Documentary confirmation of the zero VAT rate when organizing international transportation of goods

Application of a 0% rate on transport services

In accordance with paragraph 1 of Art. 164 of the Tax Code of the Russian Federation, sellers apply VAT on transport services using a 0% rate when carrying out:

international transportation of goods with a point of departure/destination outside the Russian Federation, including transport and forwarding services by sea and river transport, mixed vessels, aircraft, railway and road transport;
transportation of oil and natural gas outside the Russian Federation or into the territory of the Russian Federation;
services for the transportation of goods placed under the customs transit regime;
transportation of passengers and luggage with a point of departure/destination outside the Russian Federation;
passenger transportation by rail in suburban traffic in the Russian Federation (in the period from 01/01/2015 to 12/31/2029);
transportation of passengers and luggage by public railway transport in long-distance traffic across Russia (from 01.01.2017 to 31.12.2029);
domestic air passenger and baggage transportation with a point of departure/destination in the territory of the Republic of Crimea or the city of Sevastopol, as well as in the territory of the Kaliningrad region.

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Since 2021, the norm according to which the provision of railway trains and containers for the transportation of export goods was subject to 0% VAT only if these trains and containers were owned by the taxpayer or were rented has been excluded from the Tax Code of the Russian Federation.

In order to take advantage of this rate for transportation outside the Russian Federation, the taxpayer must submit the following package of documents:

copies of agreements with counterparties (in the form of a single or several documents);
copies of shipping/transport documents or their register;
copies of customs declarations or their register.

The listed documents are submitted to the tax authorities within 180 days, counted from the date of marking by customs officers on shipping documents (clause 9 of Article 165 of the Tax Code of the Russian Federation). If the taxpayer does not collect the required package of documents on time, he will be forced to pay VAT to the budget at a rate of 20%.

NOTE! The 0% VAT rate can be waived. Read more here.

How to confirm the 0% VAT rate for international road transport

The Tax Code of the Russian Federation allows the application of a 0% VAT rate when providing services for the international road transportation of goods, as well as transport and forwarding services provided under a transport expedition agreement when organizing international transportation (clause 2.1, clause 1, Article 165 of the Tax Code of the Russian Federation). But it needs to be documented.

The Federal Tax Service in Letter dated September 16, 2019 N SD-4-3/18722 explained the nuances of documentary confirmation of the 0% rate when selling services for the international road transportation of goods imported into the territory of the Russian Federation from abroad through the Republic of Belarus, and freight forwarding services provided when organization of international transportation of goods.

To confirm 0% VAT, you need to submit to the tax authority a copy of the transport, shipping or other document with a Russian customs mark, which will confirm the import of goods into the territory of the Russian Federation (clause 3, clause 3.1, article 165 of the Tax Code of the Russian Federation).

However, the legislation does not specify the nuances of affixing such marks, nor does it indicate which Russian customs authority should affix them.

The Federal Tax Service believes that copies of the above documents with those marks of the Russian tax authorities, the affixing of which is provided for by the norms of customs legislation, should be submitted to the inspection.

Tax officials dwelled in more detail on the following situations (remember that we are talking about the provision of services for the transportation of goods by road from the territory of a foreign state that is not a member of the EAEU through the territory of a member state of the EAEU):

How to confirm the validity of the 0% VAT rate if the goods were placed under the customs procedure of customs transit at the customs authority of a member state of the EAEU

The customs authority puts the “Goods received” stamp in column “I” of the declaration for goods and in transport (shipment) documents with notes on the release of goods, fills it out and certifies it with a personal numbered stamp.

If transport or commercial documents are used as a declaration of goods, then the above marks are affixed on two copies of such documents with notes on the release of goods, as well as on the inventory of documents constituting the goods declaration.

