VAT on payment of bonuses to buyers. Russian practice. (Сontinuation)

11 June, 2012 Foreign experience

As a follow-up to preceding discussion on the question of accrual of VAT on payments of bonuses to the buyers (taking Russia as an example) we would like to bring your attention to the circumstance that practice of the Higher Administrative Court (HAC) of Russian Federation, according to which VAT is not applicable to such payments, was officially recognized by Russian Ministry of Finance.

Thus, we would like to remind you that the Presidium of HAC adopted the ruling, according to which payment of bonuses to the buyers is not a payment for the services and hence shall not be subject to Russian VAT.

Mentioned position was recently confirmed by the Ministry of Finance of Russian Federation, which in the letter from May 17, 2012 concluded that in case of receipt by the buyer of goods of the remuneration for achieving certain volume of purchases VAT is not accrued.

You can find the text of the Letter in Russian.

Source: “Tax Portal

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