17:06 The Ministry of Finance explained how to confirm the VAT rate of 10 percent on goods for which mandatory certification has been canceled

Home / Taxes / What is VAT and when does it increase to 20 percent? / VAT object

Back

Published: December 28, 2017

Reading time: 6 min

0

439

According to Russian legislation, today three VAT percentage rates are applied in the sale of goods and services - , 10% and 18%, each of which has its own regulated criteria for the distribution of validity.

• List of goods for which a VAT rate of 10% applies
• Procedure for confirming 10% VAT Where can I find the code for Russian and imported goods?
• For medical products

A rate of 10% is the most convenient when conducting operations with the sale of goods on the domestic market. In this regard, the Tax Code of the Russian Federation gives clear explanations: what goods are included in the group of distribution of the 10% VAT rate, how the right to use this rate is confirmed, what documents should be prepared.

Who needs confirmation of VAT at a rate of 10%

Russian companies and individual entrepreneurs that import, supply and sell products are required to pay VAT. Value added tax is applied when using the general taxation scheme. If the general VAT rate is applied to your goods (from January 2021 it has increased to 20%), you will also have to fill out calculations and declarations, report to the Federal Tax Service, and pay tax.

The possibility of using different amounts of value added tax is provided for in Article 164 of the Tax Code of the Russian Federation. A reduction is allowed in relation to the list of goods of socio-economic importance for citizens. At the same time, the Government of the Russian Federation received the authority to approve the list of products for which a preferential tax rate of 10% will apply.

At the end of 2004, the Government of the Russian Federation adopted Resolution No. 908, which extended a reduced VAT rate for certain categories of products. This list includes only food products and children's products, i.e. an assortment that is of particular importance to ordinary citizens. To obtain the right to report and pay a 10% tax, enterprises and individual entrepreneurs need to confirm that their product range is included in the specified list.

Confirmation of the 10% VAT rate on food products occurs by indicating the OKP2 code in tax returns. This indicator is determined according to the All-Russian Classifier of Products by Type of Economic Activity. The use of a classifier to confirm preferential taxation is necessary on the territory of the Russian Federation.

Also, Resolution No. 908 provides a list of product groups in accordance with the Commodity Nomenclature of Foreign Economic Activity. Codes for this classifier are used to apply a 10% rate when importing products into the territory of the Eurasian Union. Similarly, for each product group of children's products, the values ​​of OKP2 and HS are indicated.

Tax norm.

VAT is assessed at a tax rate of 10% on the sale of food products listed in clause 2 of Art. 164 Tax Code of the Russian Federation. The last paragraph of paragraph 2 of Art. 164 of the Tax Code of the Russian Federation states: codes for the types of products listed in this paragraph, in accordance with the All-Russian Classifier of Products, as well as the Commodity Nomenclature of Foreign Economic Activity, are determined by the Government of the Russian Federation. In pursuance of this norm, the Decree of the Government of the Russian Federation of December 31, 2004 No. 908 approved:

• List of codes for types of food products in accordance with the All-Russian Classifier of Products, subject to VAT at a tax rate of 10% upon sale;
• List of codes for types of food products in accordance with the Unified Commodity Nomenclature for Foreign Economic Activity of the Customs Union, subject to VAT at a tax rate of 10% when imported into the territory of the Russian Federation.

If there is no code for the imported product in the list, a VAT rate of 18% is applied.

At the same time, taxpayers should take into account the position of the Plenum of the Supreme Arbitration Court, set out in paragraph 20 of Resolution No. 33 of May 30, 2014. According to the judges, for the application of the VAT rate of 10% both when importing goods into the territory of the Russian Federation and when selling them on this The territory is sufficient for the product to comply with the code determined by the Government of the Russian Federation with reference to at least one of two sources - OKP [3] or HS. In particular, the said resolution states that the application of a 10% rate in relation to a specific product cannot depend on whether the product was sold on the territory of the Russian Federation or whether it was imported into the territory of the Russian Federation, since the provision of clause 2 of Art. 164 of the Tax Code of the Russian Federation does not provide for the possibility of different taxation of transactions with the same product according to this criterion (the Ministry of Finance currently gives the same recommendations - see letters dated December 17, 2015 No. 03-07-07/74080, dated October 19, 2015 No. 03-07-08/59788).

