Development of Judicial Practice on VAT Calculation for Subsidies from Various Budget Levels

• The Arbitration Court of the Trans-Baikal Territory issued a decision on the calculation of VAT when receiving subsidies from regional budgets.
• The Federal Tax Service conducted a tax audit of the Trans-Baikal Fuel and Energy Company for VAT in 2020.
• The audit resulted in additional tax obligations due to improper VAT deductions on goods and services purchased with subsidies.
• The company received subsidies for financial support related to the production and supply of thermal energy.
• The company did not include the subsidies in the VAT base, considering them compensation for lost income.
• The court supported the tax authority’s position, stating that the subsidies were for covering losses due to tariff differences.
• The court found the company’s argument that the subsidies were for lost income to be unfounded.

Source: russiantaxandcustoms.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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