How to confirm the validity of the 0% VAT rate if the goods were placed under the customs procedure of release for domestic consumption by the customs authority of a member state of the EAEU

Then, according to Art. 134 of the Labor Code of the Russian Federation, goods acquire the status of EAEU goods (with the exception of conditionally released goods specified in paragraph 1 of Article 126 of the Customs Code). Copies of transport, shipping and (or) other documents without any marks from Russian customs authorities should be submitted to the tax authorities.

See also:
The electronic format of the document on the export of goods has been approved to confirm the VAT rate of 0%
Error switching to Separate VAT accounting
Settlements with customs

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Application of a 10% rate for transport services

A rate of 10% can be applied to domestic Russian air passenger and baggage transportation (subclause 6, clause 2, article 164 of the Tax Code of the Russian Federation). The exception is similar transportation with a point of departure/destination in the territory of the Republic of Crimea, Sevastopol, Kaliningrad region - for them the rate is 0% (subclauses 4.1, 4.2, clause 1, article 164 of the Tax Code of the Russian Federation).

You can read more about products whose sales are subject to VAT at a rate of 10% in the following articles:

“What is included in the list of goods subject to VAT at a rate of 10%?”;
“New list of medical products for a VAT rate of 10%.”

What VAT rate to use for international transportation by Russian organizations

A zero VAT rate for international transport is provided for a number of services (the full list is in paragraph 1 of Article 164 of the Tax Code of the Russian Federation), including:

services for the international transportation of goods by various transport, in which the destination or departure point is located outside the Russian Federation;
transport and forwarding services provided by Russian organizations and individual entrepreneurs on the basis of a transport expedition agreement. Their classification is in the National Standard GOST R 52298-2004, approved. by order of Rostekhregulirovaniya dated December 30, 2004 No. 148-st.

If the service is not included in the list of clause 1 of Art. 164 of the Tax Code of the Russian Federation, then it is taxed at the full rate.

Important! If you want to apply a 0% rate, indicate the correct subject of the contract: freight forwarding services or international transportation services.

Application of a 20% rate for transport services

According to paragraph 3 of Art. 164 of the Tax Code of the Russian Federation, in all other cases, sellers using OSNO as a tax regime are subject to VAT on transport services at a rate of 20%. When a Russian organization provides transportation services under an agreement with a foreign organization that does not have a representative office on the territory of the Russian Federation, if the points of destination and departure are located on the territory of the Russian Federation, by virtue of the norms of sub. 4.1 clause 1 art. 148 of the Tax Code of the Russian Federation, a Russian organization must accrue and pay VAT to the budget at a rate of 20%.

Another case of applying a 20% rate on transport services is when a foreign carrier that does not have a representative office in the Russian Federation provides services to a Russian organization or individual entrepreneur on the territory of the Russian Federation. In this situation, the Russian company - the customer of the services - has the obligation of a tax agent: according to sub-clause. 4 paragraphs 1 art. 148 of the Tax Code of the Russian Federation, the place of provision of these services will be determined by the location of the buyer of the services - a Russian organization that is obliged to withhold VAT from the cost of services at a rate of 20% and transfer it to the budget.

It should be noted that transport services can be provided both within the framework of a contract for the supply of any products, and within the framework of an intermediary agreement. It should be borne in mind that in the case when the cost of transport services is subject to reimbursement by the buyer, he cannot deduct VAT on them (letter of the Ministry of Finance of the Russian Federation dated 02/06/2013 No. 03-07-11/2568). In the case of concluding intermediary agreements, the carrier charges VAT only on the amount of remuneration (letter of the Ministry of Finance of the Russian Federation dated December 29, 2012 No. 03-07-15/161).

In addition, if there is an intermediary agreement, the seller of the goods, purchasing these services on his own behalf, acts as an agent (commission agent) for transport services, therefore, in addition to the invoice for the goods, he also issues an invoice for this service to the buyer. Moreover, in this invoice in line 2, he indicates as the seller not himself, but the transport company (its full or abbreviated name) that delivered the goods (subclause “c” of clause 1 of the Rules for filling out the invoice used in calculating the tax on added value, approved by Decree of the Government of the Russian Federation dated December 26, 2011 No. 1137).

