New List of Technological Equipment Exempted from VAT when Imported to Russia.

12.05.2009

LEGAL UPDATE No. 34.

Goltsblat BLP advises that Resolution No. 372 dated 30 April 2009 of the Government of the Russian Federation “On Approval of the List of Technological Equipment (Including Components and Spare Parts) that has no Russian-manufactured Equivalents and the Import of Which on to the Customs Territory of the Russian Federation is not Subject to VAT” (hereinafter referred to as the “Resolution”) has been adopted.

In connection with the adoption of the Resolution, a provision of the Tax Code of the Russian Federation exempting from VAT imports into the Russian Federation of technological equipment (including components and spare parts) that has no Russian-manufactured equivalents and is included in the list of equipment introduced by the Resolution will enter into force from 1 July 2009.  It will replace the current provision specifying that imports on to the customs territory of the Russian Federation of technological equipment (including components and spare parts) as a contribution to the charter (joint) capitals of companies are not subject to VAT.

As a result, there will be no need to declare and comply with the specific intent of the import (in particular, the import of this equipment as a charter capital contribution) to be eligible for the VAT exemption on the import of corresponding technological equipment into the Russian Federation.
At the same time, however, the new list consists of far fewer commodity items than the current list contained in Appendix No. 1 to the Instruction approved by Order No. 131 of the State Customs Committee of the Russian Federation, dated 7 February 2001.

For example, the new list has only retained some of the items classified under the Commodity Classification for Foreign Trade in commodity groups 84 “Nuclear Reactors, Boilers, Equipment and Mechanical Devices and Parts Thereof” and 85 “Electrical Machines and Equipment and Parts Thereof; Sound-Recording and Sound-Reproducing Equipment, Equipment for the Recording and Reproduction of a Television Image and Sound, Parts Thereof and Accessories”.

Items classified in other commodity groups (73, 86 and 90) have been fully removed.

For further information, please contact:

Vladimir Tchikine, Partner,
Customs Law & Foreign Exchange Regulation, Goltsblat BLP
Tel: +7 (495) 287 44 44,
Email: info@gblplaw.com

Andrey Shpak, Head of the Tax Group, Goltsblat BLP
Tel: +7 (495) 287 44 44,
Email: info@gblplaw.com

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