The Ministry of Finance proposes to transfer the procedure for confirming the right to zero VAT by exporters completely into digital format. According to the draft amendments to the Tax Code, from October 1, 2023, all the information necessary for this will be submitted in electronic form. It is assumed that the tax service itself will compare them with electronic data received from customs. The business community notes that this will speed up the procedure: the submission of paper documents, the volume of which large exporters now measure by trucks, greatly slows it down.
The Ministry of Finance has prepared a draft amendment to the Tax Code, which involves the transfer of the procedure for confirming the right to zero VAT for all exporters into electronic format. Now the tax service must be provided with paper documents – this is at least a contract for the supply of goods and a declaration for goods with a mark of the Russian customs. This procedure has existed since 2000, and with the development of digital technologies, as the Ministry of Finance notes, it has already “lost its effectiveness.” In part, the confirmation procedure has already been transferred to electronic format – since 2015, information from declarations can be submitted in this form.
The Ministry of Finance proposes to establish, from October 1, 2023, the obligation to provide tax authorities with electronic registers containing information from both declarations and contracts. The Federal Tax Service will process this information automatically and compare it with the data received electronically from the Federal Customs Service. If inconsistencies or lack of information are found, the tax authority has the right to demand copies of the documents themselves. If they are not submitted within 30 days, the right to apply zero VAT is considered unconfirmed. An exception is made for cases when goods are placed under the free customs zone procedure. Then it is required to provide copies of contracts, declarations and documents confirming the status of a resident of a special economic zone.
The Ministry of Finance notes that the changes will reduce the administrative burden on business and simplify the process of confirming the zero VAT rate for the tax authorities themselves. The bill was prepared as part of the “Transformation of the Business Climate”, which involves the digitalization of export procedures and the simplification of the entry of Russian goods to foreign markets. Earlier, the government prepared a bill simplifying the confirmation of the right to zero VAT for individual exporters by abandoning the requirement for customs marks on documents confirming the export of goods by sea and river transport abroad (see Kommersant dated August 25). The need for such marks has disappeared due to the fact that the FCS is already collecting information in electronic form and it is enough for tax authorities to get access to it. In addition, according to the estimates of entrepreneurs, in 10% of cases the FTS cannot accept such documents due to the insufficiently clear seal of the customs officers.
According to Irina Tsygankova, Director of the Indirect Taxation Department of PwC Russia, many companies are already using the possibility of submitting electronic registers, so the changes are relevant for contracts that still need to be provided to the inspectors in their entirety. “The more pleasant news is the possibility of not submitting revised declarations if the export could not be confirmed on time,” she says. VAT on unconfirmed exports can be reflected in the current declaration. “Submission of revised declarations is always a challenge, primarily with the automation of VAT accounting,” notes Irina Tsygankova.
The Russian Union of Industrialists and Entrepreneurs (RSPP) told Kommersant that the amendments are “a long overdue decision.” Submission of primary documents on paper, when everything else is already in “digital”, greatly slowed down the whole process. “The transition to registers will allow us to stop duplicating submission of documents to different authorities, save time, nerves and paper: for large exporters, the primary products are trucks of paper,” they say in the association. They believe that the transition to registers will make the turnover more convenient and attract those who were frightened by the complexity of paperwork and possible sanctions for non-compliance with the rules. As Alexei Mostovshchikov, a member of the General Council of Delovaya Rossiya, adds, this format will show the deadline for consideration, the responsible persons, and in case of delays or unlawful refusals, exporters will be able to apply to the authorities to resolve the issue. “In this regard, the procedure should provide additional guarantees and reduce the period for confirming zero VAT,” he says.