For a sample of filling out an invoice, see the article “Invoice for services - sample of filling out in 2019-2020.”

In a situation in which, within the framework of an intermediary agreement, a Russian company or individual entrepreneur performs the functions of an agent (commission agent) for transport services, being on the simplified tax system, the obligation to calculate and pay VAT follows from the provisions of sub-clause. 1 clause 5 art. 173 Tax Code of the Russian Federation.

Taxation of VAT on freight forwarding services for international transport

During international transportation, the parties to the transport expedition contract (customer and contractor) can be both Russian and foreign companies.

The place of state registration of the parties to such an agreement affects the taxation of transport and forwarding services (TES). At the same time, Art. 7 of the Tax Code of the Russian Federation establishes the priority of international tax norms over Russian tax legislation.

However, international tax agreements concluded between the Russian Federation and states that are not members of the Customs Union do not regulate the imposition of indirect taxes, including VAT. Therefore, for VAT purposes in this case, the norms of the Tax Code of the Russian Federation should be applied, taking into account the international rules for collecting VAT on the “country of destination” principle.

Tax relations regarding VAT between the participants of the Customs Union (Russian Federation, the Republic of Belarus, the Republic of Kazakhstan) are regulated by specially adopted documents.

Place of implementation of TEU

The object of taxation is the sale of services (work), the place of implementation of which is the territory of the Russian Federation [3, clause 1 of Art. 146]. If the customer or executor of the contract is a foreign legal entity, then for VAT purposes it must be established whether the Russian Federation is the place of sale of transport and forwarding services.

If the place of sale of services is not the Russian Federation, there is no subject to VAT.

Party to the agreement is a foreign person registered in a country that is not a member of the Customs Union

To determine the place of sale of services (works) directly related to the transportation and (or) transportation of goods, the provisions of Art. 148 of the Tax Code of the Russian Federation (Table 2).

If one of the parties to the contract is a foreign person, then the technical support is recognized as provided on the territory of the Russian Federation (i.e., subject to VAT) in the following cases:

1) the service provider is the Russian party to the contract (for cases of organizing the international transportation of goods placed under any customs procedure);

2) the service provider is a foreign organization not registered in the Russian Federation, and the services provided are related to the transportation of goods between points located on the territory of the Russian Federation.

This means that a Russian organization acquiring a fuel and energy device has an obligation to perform the functions of a VAT tax agent for a foreign person, established by Art. 161 Tax Code of the Russian Federation.

Example 1

The Russian organization TransService LLC provides technical support to a German company for organizing the transportation of cargo from a warehouse in Moscow to a warehouse in Hamburg. According to sub. 4.1 clause 1 art. 148 of the Tax Code of the Russian Federation, the place of sale of such services is the Russian Federation, therefore, the services of the forwarder are subject to VAT [3, clause 1 of Art. 146].

Example 2

The Russian company provides technical support to the Chinese company for organizing the transportation of goods from a warehouse in Shanghai (PRC) to a warehouse in Astana (Kazakhstan) without delivery into the customs territory of the Russian Federation. Since in the case under consideration neither the point of departure nor the point of destination are located on the territory of the Russian Federation, then, according to subparagraph. 5 p. 1 art. 148 of the Tax Code of the Russian Federation, the place of sale of such services is not the Russian Federation, therefore, the services of the forwarder are not subject to VAT [3, clause 1 of Art. 146].

Example 3

The Russian exports goods to Austria (dangerous goods). According to the terms of the agreement, ownership of the goods passes to the buyer at the customs post in the Smolensk region. Delivery is carried out by specialized road transport.

During transportation, goods are not subject to reloading from one vehicle to another. The Austrian buyer proposed to engage a specialized logistics company, a resident of Austria, to organize transportation.

