According to recent legislative amendments to the Tax Code of the Russian Federation (the "Tax Code"), suppliers will be entitled to issue adjustment invoices if the total cost of the goods (works or services) has changed since shipment. This adjustment may be caused by a change in:
- the price per unit of the goods; or
- the quantity of the goods.
It may be necessary in the retail sector to adjust the cost of the goods shipped, for example, if the wholesale supplier grants a discount or retroactive-bonus to the retailer for the purchase of a certain amount of goods, or the purchase and maintenance of a full range of products at retail points of sale.
The adjustment invoice is issued within five days of concluding the contract (or supplementary agreement to the contract), or establishing a primary accounting document that confirms the buyer's consent to adjust the cost of the goods.
Additionally, the adjustment invoice must contain all the information necessary to determine in what manner the cost and quantity of the goods have changed. For this reason, the invoice must indicate (i) the quantity of the goods; (ii) the price of the goods; and (iii) VAT accrued, both prior to and after the cost adjustment. The Tax Code provides a full list of requirements for issuing an adjustment invoice.
If the cost of the goods shipped is reduced, the adjustment invoice will serve as the basis for the supplier to deduct VAT. In addition, the buyer of the goods is obliged to restore VAT to the budget (now directly stipulated in the Tax Code). Adjustment invoices may be issued starting from the next VAT tax period, i.e. from 1 October 2011.
[Federal Law No. 245-FZ "On Amending Part One and Two of the Tax Code of the Russian Federation and Other Legislative Acts of the Russian Federation", dated 19 July 2011]