- The Federal Tax Service of Russia issued a reminder on reduced VAT rates of 5% and 7% on 17 March 2025.
- Organizations must apply these rates for 12 consecutive tax periods, equivalent to three years.
- Businesses cannot switch to the standard 20% VAT rate before the end of the three-year period.
- Early termination of reduced rates is possible if a taxpayer qualifies for VAT exemption under the simplified taxation system.
- VAT exemption applies if income for the previous year is less than 60 million rubles or if income exceeds 450 million rubles in the previous or current year.
- Switching between 5% and 7% rates does not interrupt the three-year period, but receiving a VAT exemption resets it.
- Businesses losing VAT exemption must restart the 12-quarter period upon regaining eligibility.
- These clarifications aim to ensure consistency and transparency in applying reduced VAT rates.
Source: regfollower.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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