Federal Law No. 92-FZ of 22.04.2024 introduces certain amendments to the Tax Code of the Russian Federation in relation to VAT.

Organizations and individual entrepreneurs who perform services involving the international carriage of goods or transport-forwarding services should take into account the following when organizing such carriage:

  1. From July 1, 2024, the zero rate of VAT does not apply to services involving the international transportation of goods if the following conditions are simultaneously met when such services are rendered:
  • Transportation is carried out only between points located in the territory of the Russian Federation;
  • Contractors are not listed in transportation, shipping and (or) other documents confirming the export of goods outside the territory of the Russian Federation (import of goods into the territory of the Russian Federation) as one of the carriers.

In this case, VAT should be determined at the rate of 20 percent of the value of the services.

  1. The process of document preparation and confirmation of zero VAT rates and tax deductions is simplified, namely:
  • The requirement for customs authorities’ stamps on transport, shipping, and other carriage documents is abolished:
  • from July 1, 2024, for forwarding services, services for the provision of railway rolling stock, and containers provided by Russian organizations or individual entrepreneurs for the transportation or shipment of exported (re-exported) goods by rail, if the point of departure and point of destination are located within the territory of the Russian Federation;
  • from April 1, 2025, for services related to the international transportation of goods when exporting or importing goods by road transport;
  • from April 1, 2025, for services provided when importing and exporting goods by rail, as well as when organizing and performing the transportation of goods by rail from the point of their arrival in the territory of the Russian Federation to the destination station located within the territory of the Russian Federation, instead of copies of transport, shipping, and other carriage documents, registers containing the information established by law will need to be submitted to the tax authorities in electronic form.

Reminder

  • International transportation of goods refers to the transportation of goods by sea, river, mixed (river-sea) vessels, aircraft, railway transport, and road vehicles, where the point of departure or point of destination of the goods is located outside the territory of the Russian Federation.
  • The provisions for the application of a zero VAT rate for international transportation services also apply to the following services provided by Russian organizations or individual entrepreneurs:
  • services for the provision of railway rolling stock and/or containers for the performance of international transportation;
  • forwarding services provided under a transport forwarding contract for organizing international transportation.
  • International transportation is equated to works (services) for the transportation and/or shipment of hydrocarbon raw materials from a point of departure located on the continental shelf of the Russian Federation and in the exclusive economic zone of the Russian Federation or the Russian part of the Caspian Sea bed to a point of destination located outside the territory of the Russian Federation and other territories under its jurisdiction.

Features

The rules for the application of a zero VAT rate for certain types of services performed by Russian carriers on railway transport are listed separately in the Tax Code of the Russian Federation. These include:

  • services for the transportation or shipment, as well as works (services) related to such transportation or shipment, of exported (re-exported) goods;
  • forwarding services, services for the provision of railway rolling stock and containers for the performance of transportation or shipment by rail of exported (re-exported) goods, provided that the point of departure and point of destination are located within the territory of the Russian Federation.

Thus, the new provision limiting the application of the zero VAT rate will not affect the above-mentioned services.

Additionally, according to official clarifications, particularly in the Letter of the Ministry of Finance of the Russian Federation dated June 25, 2024, No. 03-07-08/59144, the VAT application procedure from July 1, 2024, will not change concerning services for the provision of railway rolling stock and/or containers, as well as forwarding services provided when organizing and performing transportation by rail from the point of arrival of goods in the territory of the Russian Federation to the destination station located within the territory of the Russian Federation.

Our services

Konsu specialists are ready to answer your questions related to the application of these changes.