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Exporters Not Eligible For Zero VAT If Using Setoff Agreements


The Ministry of Finance (MinFin) did not find grounds for using zero rate VAT for companies exporting goods under setoff agreements.

The Letter of MinFin #03-07-08/212 explains that if the sale of exported goods is done under an agreement offsetting debt of one company to another via the exchange of goods, that this transaction is not eligible for zero VAT rate.

The Ministry alludes that the setoff agreement is not included in the list of documents that must be presented by taxpayers to support zero VAT rate claims for the sale of exported goods (Article 165 Paragraph 1 of the Tax Code).

According to RBK Daily, exporters will have to chose one of the two options: either wait till 2012 when new amendments to the Tax Code signed by President Dmitry Medvedev will come into effect, or to defend their right to zero VAT in court.

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