0% VAT rate: when is this possible?

VAT (value added tax) is an indirect tax, a way to replenish the state budget by removing the partial cost of a product, service or work, which is collected at various stages of the production process. But there are situations when you do not need to pay it. VAT 0 in what cases? About it further.

Types of VAT Rates

The basic rate of this tax is considered 18%. This is a kind of standard. But there are various exceptions to the rule when the VAT rate is reduced to 10% or even equal to zero. It is about the 0% VAT rate that will be discussed in this article.

Legislative nuances

In such cases, the 0% VAT rate is regulated by the Tax Code of the Russian Federation, chapter 21. It is usually determined by export operations and when a certain package of documents is submitted by the taxpayer. He is obliged to justify its application.

In addition, a 0 percent (%) VAT rate is a rate that is refundable from the budget. It should be remembered that a tariff without VAT is not the same thing.

Zero Interest Rates

It is said below in which cases the 0% VAT rate applies:

• services for the international transport of goods (when goods are transported by sea, river steamboats, as well as by aircraft, as well as rail and road transport, in which the location of the destination or departure is outside the Russian Federation);
• work (services) performed by companies involved in pipeline transport, oil, and oil products;
• services for the transportation of natural gas by pipeline transport, which is exported outside the Russian Federation or imported into the Russian Federation, this also includes services for the transportation of gas import to the territory of Russia, and its further processing;
• services provided by organizations managing the national electricity network that transmit electricity through the national electricity network to foreign countries;
• works (services) that are carried out by Russian organizations in the ports of the seas, rivers, transshipment and storage of goods crossing the Russian border, and the documents attached to the goods indicate the points of dispatch of goods and (or) the acceptance of goods that are outside the Russian Federation ;
• work (services) related to the processing of goods that are placed under the customs procedure for processing in the customs territory;
• services for the provision of railway rolling stock or containers, which are provided by Russian organizations or individual entrepreneurs in order to carry out transportation or transportation by rail of export goods on the condition that the destination or departure point is in Russia;
• work (services) that organizations of inland water transport carry out, as well as goods that are imported in the customs procedure of export during transportation of goods in Russia from the point of departure to the point of unloading or transshipment to ships, sea or mixed (sea-river) or other kind of transport;
• work (services) that are directly related to the transportation of goods and placed under customs transit when moving foreign goods from customs at the place of arrival in Russia to customs from the place of departure in Russia;
• passenger and baggage transportation services with the conditions that the point of departure, as well as the point of arrival are outside the territory of the Russian Federation.Clearance during transportation is based on a single international transportation document;

• goods (works, services) in the field of space professional activity;
• goods exported by the customs procedure, as well as goods placed under the procedure where there is a free customs zone, and confirming documents must be submitted to the tax service. The 0 percent VAT rate applies to the sale of this group of assets;
• precious metals to taxpayers engaged in mining, as well as the production of such metals from scrap and waste containing precious metals, to the Russian State Fund for Precious Stones and Metals, banks and the Central Bank of the Russian Federation;
• goods (works, services) intended for foreign diplomatic missions, as well as for personal use of diplomatic, as well as administrative and technical representatives of these departments, their family members living with them are also included only if the states of these foreign representatives provide for a similar order, or such order is spelled out in the international treaty of Russia;
• supplies exported from Russia. In this article, fuel and fuel and lubricants (fuel and lubricants), which are necessary for the normal functioning and movement of air and sea vessels, are considered as supplies;
• works (services) that are carried out by Russian carriers by rail, namely, transportation or transportation of goods exported from Russia, processed products, and related works (services);

• the construction of ships subject to registration in the Russian International Ship List, only on the basis of the submission of the necessary documents to the tax authorities.

To use the zero interest rate on tax, you must confirm this right.

Documents confirming the right to apply VAT 0%

During the sale of goods and to confirm the right to apply the VAT rate of 0 percent (%), the following package of documents must be submitted to the tax service:

1. An agreement (a copy of an agreement) drawn up between a taxpayer and a person of a foreign state on the possibility of delivering goods outside the single economic zone or the Customs Union. If the contracts contain information related to state secrets, then instead of a copy, an extract from the contract is submitted, which contains the necessary information for the possibility of tax control.
2. Bank statement (copy of bank statement), which confirms the actually received proceeds from the sale of goods (supplies) to a foreign country to the taxpayer account in a Russian bank.
3. A customs declaration (or a copy of the customs declaration) with the required marks of the Russian customs service that released the goods in the export procedure, and the Russian customs service of the place of departure, from where the goods were exported from Russia and other territories under its jurisdiction.
4. A copy of the shipping and (or) other document with the necessary marks of the border customs services, which confirmed that the goods were exported from the Russian Federation, another territory under its jurisdiction.

VAT 0 in what cases? This is a common question.

A special case

In a situation where the goods are placed under the customs procedure in a free customs zone, then they submit:

• contract (copy of the contract) concluded with the resident;
• a certificate is provided (a copy of the certificate), which indicates the registration of a person as a resident of a special economic zone;
• bank statement (copy of the bank statement) as well as a copy of the cash receipt order, which confirms the fact of receipt of revenue;
• customs declaration (copy of the customs declaration) with the necessary marks from the customs service.

Sale of goods through a commission agent

The 0 percent VAT rate is set in this case and implies the sale of goods through an authorized person or agent, which is specified in the commission agreement, the contract of agency or in the agency agreement. Under a commission agreement, a signatory for a certain amount of remuneration is also entitled to make a transaction on his own behalf, but at the expense of another (clause 1 of article 990 of the Civil Code of the Russian Federation).

Package of documents for IFTS

The following documents are provided or transferred to the tax office:

1. Copies of the commission agreement, the commission agreement or the agency agreement of the taxpayer with an attorney or agent are provided.
2. The contract (copy of the contract) of the person who delivers the goods for export at the direction of the taxpayer, with the person of a foreign state for the supply of goods outside our country.
3. Bank statement (copy of the bank statement), which confirms the actual receipt of funds after the goods are sold to a foreign country person in the bank account of a taxpayer or attorney (commission agent, agent) in a Russian bank.

VAT 0 in what cases? This is of interest to many. But not everyone knows how to achieve this.

If the deadline for submitting documents

What to do in this case and is there a way out of the situation? Copies of documents are transmitted by the taxpayer within one hundred and eighty calendar days, but no later than, starting from the date of placement of goods under the customs export procedures, in a free customs mode of movement.
If after the expiration of the period of 180 calendar days the taxpayer has not provided the necessary documents or copies of the documents, then the operation to sell the goods (work, services) is considered unconfirmed and is subject to taxation at the rates of 18% or 10%. VAT 0 in which cases, we reviewed.

Is it possible to return what has already leaked to the budget?

If in the future the taxpayer provides the tax authorities with supporting documents that justify that the tax rate is 0%, then the amounts paid earlier at a higher rate will be returned to the taxpayer.

Finally

According to the above information, one can answer in which cases the VAT rate of 0 percent (%) applies and what conditions must be met. The main thing is to remember that any actions on the territory of Russia must be done within the framework of the law. The prospect of a zero rate can be real only if the activity of an economic entity fits into the criteria for its application.