On 19 July 2011, President Medvedev signed a law to expand the list of grounds for VAT restoration to the company budget (the "Law").

VAT must now be restored if the price for the delivered goods has subsequently decreased in value (for example, when a vendor offers retroactive discounts). In this case, a vendor sends a customer an adjusted invoice that is also regulated by the Law.

VAT must also be restored if goods (work, services) were initially acquired for a VATable transaction, but have subsequently been used for a non-VATable transaction. For example, if a company has already deducted VAT for the acquired goods, and then exports these goods, the previously deducted VAT must be restored to the company budget. The restored VAT may subsequently be deducted.

In respect of non-VATable transactions, this procedure has been in practice for a while, even though it has just now been formulated into law.

[Federal Law No. 245-FZ "On Amending the First and Second Parts of the Tax Code of the Russian Federation and Separate Acts of the Russian Federation on Taxes and Duties (Particularly Improving the Procedure for Collecting VAT)", dated 19 July 2011]