Since the export agreement entrusts the delivery of goods to the Smolensk customs to the Russian exporter, CJSC Vitaruz entered into a transport expedition agreement with an Austrian logistics company to organize the transportation of dangerous goods from a warehouse in Moscow to the Smolensk customs.

Further, under a separate agreement, the same logistics company will provide cargo delivery services, but to an Austrian buyer who has received ownership of the goods at Smolensk customs. The cargo will not be reloaded en route.

In the case under consideration, CJSC Vitaruz acquires a fuel and power plant from a foreign company that is not registered with the tax authorities of the Russian Federation. In accordance with sub. 4.1 clause 1 art. 148 of the Tax Code of the Russian Federation, the place of sale of forwarding services in this case will be the Russian Federation, since the organization of transportation of goods by a foreign person is carried out under an agreement with CJSC Vitaruz between two points located on the territory of the Russian Federation, their sales are subject to VAT. CJSC Vitaruz is recognized as a tax agent in accordance with Art. 161 of the Tax Code of the Russian Federation and is obliged to pay VAT to the budget for a foreign company.

Let us separately consider the norms sub. 4.2 clause 1 art. 148 of the Tax Code of the Russian Federation, establishing the rules for determining the place of sale of freight forwarder services when transporting goods placed under the customs transit procedure.

Based on sub. 4.2 clause 1 art. 148 of the Tax Code of the Russian Federation, we can conclude that the place of sale of such services is the Russian Federation only if, according to the contract, a Russian forwarder provides services related to the international transportation of such goods between points from the place of arrival on the territory of the Russian Federation to the place of departure from the territory of the Russian Federation.

If the above subclause is interpreted literally for situations where services are provided by a Russian forwarder, when, under the terms of the contract, he provides services to the customer along the entire route of cargo transportation (from one foreign state to another), and not from the place of arrival on the territory of the Russian Federation to the place of departure from the territory of the Russian Federation, it can be concluded that for this case the rules of paragraph. 5 p. 1 art. 148 of the Tax Code of the Russian Federation, i.e. the place of sale of services is not the Russian Federation.

However, audit practice shows that individual taxpayers also use a different interpretation of the norms of the Tax Code of the Russian Federation on the place of sale of services provided along the entire route of goods placed under the customs transit regime:

a) on a route that runs through the territory of other states, the territory of the Russian Federation is not considered the place of sale of technical equipment (subclause 5, clause 1.1, Article 148 of the Tax Code of the Russian Federation), i.e. services along this part of the route are not subject to VAT;

b) on a route passing through the territory of the Russian Federation, the place of sale of TEU is considered to be the Russian Federation, and on this part of the route services are subject to VAT [3, sub. 4.2 clause 1 art. 148].

As we see, when interpreting the ambiguous provisions of sub. 4.2 clause 1 art. 148 of the Tax Code of the Russian Federation, different conclusions can be drawn that require the application of different rules for taxation of transactions. To obtain an official opinion regarding the interpretation of controversial provisions, the interested taxpayer should obtain targeted clarifications from the Ministry of Finance of Russia [3, Art. 34.2].

Party to the agreement is a foreign person registered in a country participating in the Customs Union

When performing work (providing services) by taxpayers of member states of the Customs Union, the tax base, rates of indirect taxes, the procedure for their collection and tax benefits (exemption from taxation) are determined in accordance with the legislation of the member state of the Customs Union, the territory of which is recognized as the place of implementation of work (services) ) [2, art. 2].

The place of implementation of work (services) is recognized as the territory of a member state of the Customs Union, whose taxpayer carries out the work (services are provided) [2, sub. 5. clause 1 art. 3].

P e a t i o n : the provisions of the Protocol on the procedure for levying indirect taxes and the mechanism for monitoring their payment when exporting and importing goods in the Customs Union (dated December 11, 2009) apply only to those situations when the parties to the transport expedition agreement are residents of member states of the Customs Union.

