Russian Ministry seeks VAT exemption on goods donated to CSOs
The Ministry for Economic Development proposes to exempt businesses from VAT when transferring goods to CSOs
The measures will help lower costs for charity retailers and promote the development of food-sharing.
16. 11. 2021
The Ministry for Economic Development proposes to amend the Tax Code and exempt businesses from paying VAT on goods they donate to charity. Tatyana Ilyushnikova, the Deputy Minister for Economic Development, proposed the changes in a letter to the Deputy Prime Minister Tatyana Golikova, reports news agency Vedomosti.
These changes will allow businesses to recover VAT costs when transferring socially significant goods to CSOs. The list of goods will be determined by the government, and the cost volume profit will be limited to 1% of revenue.
Experts spoke with online media outlet Gazeta.ru and explained that these measures will help reduce the operating costs of charity retailers and stimulate the development of food-sharing.
On 29 October a meeting was held between Yulia Nazarova (President of the Food Foundation Rus), Artem Metelev (Deputy of the State Duma), Vladimir Konstantinov (partner of the VAT Consulting Department of leading tax firm PwC), Deputy Minister of Finance Alexey Sazanov, and representatives of the Federal Tax Service. During the meeting they discussed the possibility of government support for the proposed bill on food sharing. In order for the bill to be submitted this year, the amendments put forward by the Ministry of Finance need to be finalised.
The Rus Foundation has been working on tax amendments since 2018.
