The amendment to the VAT law of 1 April 1996 restored an exemption for VAT in respect of in-kind contributions to the charter capital of a Russian enterprise, spare parts for technical equipment which qualifies for the exemption itself, spare parts for public transport vehicles, periodical scientific publications and technical assistance under international treaties. This exemption must be applied retro-actively as of 1 January 1996. If VAT and customs duties have been paid, reimbursement can be received without interest, with all transfer costs at the expense of the applicant.

Letter of the State Customs Committee of 15 October 1996 No. 01-15/18363


On the basis of Presidential Decree No. 1212 (see Tax Alert 10/96 of 27 August 1996), taxpayers in arrears ("payment defaulters") must assign one bank account as their default bank account, whilst the use of other bank accounts will be significantly restricted. If a payment defaulter does not comply with this rule, all bank accounts may be frozen. Banks should notify the tax inspectorate of bank accounts opened by taxpayers. Failure to do this may result in an administrative fine of 100 times the minimum monthly wage (currently equalling US $ 1,300) imposed upon bank officials.

Letter of the State Tax Service, Ministry of Finance and Central Bank of 4 November 1996 No. PV-6-05/758, 3-B1-01, of 28 October 1996 No. 351 and Letter of the State Tax Service and the Central Bank of 1 November 1996 No. PV-6-10/756 and 30 October 1996 No. 353


The Ministry of Finance has clarified that business trip expenses incurred in other CIS states must be accounted for including VAT (i.e. the VAT is not eligible for offset against Russian output VAT).

Letter of the Ministry of Finance of 4 October 1996 No. 04-03-11

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