Taxes on Import into Russia: VAT and Excises

 

March 31, 2024

BRACE Law Firm ©

 

Importing goods into Russia is a significant component of foreign trade, allowing consumer demand to be met with goods from other states. The import of goods into the Russian Federation is subject to taxes depending on various indicators, such as the country of origin, type of goods, purpose, etc. These taxes help regulate trade turnover and replenish the state budget.

As a reminder, in accordance with the EAEU Customs Code, the import of goods into the EAEU customs territory refers to actions related to crossing the EAEU customs border, resulting in the arrival of goods in the EAEU customs territory by any means, including international mail, pipelines, and power lines, prior to the release of such goods by customs authorities. [1]

What Taxes are Paid When Importing Goods into EAEU Countries?

Pursuant to Clause 24 of Article 2 of the EAEU Customs Code, the following are recognized as taxes:

• value added tax;
• excises (excise tax or excise duty) levied in connection with the import of goods into the EAEU customs territory.

Similarly, in accordance with the Treaty on the Eurasian Economic Union [2] (the "EAEU Treaty"), indirect taxes consist of:

• VAT;
• excises (excise tax or excise duty).

Within the framework of customs legislation, VAT and excises levied upon the import of goods into the EAEU customs territory are classified as customs payments. Pursuant to Paragraph 1 of Article 136 of the EAEU Customs Code, the obligation to pay import customs duties and taxes, including VAT, regarding goods placed under the customs procedure for release for internal consumption, arises for the declarant at the moment the customs authority registers the goods declaration.

The collection of indirect taxes on goods imported into the territory of one EAEU member state from the territory of another member state is carried out by the tax authority of the member state into whose territory the goods are imported, based on the place of tax registration of the taxpayers who own the goods, including taxpayers applying special tax regimes. In this context, the owner of the goods is recognized as the person who holds the title to the goods or to whom the transfer of title is provided for by a contract.

What is the Deadline for Paying "Import" VAT?

A taxpayer must submit the corresponding tax return in the prescribed form[3] no later than the 20th day of the month following the month in which the imported goods were recorded on the books (or the payment deadline provided for by a lease/leasing agreement). Simultaneously with the tax return, the taxpayer must submit the following documents to the tax authority: [4]

• An application in hard copy or electronic form.
• A bank statement or other confirmation of the payment of indirect taxes on the imported goods.
• Shipping documents confirming the movement of goods from the territory of one member state to the territory of another member state.
• Invoices or another document confirming the value of the imported goods.
• Contracts serving as the basis for the acquisition of the imported goods.
• An information message specifying the following details: the number identifying the person; the full name of the taxpayer; the location; the contract number and date; the specification number and date.
• Commission, mandate, or agency agreements (if concluded).
• Contracts serving as the basis for the acquisition of goods under commission, mandate, or agency agreements.

VAT [5] is payable no later than the 20th day of the month following the month of:

• the recording of the imported goods on the books, which should be recognized as the reflection of the acquisition operations in the corresponding accounting accounts based on primary documents;[6]
• the payment deadline provided for by the lease (leasing) agreement.

The payment of VAT on goods imported from the territory of one member state to the territory of a special economic zone[7] and either not sold or sold without VAT before the end of the month in which 180 calendar days expire from the date they were recorded on the books, must be made no later than the 20th day of the month following the month in which the 180 calendar days expire from the date such goods were recorded.

The payment of excises on excisable goods subject to mandatory labeling is made within the timeframes established by the legislation of the member state. [8] The 180-day limitation is related to the moment of determining the tax base, which is formed according to the rules of tax legislation. [9]

If the tax authority of the member state into whose territory goods are imported identifies an understatement (concealment) of the tax base due to incomplete reporting (non-reporting) of the quantity of imported goods, this tax authority shall, upon request, inform the tax authority of the member state from whose territory the goods were exported regarding the collection of indirect taxes, unless the legislation of the latter provides for the submission of an application upon identifying such understatement (concealment).

VAT on the Import of Goods

As a general rule, the import of goods into Russia is subject to VAT. According to Paragraph 1 of Article 146 of the Tax Code of the Russian Federation, operations for the sale of goods in the Russian Federation are recognized as objects of value added tax.

