The Federal Tax Service of the Russian Federation (the “FTS”) has recently confirmed that a taxpayer may deduct VAT for a tax period even though no taxable operations occurred during this time. As a reminder, to date, the majority of regional tax authorities have insisted on deducting VAT only during tax periods in which a taxpayer has conducted taxable operations.
At the same time, the FTS has warned that a tax declaration with a VAT deduction is subject to an obligatory in-house audit. The FTS has also clarified that the deduction of VAT is possible even in later periods (when a taxpayer has VAT to pay), within a three-year period.
Consequently, a taxpayer has the option to declare a deduction of the total VAT, regardless of whether VAT must actually be paid, which, in turn, will trigger a tax inspection. The taxpayer also has the option of waiting till later periods, when there will be VAT to pay.
[Letter No. ЕD-3-3/631@ of the Federal Tax Service of the Russian Federation, dated 28 February 2012]