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Russian Court Rules On VAT Invoices

by Tatiana Smolenskaya, Tax-News.com, Moscow

04 February 2013


Russia's Supreme Arbitration Court has rejected a call by companies for a new general VAT adjustment form which could be used to record discounts given to customers in the form of bonuses for any amount of supplied goods.

Bonuses are offered in the Russian retail sector to encourage early payment of invoices, or to incentivize a shop to purchase a large quantity of a particular product. However, these bonuses do not reduce the list price of a product, and businesses offering bonuses therefore currently need to provide an adjusted invoice for VAT purposes for each original invoice. Businesses including Jaguar Land Rover, Philips, Volvo, Xerox argued that this requires a vast amount of extra paperwork, to the extent that it may not be possible to continue to offer bonuses.

Further, adjusted invoices must be provided within five days of the purchaser being made aware of the new price, making the issuance of invoices for cumulative periods impossible.

The Court, however, decided that the current rules accorded with Russia's tax code, and that there was therefore no basis for ordering a change.

TAGS: court | Russia | tax | business | value added tax (VAT) | retail

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