It is important to note that the payment of VAT does not depend on the tax system used by the buyer; what matters is the country from which the goods are imported. This is because importing goods from the EAEU differs from importing from states outside the union. Indirect tax amounts payable on goods imported into the territory of one EAEU member state from another EAEU member state are calculated by the taxpayer at the tax rates established by the legislation of the EAEU member state into whose territory the goods are imported. [10]

The procedure for paying value added tax upon the import of goods [11] into the Russian Federation is established by the Tax Code of the Russian Federation, the EAEU Customs Code, and other legislative acts of the Russian Federation on customs matters, as well as the provisions of the EAEU Treaty and the Protocol on the Procedure for Collecting Indirect Taxes and the Mechanism for Monitoring Their Payment During the Export and Import of Goods, Performance of Work, and Provision of Services, which is Annex No. 18 to the EAEU Treaty.

Pursuant to Article 147 of the Tax Code of the RF, the territory of the Russian Federation is recognized as the place of sale of goods for VAT purposes if the goods are located in the RF at the start of shipment and transportation. Thus, the territory of the Russian Federation is not recognized as the place of sale for goods acquired and sold by a Russian organization on the territory of a foreign state, and accordingly, such sale is not subject to VAT. [12]

For VAT purposes, the tax base is determined on the date the taxpayer records the imported goods on the books, based on the cost of the acquired goods (including goods resulting from work performed under a manufacturing contract), as well as goods received under a commodity credit agreement (commodity loan), goods that are products of processing tolling raw materials, and excises payable on excisable goods. [13]

To determine the tax base, the value of goods expressed in foreign currency is converted into the national currency at the exchange rate of the national (central) bank of the member state on the date the goods are recorded on the books.

In accordance with the tax legislation of the RF, VAT rates are applied in the following amounts:

• 20% [14] – the general tax rate applied to most operations;
• 10% [15] – the rate applied to the import of specific types of goods and the provision of specific services determined by tax legislation,[16] which include: – food products in accordance with the National Classifier of Products by Economic Activity, subject to a 10% VAT rate upon sale; – food products in accordance with the unified TN VED EAEU, subject to a 10% VAT rate upon import into Russia; – products for children in accordance with the National Classifier of Products by Economic Activity, subject to a 10% VAT rate upon sale.

In some cases, the import of goods is exempt from VAT, such as the import of medical devices into Russia. [17]

At the same time, tax legislation provides for the possibility of applying tax deductions. Article 172 of the Tax Code of the RF defines the procedure for applying VAT deductions, according to which tax deductions are made based on invoices issued by sellers upon the taxpayer's acquisition of goods (work, services) or property rights, documents confirming the actual payment of tax amounts upon the import of goods into the RF and other territories under its jurisdiction, documents confirming the calculation of tax amounts by tax agents, or based on other documents in cases provided for by law. However, the possession of invoices and other primary accounting documents is not unconditional confirmation of the taxpayer's right to a VAT deduction and the recording of expenses if the submitted documents, in their entirety, do not confirm the reality of the business operations.[18]

Despite the cases for using a VAT deduction defined by law, tax authorities often deny such deductions for "import" tax amounts. The reason cited for such a refusal is that the tax deductions are claimed for the purpose of obtaining an unjustified tax benefit. An example of obtaining a tax benefit involved a scheme using additional business entities during the import of goods. [19]

Paying Import VAT via the Unified Tax Payment Mechanism

A Unified Tax Payment ("UTP") refers to funds transferred by a taxpayer, fee payer, insurance premium payer, tax agent, and/or other person to the budgetary system of the Russian Federation to the Federal Treasury account, intended to fulfill the taxpayer's aggregate obligation, as well as funds collected from such persons in accordance with the Tax Code of the RF. [20]

The aggregate obligation of a taxpayer is recognized as the total amount of taxes, advance payments, fees, insurance premiums, penalties, fines, and interest that the taxpayer is obliged to pay, and the amount of tax subject to refund to the budgetary system of the RF in cases provided for by law.

