- Businesses and entrepreneurs must apply the 5% and 7% reduced VAT rates consecutively for 12 consecutive tax periods (three years).
- The use of these rates begins with the period when the first VAT declaration with these rates was submitted.
- It is not possible to switch to the 20% VAT rate before the end of this period.
- Early termination of the reduced rates is possible if the taxpayer on the simplified taxation system is automatically exempt from paying VAT from the following year.
- This means that their income for the previous year was less than 60 million rubles or their income for the previous year or the current year exceeded 450 million rubles.
- Switching from a 5% VAT rate to a 7% rate and back does not interrupt the specified period, but exemption from VAT does interrupt it.
- The countdown begins anew when the grounds for exemption are lost.
- For example, a taxpayer on the simplified taxation system applied a 5% rate from the beginning of 2025, and from December began to calculate the tax at a 7% rate, as they exceeded the threshold income (250 million rubles), and continued to apply it in 2026.
- However, due to a decrease in revenue from 2027, they began to apply 5% again.
- In this situation, it is considered that the term of application of special tax rates (12 quarters) was not interrupted.
- Another example: a taxpayer on the simplified taxation system applied a 5% rate from the beginning of 2025, and was exempt from calculating VAT from 2026.
- If in 2026 they lose the right to exemption, then from the following month they can choose either the general (20%) or the special (5%) VAT rate.
- The rate they choose must be applied to all transactions that are subject to this tax (that is, not exempt from VAT).
- It is not permissible to apply different rates depending on who purchases the corresponding goods, works or services.
Source: nalog.gov.ru
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.
