Value added tax stands out among all other taxes. Citizens of the Russian Federation, purchasing this or that product in a store, pay VAT without thinking about this fact.
What is VAT
VAT is value added tax. Its meaning lies in the withdrawal to the budget of a part of the increase in the value of goods (services) at all stages of their production and sale. The rules for levying VAT are spelled out in Chapter 21 of the Tax Code of the Russian Federation and Decree of the Government of the Russian Federation No. 914 dated 02.12.2000. Unlike direct taxes, this tax is called indirect, it is set as a surcharge to the price of goods or tariffs for a service, by analogy with excise duty. It can be described as a money turnover tax. The final consumer has to pay VAT, and the duty to transfer to the budget is assigned to tax agents: selling organizations and manufacturers act in their role.
Organizations, individual entrepreneurs, as well as people transporting goods through customs points at the borders of the Russian Federation can be recognized as VAT payers. If legal entities use a simplified taxation system in their work or pay a single agricultural tax, they are exempt from VAT. Legal entities that are obliged to transfer VAT are recognized as tax agents, with all the resulting obligations, including the quarterly filing of a VAT tax return to the Federal Tax Service.
Fixed tax rates
The 18% VAT rate is the main one applied in the Russian Federation for most goods and services. In addition, for some categories of goods and services, reduced or zero rates of this tax are provided. For certain groups of medicines, children's goods, essential foodstuffs: bread, dairy products - the rate is set at 10%.
Zero rates of this tax are provided for the provision of services for international transport, if the points of departure and destination are located abroad. The same benefits are provided when paying for services for the provision of railway containers, their rent and leasing (provided that they are used on the territory of the Russian Federation); for services for the transportation of natural gas through pipelines; services for the transmission of electricity through the unified power grid and some other categories. The package of documents required to obtain VAT benefits is described in Article 165 of the Tax Code of the Russian Federation.
Tax deductions
Tax agents have the right to reduce the calculated VAT by the amount of tax deductions, the list of which is also spelled out in the Tax Code of the Russian Federation. Among them are the amounts of VAT charged by suppliers when purchasing goods; paid by buyers-VAT payers; goods purchased for activities subject to VAT and other categories.
All deductions are reflected in the VAT return, copies of supporting documents must be attached to the report, at the request of the Inspectorate of the Federal Tax Service during verification, their originals are presented. The main document confirming the right to tax deduction of VAT is an invoice. The legislation prescribes the requirements for its design, content and registration. These requirements must be strictly observed, otherwise the tax office has the right to disregard the amount of deductions contained in incorrectly filled invoices and impose a penalty and penalty on the unpaid tax amount.