Since January 1, 2023, the obligation to pay import VAT is considered fulfilled by the taxpayer from the day the funds are transferred as a UTP to the budgetary system or from the day the funds are recognized as a UTP, provided that on the corresponding date, an aggregate obligation is recorded on the unified tax account (UTA) for which the attribution of such funds can be determined. [21] The aggregate obligation is formed and subject to accounting on the unified tax account no earlier than the deadline for paying the corresponding taxes.

The obligation to pay VAT and excises on goods imported from EAEU member states is considered fulfilled from the moment the attribution of funds transferred (recognized) as a UTP is determined toward the settlement of the current obligation under the indirect tax return for the corresponding period by the payment deadline—that is, no earlier than the 20th day of the month. It is important to note that funds received via a payment order are recognized as a UTP and participate in the settlement of the total aggregate obligation existing on the UTA on the date of payment, rather than the specific tax obligation indicated by the taxpayer in the payment order. Furthermore, if there are tax arrears recorded on the UTA, the fulfillment of the obligation to pay indirect taxes on imported goods will be carried out via the UTP only after such arrears are settled.

If the funds transferred as a UTP are insufficient to settle the arrears and cover the current obligation for VAT or excises on imported goods, the obligation to pay indirect taxes will not be considered fulfilled.

Consequently, the tax authorities cannot provide the confirmation mark of the payment of indirect taxes (or exemption from VAT and/or excises) on the application for the import of goods and the payment of indirect taxes earlier than the payment deadline for VAT and excises under the indirect tax return. The approval of the results of the application review and the provided documents (the placement of the tax authority's mark or the refusal to place the mark) is carried out no later than 10 business days from the date the application is received. If the ten-day period expires before the 20th day of the month, the Federal Tax Service of Russia recommends notifying taxpayers (via information letters) of the possibility of placing the said mark after the deadline for paying indirect taxes for the corresponding period.

How to Reflect Imports in a VAT Return?

VAT for imported goods is reflected in the indirect tax return; since August 13, 2023, a new form has been applied.[22] Incorrectly filling out a VAT return may lead to a refusal to accept the return, a tax audit, or liability.

The reason for the changes to the form and the procedure for filling out the return was the signing of the Protocol on Amending the EAEU Treaty, [23] which added provisions to the EAEU Treaty regarding the import of goods from EAEU countries into the territory of a free (special) economic zone.

The following changes were made to the new reporting form:

• the form was supplemented with Section 1.1, intended for residents of free economic zones;
• Section 1 was supplemented with line 050, reflecting the amount of import VAT for FEZ residents;
• the codes for types of excisable goods used when filling out Sections 2 and 3 of the return were changed.

How to Claim a Deduction for "Customs" VAT upon Import?

Based on Paragraph 2 of Article 171 of the Tax Code of the RF, deductions are applicable to tax amounts paid by the taxpayer upon the import of goods into the territory of Russia and other territories under its jurisdiction under the customs procedures of release for internal consumption, processing for internal consumption, temporary import, and processing outside the customs territory.

At the same time, the tax deduction is regulated by Article 172 of the Tax Code of the RF, according to which tax deductions are made based on invoices issued by sellers, documents confirming the actual payment of tax amounts upon the import of goods into the RF, documents confirming the calculation of tax amounts by tax agents, or based on other documents in cases provided for by law.

Tax deductions may be claimed in tax periods within 3 years after the goods acquired by the taxpayer on the territory of the RF or imported into the RF are recorded on the books. [24]

For the purpose of applying deductions for tax amounts paid by the taxpayer upon the import of goods into the RF under the customs procedures specified in Paragraph 2 of Article 171 of the Tax Code of the RF, the document confirming the payment of the VAT amount may be the goods declaration, which contains information certifying the release of goods in the corresponding customs procedure, as well as information on the amount of tax calculated and paid under the corresponding payment type code.

