value of property rights, against which the amount of the previously received payments or partial payments will be offset in compliance with contractual terms (if applicable) (Clause 6 Article 1 of the Law).

3. The list of entities that are required to  keep logs of received and issued commercial invoices was supplemented in  accordance with Clause 3.1 Article 169 of the Tax Code.

In accordance with the introduced amendments, entities performing the functions of a developer, as well as entities acting on the basis of a freight forwarding contract, are required to keep a log of received and issued commercial invoices (Subclause b Clause 3 Article 1 of the Law).

It is important to note that this change is to take effect on January 1, 2015.

Additional notes

Should any questions arise in connection with the above or if you need any additional materials, please contact Dmitry Churin or Elena Lepneva, St. Petersburg Office of Capital Legal Services.

This Information letter keeps the clients of Capital Legal Services and other interested parties abreast of information that may, to any extent, affect their activity or cater to their particular interests. The opinions and commentaries expressed in this information letter shall not be deemed as legal opinions and do not cancel the need to obtain legal advice or legal opinion on separate issues.

www.cls.ru