Development of Judicial Practice on Input VAT Recovery in Bankruptcy Asset Sales in Russia

• The Arbitration Court of the Volgograd Region made a decision on June 26, 2025, regarding the case of OAO DPK.
• The case involved the legality of refusing to restore input VAT for real estate sold during bankruptcy proceedings.
• The Russian tax authority conducted a tax audit of the simplified tax declaration for 2023 submitted by OAO DPK.
• The audit resulted in additional VAT charges and penalties for tax violations.
• The tax authority claimed that OAO DPK incorrectly reduced VAT amounts that should have been restored.
• The court supported the tax authority’s position and denied OAO DPK’s claim to invalidate the tax authority’s decision.
• OAO DPK was declared bankrupt in October 2020, and a permanent bankruptcy manager was appointed in November 2020.
• In the fourth quarter of 2023, OAO DPK sold non-residential real estate received from a developer in 2012.
• The input VAT was initially claimed in the fourth quarter of 2012 and partially refunded or offset against other tax obligations.
• The subsequent sale of real estate during bankruptcy was not considered a VAT taxable event, requiring restoration of previously deducted VAT.

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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