When reflecting the tax amount paid upon the import of goods into the RF in the purchase ledger,[25] a dash is placed in column 7, "Number and date of the document confirming the payment of tax." Information regarding the registration numbers of the goods declarations is specified in column 3, "Number and date of the seller's invoice." Similar indicators are filled in the corresponding lines of Section 8, "Information from the purchase ledger on operations reflected for the past tax period," of the VAT return approved by Order of the FNS of Russia No. MMV-7-3/558@ dated October 29, 2014. [26]

Refund of "Customs" VAT upon Import

The refund of customs VAT is regulated by Chapter 10 of the EAEU Customs Code and Federal Law No. 289-FZ dated August 3, 2018, On Customs Regulation in the Russian Federation and on Amending Certain Legislative Acts of the Russian Federation (the "Customs Regulation Law" or "Law No. 289-FZ"). Article 67 of the EAEU Customs Code defines the cases where amounts of customs duties and taxes are subject to refund (offset):

• customs duties and taxes are overpaid or over-collected;
• import customs duties paid into accounts defined in accordance with the EAEU Treaty are not identified as import customs duty amounts for specific goods;
• export customs duties and taxes paid into accounts defined by the legislation of EAEU countries are not identified as export customs duty or tax amounts for specific goods;
• goods are confiscated or turned into the property (revenue) of an EAEU state;
• release of goods in accordance with the declared customs procedure is refused;
• the customs declaration is withdrawn and/or the release of goods is canceled, if the obligation to pay customs duties and taxes arising upon the registration of the customs declaration was previously fulfilled;
• other cases provided for by the EAEU Customs Code and/or international treaties within the EAEU framework.

The discovery of the fact of overpayment or over-collection of customs duties, taxes, and other payments is established based on the results of customs control after the release of goods and is recorded by the following customs documents with marks from authorized customs officials:

• adjustment to the goods declaration;
• adjustment to the customs receipt warrant;
• other customs documents confirming that the amount of funds actually paid (collected) as customs duties and taxes exceeds the amount calculated and payable. [27]

Refunds of overpaid or over-collected customs payments to payers are carried out in the form of an offset against advance payments by the information system of the customs authorities.

VAT on Import of Goods into Russia under the STS

Organizations applying the Simplified Tax System are not recognized as VAT payers, except for VAT payable upon the import of goods into the territory of Russia. The calculation of the tax base for import for STS payers is carried out in the same way as for VAT payers under the General Tax System. However, it is important to note that imports from EAEU countries differ from imports from other countries.

For example, when importing goods from EAEU countries for VAT purposes, the tax base is determined on the date the taxpayer records the imported goods on the books based on the cost of the acquired goods, as well as goods received under a commodity credit agreement, products of processing tolling raw materials, and excises payable on excisable goods. The cost of acquired goods is the transaction price payable to the supplier for the goods (work, services) according to the contract terms. [28]

When importing goods from countries that are not part of the EAEU, VAT must be paid before submitting the customs declaration. Information about the VAT is reflected in the goods declaration.[29] When importing from EAEU countries, VAT is paid no later than the 20th day of the month following the month the imported goods were recorded on the books. Simultaneously with the VAT payment, it is necessary to submit an indirect tax return, an import application, and supporting documents. [30]

How to Reduce VAT in Import Operations?

Clause 24 of Annex No. 18 to the EAEU Treaty provides for a situation where the value of imported goods increases and further actions regarding VAT. The Protocol does not provide for an obligation to reduce the VAT tax base when the value of imported goods decreases after the end of the month in which the goods were recorded on the books. There are two positions on this matter:

• submitting an amended VAT return with a reduction in the deduction amounts;[31]
• the VAT amount actually paid at customs is deducted, so the deduction is reduced in the tax period in which the actual VAT refund was made, by restoring it in the sales ledger.[32]

There is also an opinion that it is not required to file an import application in place of the one previously submitted, to prepare an amended indirect tax return, or to restore VAT amounts previously accepted for deduction on imported goods. [33]

Double Taxation in the Calculation and Payment of "Customs" VAT upon Import into Russia

The principles of collecting indirect taxes in EAEU member states are defined by Article 72 of the EAEU Treaty, according to which the collection of VAT in mutual trade between EAEU member states is carried out according to the country-of-destination principle, providing for a zero VAT rate on exports and taxation of such goods upon import.

The procedure for applying VAT in trade relations between EAEU member states is determined by the Protocol on the Procedure for Collecting Indirect Taxes and the Mechanism for Monitoring Their Payment During the Export and Import of Goods, Performance of Work, and Provision of Services, [34] which provides that if a taxpayer of one EAEU member state acquires goods previously imported into the territory of that state by a taxpayer of another EAEU member state, on which indirect taxes were not paid, the payment of VAT is carried out by the taxpayer of the EAEU member state into whose territory the goods were imported:

• by the owner of the goods;
• if provided for by the legislation of the EAEU member state, by a commissioner, attorney, or agent (in the event the goods are sold through them).