List of goods at the rate of 10% VAT

Since the adoption of Decree of the Government of the Russian Federation No. 908, the list of goods with VAT of 10 percent has been repeatedly changed and expanded. The latest changes currently in effect are effective April 1, 2021. All grocery products and children's products in the list are grouped in accordance with OKP2 values, which simplifies the search and selection of the desired items.

For each item, several product groups are presented at once, allowing you to accurately identify the product. For example, in the “Sugar” section, 7 items of this food product are indicated at once (raw beet or cane sugar, white beet sugar, etc.). In the example above, each of the 7 positions has its own identifier OKP2. For example, raw beet or cane sugar is identified by the OKP 10.81.11 indicator, which must be indicated in tax returns. Similar identifiers can be selected according to the Commodity Nomenclature of Foreign Economic Activity if you are importing sugar into the territory of the EAEU.

Products subject to preferential taxation also include meat, dairy products, vegetables, seafood, cereals, and other food products. The list of products for children includes knitwear, mattresses, beds, stationery, strollers, and other product groups.

If the supplied goods have clearly defined properties and can be unambiguously correlated with a specific position in the OKP classifier, there will be no problems with selecting codes and indicating them in the declaration. However, for many product groups it is difficult to do this on your own, since external signs may be the same for adjacent OKP positions. In this case, you can contact our specialists to confirm 10% VAT.

Scheme for confirming the right to a 10 percent rate

Having studied the conditions for applying the VAT rate of 10 percent for each type of product, we can come to the conclusion that the confirmation scheme is the same: - for Russian products: it is necessary to find out the corresponding code assigned to the product according to OKP and compare it with the codes specified in the list of goods subject to taxation approved by the Government of the Russian Federation rate of 10 percent; — for imported products: find the HS code of the imported goods in the customs tariff and compare with the codes specified in the List approved by the Government of the Russian Federation. If the product code is in this list, then when importing it, VAT is charged at a 10 percent rate; if not, at an 18 percent rate.

The list of food products, the taxation of which is carried out at 10 percent, is prescribed in paragraph 2 of Article 164 of the Russian Tax Code. In accordance with the last paragraph of this paragraph, the codes of the types of listed products are determined by the Government of the Russian Federation in accordance with the All-Russian Product Classifier (OKP) and the Commodity Nomenclature of Foreign Economic Activity (TN FEA). In turn, a specific list of codes for types of food products taxed at a rate of 10 percent was approved by Decree of the Government of the Russian Federation of December 31, 2004 N 908.

This document states that the belonging of domestic food products to those listed in the list is confirmed by the compliance of the given codes according to the classification OK 005-93 (OKP) with the OKP codes specified in the national standard, industry standard, technical specification. To confirm the VAT rate of 10 percent, a certificate of conformity is quite suitable. If the OKP code in it corresponds to the OKP code in the national standard, industry standard and technical specification. This position is confirmed by the letter of the Federal Tax Service of Russia dated February 1, 2011 N KE-4-3/ [email protected]

Procedure for confirming codes for preferential tax rates

The entrepreneur is obliged to fill out and submit quarterly calculations and an annual value added tax return to the Federal Tax Service. When filling out these reports, organizations and individual entrepreneurs themselves calculate VAT, i.e. must correctly determine and indicate the rate at which their goods will be taxed.

The legality of reducing tax rates depends on the accurate selection and confirmation of codes according to the OKP and TN VED classifiers. If you fill out the declaration incorrectly, you face a large fine under the Tax Code of the Russian Federation, additional financial expenses, the need to contact the Federal Tax Service with corrective forms, and file complaints in court.

You need to select codes according to OKP2 and Commodity Nomenclature of Foreign Economic Activity based on the identification characteristics of products or products, its description, intended purpose, composition of materials, degree of processing or readiness, and other indicators. To avoid mistakes, please contact our specialists to correctly determine the OKP2 codes and apply the VAT rate of 10 percent. We will help you confirm your right to a preferential rate in the following ways:

• by providing assistance in the development and registration of technical specifications for a product or children's product (the document will contain all the features that allow the product to be correlated with OKPD2 indicators);
• issuing a voluntary certificate of conformity in the GOST R system;
• having received an official conclusion from the Chamber of Commerce and Industry (CCI), which will officially confirm the code for your product;
• by providing assistance in filling out the declaration using preferential rates.

