As taxpayers have been able to issue adjustment invoices since 1 October 2011 (the latest VAT tax period), the Federal Tax Service of the Russian Federation (the "FTS") has clarified several issues in relation to their use. (Please see our Legal Digest story from August 2011)

Adjustment invoices are issued when the cost of goods shipped (works performed, service rendered, and property rights transferred) changes. This also includes changes in the price (tariff) or the quantity (volume) of the goods.

The FTS has clarified that an adjustment invoice must be submitted within five days of drawing up the primary document demonstrating the consent of the buyer to change the cost of the goods.

Additionally, the FTS has clarified the circumstances and the procedure to be followed by the buyer and the seller of the goods in order to register an adjustment invoice in the purchase and the sales ledgers.

Unlike a standard invoice, the adjustment invoice recommended by the FTS has additional entries to indicate the figures prior to and after the adjustments, as well as entries to indicate the increase or decrease in the payment to be made.

[Letter of the Federal Tax Service of the Russian Federation No. ED-4-3/15927@ "On applying an adjustment invoice", dated 28 September 2011]