VAT on Imports from Kazakhstan

The procedure for collecting VAT on the export and import of goods in the EAEU is established by the provisions of the EAEU Treaty and the Protocol on the Procedure for Collecting Indirect Taxes and the Mechanism for Monitoring Their Payment During the Export and Import of Goods, Performance of Work, and Provision of Services, which is Annex No. 18 to the EAEU Treaty.

Pursuant to Clause 14 of Section III of Annex No. 18 to the EAEU Treaty, for VAT purposes, the tax base is determined on the date the imported goods are recorded on the taxpayer's books (but no later than the deadline established by the legislation of the member state into which the goods are imported) based on the cost of the acquired goods. VAT is paid no later than the 20th day of the month following the month the imported goods were recorded on the books. Recording the imported goods on the books should be recognized as reflecting the acquisition operations in the corresponding accounting accounts based on primary documents. [35]

For work and services, Section IV of Annex No. 18 to the EAEU Treaty applies, according to which the territory of a member state is recognized as the place of sale of work and services if:

• the work or services are directly related to real estate located on the territory of that member state;
• the work or services are directly related to movable property or vehicles located on the territory of that member state;
• services in the fields of culture, art, training (education), physical culture, tourism, recreation, and sports are provided on the territory of that member state;
• a taxpayer of that member state acquires: – consulting, legal, accounting, auditing, engineering, advertising, design, and marketing services; – work or services for software development; – services for providing personnel if the personnel work at the buyer's place of business.
• the work is performed or services are provided by a taxpayer of that member state.

VAT on Imports from Belarus

According to Article 72 of the EAEU Treaty, the collection of VAT in mutual trade between EAEU member states is carried out according to the country-of-destination principle, meaning that when goods are exported from the Republic of Belarus to Russia, a zero VAT rate is applied in Belarus, and in the RF, the goods imported from Belarus are subject to VAT at the rates provided for by the tax legislation of the Russian Federation. [36]

Furthermore, this tax procedure upon import into Russia from Belarus applies regardless of whether these goods are exempt from VAT in Belarus upon their import into the unified EAEU customs territory.

Pursuant to Paragraph 6 of Article 72 of the EAEU Treaty, indirect taxes are not collected upon import from the territory of one EAEU member state to another if the goods, according to the legislation of the latter, are not subject to taxation (are exempt from taxation) upon import.

It is important to note that if a contract is concluded with a company from Belarus, but the goods are imported from third countries that are not EAEU members, such an operation is not recognized as an import from the EAEU. Consequently, the provisions of the Protocol do not apply. The "import" VAT will need to be paid at customs rather than to the FNS. [37]

Excise Tax or Excise Duty upon Import of Goods into Russia

An excise is recognized as a mandatory payment collected in connection with operations involving excisable goods. Excisable goods are defined in Article 181 of the Tax Code of the RF and include the following:

• ethyl alcohol;
• alcohol-containing products with an ethyl alcohol volume fraction of more than 9%;
• alcoholic products with an ethyl alcohol volume fraction of more than 0.5%;
• tobacco products;
• passenger cars;
• motor gasoline;
• diesel fuel;
• motor oils for diesel and/or carburetor (injection) engines;
• straight-run gasoline;
• middle distillates;
• benzene, paraxylene, orthoxylene;
• aviation kerosene;
• natural gas (in cases provided for by international treaties of the RF);
• liquids for electronic nicotine delivery systems;
• tobacco (tobacco products) intended for consumption by heating;
• grapes for the production of wine and sparkling wine;
• ethane;
• LPG (Liquefied Petroleum Gas);
• liquid steel;
• liquid steel produced in open-hearth, induction, and/or electric steelmaking furnaces;
• sugar-containing beverages.