As a rule, documentation is sufficient to confirm the OKPD2 or HS code. However, in the most difficult situations, an examination may be required, an actual study of the properties and characteristics of manufactured goods or food products in the laboratory. You can also get consulting support from experienced specialists on any issues related to product identification.

Confirmation of the application of the VAT rate of 10 percent

TAXATION 2021: 10% value added tax rate.
In essence, the reduced VAT rate is a tax benefit that needs to be confirmed. Now we will look at what a company needs to justify the use of such a value added tax benefit. The VAT rate of 10 percent can be used when selling: 1) food products; 2) goods for children; 3) periodicals and book products related to education, science and culture; 4) medical goods of domestic and foreign production.

What is OKPD 2, and what is the HS of the EAEU

OKPD 2 is OK 034-2014 (KPES 2008). All-Russian classifier of products by type of economic activity”, approved by Order of Rosstandart dated January 31, 2014 N 14-Art.

The Government of the Russian Federation adopted 3 Resolutions of the Government of the Russian Federation on approval of lists of codes of goods subject to VAT at a tax rate of 10% (by type of goods):

-Resolution of the Government of the Russian Federation of September 15, 2008 No. 688 “On approval of lists of codes of medical goods subject to value added tax at a tax rate of 10 percent”

-Resolution of the Government of the Russian Federation of December 31, 2004 No. 908 “On approval of lists of codes for types of food products and goods for children subject to value added tax at a tax rate of 10 percent”

-Resolution of the Government of the Russian Federation dated January 23, 2003 No. 41 “On the list of types of periodicals and book products related to education, science and culture, subject to value added tax on their sale at a rate of 10 percent.”

The Commodity Nomenclature of Foreign Economic Activity of the EAEU is the Decision of the Council of the Eurasian Economic Commission dated July 16, 2012 No. 54 “On approval of the unified Commodity Nomenclature for Foreign Economic Activity of the Eurasian Economic Union and the Unified Customs Tariff of the Eurasian Economic Union.”

According to the Commodity Code for Foreign Economic Activity of the EAEU, the following lists of codes for types of products are established that are subject to VAT when imported into the territory of the EAEU at a tax rate of 10%:

- for food products - List of codes for types of food products that are subject to VAT at a rate of 10% when imported into the Russian Federation (approved by Decree of the Government of the Russian Federation of December 31, 2004 N 908);

- goods for children - List of codes for types of goods for children, which are subject to VAT at a rate of 10% when imported into the Russian Federation (approved by Decree of the Government of the Russian Federation of December 31, 2004 N 908);

- periodicals and books - List of types of periodicals and book products (approved by Decree of the Government of the Russian Federation of January 23, 2003 N 41);

-medical goods - List of codes of medical goods that are subject to VAT at a rate of 10% when imported into the Russian Federation (approved by Decree of the Government of the Russian Federation of September 15, 2008 N 688).

Reduced VAT rate. Right or duty?

Organization - the editorial board of the journal publishes a periodical - a journal about scientific research in the field of medicine.

Are such products subject to 10% VAT? If so, what kind of confirmation may tax authorities require during an audit? Is it possible to tax these products at a rate of 18% and work calmly, or do you still need to prove the legality of the 10% rate? Will an advertising insert (of a medical nature) in this magazine be taxed separately at a rate of 18%, or can it be taken into account together with the magazine and sold at a rate of 10%?

In accordance with paragraphs 3 p. 2 art. 164 Tax Code of the Russian Federation

VAT is taxed at a tax rate of 10% on the sale of periodicals, with the exception of periodicals of an advertising or erotic nature.

In this case, a periodical printed publication is understood as a newspaper, magazine, almanac, bulletin, or other publication that has a permanent name, current issue and is published at least once a year.

Advertising periodicals include periodicals in which advertising exceeds 40% of the volume of one issue of the periodical.