Consequently, if TES are provided by a Russian organization, and their customer is a Belarusian or Kazakh organization, the place of sale of such services is considered to be the territory of the Russian Federation, and the services are subject to VAT in the manner established by the Tax Code of the Russian Federation.

If the provider of services is an organization registered in the Republic of Belarus (or the Republic of Kazakhstan), and the customer is a Russian organization, then the place of their implementation is the Russian Federation only when transporting goods between two geographical points located on the territory of the Russian Federation. In other cases, the place of implementation of technical support provided by a Belarusian or Kazakh contractor to a Russian customer is not the Russian Federation.

Example 4

Belarusian Transport, under an agreement with the Russian exporter JSC Naftadob, provides him with services for organizing the transportation of equipment from Tyumen (Russia) to Brest (Belarus).

Since the services are provided by the taxpayer of the Republic of Belarus, and the route of goods passes not only through the customs territory of the Russian Federation, the Russian Federation is not recognized as the place of sale of such services [3, sub. 4.1 clause 1 art. 148], and, therefore, services are not subject to Russian VAT.

Accordingly, OJSC Naftadob does not have any obligations as a tax agent to pay VAT for a foreign entity [3, clauses 1, 2 of Art. 161].

Example 5

The Russian one provides TEU, a UK resident, for the road transportation of goods across the territory of the Republic of Belarus (from a warehouse in Minsk to a warehouse in Vitebsk). Should a Russian forwarding company subject its services to VAT?

Since the customer under the contract is a resident of the UK, to determine the place of sale of services, the provisions of the Tax Code of the Russian Federation should be applied, and not the legislation of the countries of the Customs Union.

The TES contractor is a Russian company, but the route does not pass through the territory of the Russian Federation (services are provided between geographical points in the territory of the Republic of Belarus).

Therefore, to determine the place of provision of services, subsection. 5 p. 1 art. 148 of the Tax Code of the Russian Federation, according to which the Russian Federation is not such, and, therefore, operations for the sale of services are not subject to VAT. In the terms of the contract, the price of the forwarder's services must be agreed upon by the parties without including the amount of VAT.

Author: O.P. Glebova, Director of Audit Activities, LLC Audit Consulting Company Yukon / Experts and Consultants

Exemption from VAT

According to sub. 5 clause 1.1 art. 148 of the Tax Code of the Russian Federation, when the points of departure and destination are located outside the Russian Federation, transport delivery refers to services that are not provided on the territory of the Russian Federation. In such a case, there is no need to charge VAT to the taxpayer. Also, VAT does not arise when transporting passengers at established rates by city and public transport due to subclause. 7 paragraph 2 art. 149 of the Tax Code of the Russian Federation.

If the carrier applies a special taxation regime and operates on the territory of the Russian Federation, he also does not have the obligation to charge VAT on transport services (letter of the Ministry of Finance dated November 24, 2016 No. 03-07-08/69349). Art. 346.11 of the Tax Code of the Russian Federation stipulates that persons applying the simplified tax system are not recognized as VAT payers. Thus, if an organization or individual entrepreneur is on the simplified tax system, they are not required to charge and pay VAT on transport services.

Results

The norms of the Tax Code of the Russian Federation stipulate that when providing transport services, it is possible both to apply all established rates and to exempt transport services from VAT. If a taxpayer applies a 0% rate, then he needs to justify the possibility of its application within 180 days, otherwise he must pay VAT to the budget at a rate of 20%. For most transport services provided on the territory of the Russian Federation, the carrier using OSNO is required to charge VAT at a rate of 20%. The application of a 10% rate must be justified documented. If transportation services are carried out outside the Russian Federation, VAT does not need to be paid.

Sources:

Tax Code of the Russian Federation
Decree of the Government of the Russian Federation of December 26, 2011 N 1137

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