When importing excisable goods into Russia, taxation is carried out in the following manner depending on the selected customs procedure:

• when placing goods under the customs procedures of release for internal consumption or processing for internal consumption, the excise is paid in full;
• when placing goods under the re-import procedure, the taxpayer pays the excise amounts from which they were exempt or which were returned to them in connection with the export;
• when placing goods under the procedures of transit, customs warehouse, re-export, duty-free trade, free warehouse, destruction, abandonment in favor of the state, and special customs procedures, as well as the free customs zone procedure, the excise is not paid;
• when placing goods under the procedure of processing on the customs territory, the excise is not paid provided the products are exported within a certain timeframe;
• when placing goods under the temporary import procedure, full or partial exemption from excise applies.

The collection of excises on EAEU excisable goods imported into Russia from an EAEU member state, except for those subject to mandatory excise stamps under RF law, is carried out by tax authorities. The collection of excises on goods subject to mandatory excise stamps is carried out by customs authorities.

When importing goods into Russia from EAEU member states based on mandate, commission, or agency agreements, the obligation to calculate and pay the tax is assigned to the attorney, commissioner, or agent. In this case, the tax is paid no later than the 20th day of the month following the month the goods were recorded on the books by the agent.

The obligation to pay excises on labeled EAEU goods arises from the day the labeled goods are imported into the RF. [38]

Calculation of Excise Value upon Import

The tax base for excise taxation consists of:

• the volume, quantity, or other indicators of imported labeled goods in physical terms, for which fixed (specific) excise rates are established;
• the value of imported excisable goods for which ad valorem excise rates are established;
• the volume of imported labeled goods in physical terms for calculating excises when applying a fixed tax rate;
• the estimated value of imported excisable goods, calculated based on maximum retail prices, for calculating excises when applying an ad valorem (percentage) tax rate for goods for which combined excise rates are established.

The excise amount payable on labeled EAEU goods is calculated by the taxpayer independently at the tax rates established by Article 193 of the Tax Code of the RF, in effect on the day of excise payment.

The calculation of excise value is carried out according to the rules of fixed and combined rates. A fixed rate is a specific amount per unit, weight, or volume. A combined rate is determined depending on the value and type of goods.

To pay excises on labeled EAEU goods imported from another member state, the taxpayer must submit the following documents to the customs authority:

• a hard copy and electronic application [39] in the form and format approved by the customs authority;
• transport (shipping) documents confirming the movement of labeled goods;
• documents necessary to confirm the EAEU status of the labeled goods;
• invoices issued during the shipment of labeled goods;
• contracts (contracts) on the basis of which the labeled goods were acquired;
• an information message from the seller specifying the taxpayer identification number, full name, location, contract number and date, and specification number and date.

If the seller is not the owner (e.g., an agent), information must also be provided regarding the owner. If the information message is in a foreign language, a Russian translation is mandatory.

Pursuant to Article 187 of the Tax Code of the RF, the tax base is determined separately for each type of excisable product.

Liability for Violation of Tax Legislation upon Import into Russia

In cases of non-payment or incomplete payment of indirect taxes on imported goods, payment after the established deadline, failure to submit tax returns, late submission, or inconsistencies in data, the tax authority collects the indirect taxes and penalties in the manner and amount established by the legislation of the member state into whose territory the goods are imported, and applies enforcement measures and penalties. [40]

A tax offense is recognized as a culpably committed unlawful act (action or omission) of a taxpayer or other person for which liability is established by the Tax Code of the RF. [41]

Administrative offenses in the field of finance, taxes, and fees are defined by Chapters 15 and 16 of the Code of Administrative Offenses of the RF. Examples of cases include:

• setting aside a decision on liability under Article 16.22 of the CAO RF; [42]
• setting aside a decision on liability under Part 2 of Article 16.2 of the CAO RF for declaring unreliable information regarding the classification code under TN VED;[43]
• setting aside a decision on liability under Article 16.21 of the CAO RF for using goods that were illegally moved across the EAEU customs border. [44]

Unreliable information, illegal movement of goods, and incorrect determination of tax rates all lead to incorrect tax payments and the commission of an administrative offense.

Tax evasion[45] by an organization is regulated by Article 199 of the Criminal Code of the RF. It is important to note that the Plenum of the Supreme Court of the RF has defined that the public danger of tax evasion consists in the non-receipt of funds into the budgetary system of the Russian Federation.