The list of types of periodicals and book products related to education, science and culture, subject to value added tax at a rate of 10 percent upon their sale, was approved by Decree of the Government of the Russian Federation dated January 23, 2003 No. 41.

According to this resolution, the conformity of the types of products produced and sold by media editorial offices, publishing houses, publishing organizations and news agencies with the products specified in this list is confirmed by documents (certificates) issued by the Federal Agency for Press and Mass Communications.

Thus, when selling your magazine, you must apply a VAT rate of 10%.

For a confirmation certificate, you should contact the Federal Agency for Press and Mass Communications

at the address: Moscow, Strastnoy Boulevard, 5. Tel. in Moscow: 200-11-77.

You are not required to have any other documents confirming the application of the 10% tax rate.

Consequently, the only evidence of the application of a reduced tax rate will be the specified certificate.

The question of whether it is possible not to apply a reduced tax rate is controversial and not fully settled by law.

According to Art. 56 Tax Code of the Russian Federation

Tax and fee benefits are recognized as the benefits provided to certain categories of taxpayers and fee payers provided for by the legislation on taxes and fees compared to other taxpayers or fee payers, including the opportunity not to pay a tax or fee or to pay them in a smaller amount.

Clause 2 art. 56 Tax Code of the Russian Federation

the taxpayer is given the right to refuse to use the benefit or to suspend its use for one or more tax periods, unless otherwise provided by the Tax Code of the Russian Federation.

At the same time, in accordance with paragraphs. 3 p. 1 art. 21 Tax Code of the Russian Federation

Taxpayers have the right to use tax benefits if there are grounds and in the manner established by the legislation on taxes and fees.

Consequently, the taxpayer can independently decide whether to use the benefits or not.

The question is whether the VAT tax rates of 0% and 10% are tax benefits or not.

It is around this that the spears break.

The Federal Tax Service of the Russian Federation, in a letter dated January 13, 2006 No. MM-6-03/ [email protected] , stated that the application of a tax rate of 0% for value added tax is not only the right of the taxpayer, but also the obligation established by Art. 164 Tax Code of the Russian Federation

.

The Supreme Arbitration Court of the Russian Federation, in decision No. 3894/06 dated May 31, 2006, recognized this document as corresponding to the Tax Code of the Russian Federation.

True, the said court decision was subsequently overturned by Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated November 14, 2006 No. 11253/06, but not due to the inconsistency of the provisions of the tax authorities’ letter with the norms of the Tax Code of the Russian Federation, but due to the fact that the letter does not meet the criteria allowing recognition it as a normative legal act.

At the same time, the Constitutional Court of the Russian Federation, in Ruling No. 41-O dated January 19, 2005, recognized the 0% rate as a tax benefit (which, accordingly, provides for the possibility of refusing to apply the benefit).

In principle, the editorial staff is closer to the position of officials.

Thus, benefits that clearly correspond to the definition given in Art. 56 Tax Code of the Russian Federation

, are exemption from VAT (
Article 145 of the Tax Code of the Russian Federation
) and exemption from taxation of transactions specified in
clause 3 of Art.
149 Tax Code of the Russian Federation .

In both cases, the Tax Code of the Russian Federation gives taxpayers the right

both to take advantage of the benefit and to refuse it.

In Art. 164 Tax Code of the Russian Federation

there is not a word that the taxpayer can, at his own discretion, apply a reduced VAT rate or refuse to apply it.

Thus, a reduced tax rate is not a benefit, but one of the mandatory elements of taxation.

Consequently, when selling, the taxpayer must apply the tax rate established by the Tax Code of the Russian Federation.

For an advertising insert, the tax treatment will depend on whether the insert is part of a magazine (say, stapled together with other pages) or whether it is a separate brochure (or sheets) simply inserted into the magazine.

In the first case, if the total volume of advertising in the magazine (including the insert) does not exceed 40% of the volume of the magazine, a rate of 10% is applied when selling the magazine.

If the advertising volume exceeds 40% of the magazine volume, a rate of 18% applies.

If advertising (sheets, brochures, booklets, etc.) is simply included in a magazine issue (not an integral part of the magazine), then this does not affect taxation.

Types of medical goods subject to VAT at 10%

Types of medical goods taxed at the 10% VAT rate applied to the sale of medical goods: