VAT Refunds In Russia Will Be Sped Up

by Tatiana Smolenskaya, Tax-News.com, Moscow

11 December 2009

The Russian Duma has approved on second reading a Bill amending the Tax Code to accelerate value-added tax (VAT) refunds. Parts 1 and 2 of the Code are to be amended.

Vladimir Pekhtin, a member of the Committee on Budget and Taxes, and co-author of the Bill, told reporters, according to Novosti Federatsii, that the Bill would improve the mechanism for VAT refunds to taxpayers, a procedure that currently can take several months.

The new procedures would allow refunds to be processed within 12 days, when claims have been submitted within five days of the tax due date.

The accelerated declarative order procedure would be available to organizations whose aggregate tax paid over the last three calendar years, including VAT, excise tax, profit tax and tax on mineral extraction (but not including export taxes), amounts to not less than RUB10bn (USD330m).

For smaller companies or those paying taxes for less than three years, a bank guarantee would be required; repayment including interest would be required for invalid claims.

The law is expected to become effective before the year end so that refund claims can be processed the new way by the first quarter of 2010.

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