In addition, the penalty for committing a tax offense is a sanction in the form of monetary fines in the amounts established by Chapters 16 and 18 of the Tax Code of the RF. Cases on tax offenses are considered in the manner established by Articles 101 and 101.4 of the Tax Code of the RF. Pursuant to Paragraph 3 of Article 108 of the Tax Code of the RF, the basis for holding a person liable for a violation is the establishment of the fact of the violation by a tax authority decision that has entered into force. [46]

Regardless of the type of imported product, tax legislation provides specific types of taxes that foreign trade participants must contribute to the corresponding budgets, taking into account the requirements of both national and international legislation, including EAEU regulations.

________________________

References

[1] Article 2 of the EAEU Customs Code.

[2] The Treaty on the Eurasian Economic Union, signed in Astana on May 29, 2014. Ratified by Federal Law No. 279-FZ dated October 3, 2014, On the Ratification of the Treaty on the Eurasian Economic Union.

[3] Order of the FNS of Russia No. SA-7-3/765@ dated September 27, 2017, On Approving the Form and Format for Submitting a Tax Return for Indirect Taxes (Value Added Tax and Excises) upon the Import of Goods into the Territory of the Russian Federation from the Territory of Member States of the Eurasian Economic Union in Electronic Form and the Procedure for Filling it Out.

[4] Clause 20 of Annex No. 18 to the EAEU Treaty.

[5] Clause 19 of Annex No. 18 to the EAEU Treaty.

[6] Letters of the Ministry of Finance of Russia No. 03-07-13/1/88915 dated December 7, 2018, and No. 03-07-13/1/60883 dated October 19, 2016.

[7] Clause 1 of Article 455 of the EAEU Customs Code.

[8] Clause 19 of Annex No. 18 to the EAEU Treaty.

[9] Article 167 of the Tax Code of the RF.

[10] Clause 17 of Annex No. 18 to the EAEU Treaty.

[11] Resolution of the Fifteenth Arbitration Appeal Court No. 15AP-12560/2023 dated September 4, 2023, in case No. A32-21790/2022, On Recognizing as Invalid a Tax Authority Decision on Holding Liable for Committing a Tax Offense.

[12] Letter of the Ministry of Finance of Russia No. 03-07-08/59875 dated June 28, 2023.

[13] Clause 14 of Annex No. 18 to the EAEU Treaty.

[14] Paragraph 3 of Article 164 of the Tax Code of the RF.

[15] Paragraph 2 of Article 164 of the Tax Code of the RF.

[16] Decree of the Government of the RF No. 908 dated December 31, 2004, On Approving the Lists of Codes for Types of Food Products and Products for Children Subject to a 10 Percent Value Added Tax Rate.

[17] Paragraph 2 of Article 150 of the Tax Code of the RF.

[18] Clause 3 of the Review of the Practice of Application by Arbitration Courts of Legislative Provisions on Taxes and Fees Related to the Assessment of the Justification of a Tax Benefit, approved by the Presidium of the Supreme Court of the RF on December 13, 2023.

[19] Resolution of the Arbitration Court of the North-Western District No. F07-13114/2023 dated September 12, 2023, in case No. A66-16647/2021. Formal document flow and the absence of real business relations with counterparties were the reasons why the tax authority recognized such relations as aimed at obtaining an unjustified tax benefit. The company disagreed with the tax authority's decision and appealed to the court. The claim was denied because the submitted primary documents indicated the impossibility of the real execution of business operations and could not be considered a basis for applying deductions. By Ruling of the Supreme Court of the RF No. 307-ES23-26118 dated December 26, 2023, the transfer of case No. A66-16647/2021 to the Judicial Chamber for Economic Disputes of the Supreme Court of the RF for review was denied.

[20] Article 11.3 of the Tax Code of the RF.

[21] Letter of the FNS of Russia No. EA-4-15/3533@ dated March 24, 2023, On Placing a Mark on the Payment of Indirect Taxes.

[22] Order of the FNS of Russia No. ED-7-3/238@ dated April 12, 2023, On Amending the Annexes to the Order of the Federal Tax Service No. SA-7-3/765@ dated September 27, 2017.

[23] Signed in Moscow on February 8, 2021.

