The Supreme Arbitration Court of the Russian Federation (the "SAC") has recently declared void a provision that had obliged companies to restore and pay VAT when writing off goods with an expired shelf life.

The SAC indicated that because the Tax Code contains an exhaustive list of cases for which VAT must be restored and paid into the budget, and writing off goods with an expired shelf life is not included in this list, then companies are not obliged to restore VAT in this case.

In 2010, the Ministry of Finance of the Russian Federation proposed a draft law that would have significantly expanded the list of cases for which VAT must be restored, including the above cases. However, the draft law did not receive further support, even though it had passed the first reading of the Duma in March 2011.

[Decision No. 3943/11 of the Supreme Arbitration Court of the Russian Federation, dated 19 May 2011]