A group of deputies and senators submitted to the State Duma amendments to the Tax Code on exemption from January 1, 2022, of public catering enterprises from the payment of value added tax (VAT), subject to a number of conditions. Changes will be made to Article 149 (transactions not subject to taxation). Earlier, President Vladimir Putin proposed to exempt catering enterprises from VAT.
According to the bill, restaurants, cafes, bars, fast food outlets, buffets, cafeterias, canteens, snack bars and catering services at the place chosen by the customer (catering service) can be exempted from VAT. For this, organizations must meet several conditions, Interfax reports with reference to the bill. The amendments do not apply to culinary and procurement organizations.
VAT exemption conditions:
- the company’s income for the year preceding the year of VAT exemption must not exceed RUB 2 billion;
- the share of income from catering services in the total amount of income must be at least 70%;
- the average monthly amount of payments accrued by the organization to individuals, determined on the basis of calculations for insurance premiums, must not be less than the size of the average monthly accrued salary in the region.
On June 4, Vladimir Putin at SPIEF-2021 proposed to exempt catering enterprises from VAT if the company’s revenue does not exceed 2 billion rubles. According to the president, the business will retain the right to pay a reduced rate of insurance premiums of 15%. Enterprises with up to 1.5 thousand employees will be able to take advantage of the privilege. First Deputy Prime Minister Andrei Belousov said that a pilot project could start in the fall and last for a year, 500 companies that have already been selected by the Federal Tax Service will take part in it.
For more details on the president’s proposal, see the Kommersant article “Benefits are being brought to restaurants”.