[24] Resolution of the Arbitration Court of the Far Eastern District No. F03-4613/2023 dated December 1, 2023, in case No. A51-19501/2022, On Recognizing as Unlawful a Tax Authority Decision Refusing to Refund VAT and Ordering the Refund of VAT. The refusal occurred due to missing the established deadline for claiming VAT deductions.

[25] Annex No. 4 to Decree of the Government of the Russian Federation No. 1137 dated December 26, 2011, On the Forms and Rules for Filling Out (Maintaining) Documents Used in Calculations for Value Added Tax.

[26] Letter of the FNS of Russia No. SD-4-3/3108@ dated February 22, 2019, On Value Added Tax.

[27] Paragraph 1 of Article 67 of the Customs Regulation Law.

[28] Clause 4 of Protocol No. 18 to the EAEU Treaty.

[29] Decision of the Customs Union Commission No. 257 dated May 20, 2010, On the Form of the Goods Declaration and the Procedure for Filling it Out.

[30] Clause 20 of Annex No. 18 to the EAEU Treaty.

[31] Letter of the Ministry of Finance No. 03-07-08/318 dated November 14, 2011.

[32] Letter of the Ministry of Finance of Russia No. 03-07-08/52520 dated August 16, 2017.

[33] Letter of the Ministry of Finance of Russia No. 03-07-13/1/77148 dated August 9, 2022.

[34] Annex No. 18 to the EAEU Treaty.

[35] Letter of the Ministry of Finance of Russia No. 03-07-13/1/38536 dated May 20, 2021.

[36] Letter of the Ministry of Finance of Russia No. 03-09-19/15218 dated March 2, 2020.

[37] Letter of the Ministry of Finance of the RF No. 03-07-13/1/111513 dated November 21, 2023.

[38] Resolution of the Fifteenth Arbitration Appeal Court No. 15AP-10616/2023 dated July 20, 2023, in case No. A32-56249/2022, On the Collection of Arrears on the Payment of Customs Payments and Penalties. As follows from the case materials, a shipment of tobacco products (cigarettes) lacking RF excise stamps was identified. The customs authority established that the goods were received by an individual entrepreneur, confirmed by the entrepreneur's signature. Customs issued a notification regarding unpaid customs payments. The failure to pay served as the basis for the appeal to the arbitration court. The customs claim was satisfied.

[39] Order of the FCS of the RF No. 150 dated January 27, 2011, On Approving the Form of the Application for the Payment of Excise on Labeled Goods of the Customs Union Imported into the Territory of the Russian Federation from the Territory of a Member State of the Customs Union.

[40] Clause 22 of Annex No. 18 to the EAEU Treaty.

[41] Article 106 of the Tax Code of the RF.

[42] Resolution of the Arbitration Court of the Central District No. F10-4192/2022 dated November 23, 2022, in case No. A08-4290/2021. The company incorrectly applied a 10% rate, leading to the full amount of VAT not being paid on time, and the applicant was lawfully held liable under Article 16.22 of the CAO RF.

[43] Resolution of the Arbitration Court of the North-Western District No. F07-21250/2023 dated February 7, 2024, in case No. A56-86605/2022. Declaring unreliable information regarding the properties and characteristics of the goods influenced their classification and served as a basis for understating payable customs payments.

[44] Resolution of the Arbitration Court of the Far Eastern District No. F03-6779/2021 dated January 14, 2022, in case No. A51-9663/2021. The use of goods illegally moved across the EAEU customs border without paying duties led to the entrepreneur being held liable. By Ruling of the Supreme Court of the RF No. 303-ES22-2969 dated April 7, 2022, the transfer of the case for review was denied.

[45] Resolution of the Arbitration Court of the North Caucasus District No. F08-12628/2023 dated March 1, 2024, in case No. A32-21790/2022, On Recognizing a Tax Authority Decision as Partially Invalid. In this case, the tax authority calculated VAT and income tax, citing the creation of a formal document flow with counterparties. The court decided to deny the claims due to the lack of evidence of business operations and the creation of a formal document flow aimed at obtaining an unjustified tax benefit.

[46] Letter of the Ministry of Finance of Russia No. 03-02-08/89387 dated October 13, 2020.