The Arbitration Court of Moscow issued a decision in a case involving Central Telegraph regarding the moment of application of VAT deductions for advances issued for future supplies. The Inspectorate of the Federal Tax Service of Russia conducted a tax audit and refused to apply VAT deductions to the company for advances transferred to suppliers. The Inspectorate argued that deductions could only be claimed upon receipt of an invoice from the supplier, which was not provided during the audit. The lower courts supported the Inspectorate’s position, but the court of cassation disagreed and ordered a new trial. The new trial upheld the company’s position, stating that there was no specific rule governing the deadline for claiming deductions for advance VAT, and the general rule allowed deductions to be applied in any tax period within 3 years. The court emphasized that the application of VAT deductions for advances after the work is completed is unacceptable. The decision provides a legal approach justifying the taxpayer’s right to claim a deduction of VAT on advances in any tax period within the general 3-year period.
Source: russiantaxandcustoms.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
