In 2023, ten Russian regions will have negative VAT balances
author
Fedor Petrik

In 2023, ten Russian regions will have negative VAT balances

14.03.2024

source

According to the Federal Tax Service, the federal budget for the past year did not receive revenues on value added tax from ten regions of Russia: the amount of tax deductions in them exceeded the amount of accruals. 

The excess of VAT deductions over the amount of VAT payable in certain regions can be explained by the following factors:

  • Border location of the above regions with a significant share of export proceeds subject to VAT at 0%.
  • Active implementation of large investment projects in these regions, within the framework of which companies incur expenses for the construction of expensive capital construction projects and do not receive VATable revenue. It will be received only after completion of construction and commencement of commercial operation of the relevant facilities.

Fyodor noted that the use of illegal VAT optimization schemes cannot be attributed to significant factors that lead to a net VAT refund in certain regions, as such schemes are effectively detected by the tax authorities with the help of a special automated control system ASK VAT.

Fyodor Petrik, Senior Tax Consultant at Tax Compliance, additionally commented on the current situation in an article by RBC. 


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