Tax Specialization

At the sale of goods previously imported into the customs territory of the Customs Union, the VAT tax base is determined in accordance with Art. 154.1 of the Tax Code of the RF, as the cost of goods, calculated on the basis of the price specified in the transaction. The customs value of such goods, including adjustments by the customs authority, in this case cannot serve as the tax base.

As the results of the on-site tax inspection, the inspectors concluded that on the sale of goods on the territory of the Russian Federation in the calculation of VAT for the customs value of imported goods is to be taken for the tax base, not the value at which the product was sold. According to the inspectors, after adjusting the customs value of imported goods the price specified in the contract (invoice value), becomes nominal and is not to be applied by the taxpayer.

In connection with these findings there was a threat of recovery from the Company of amount of unpaid taxes, penalties and fines in an amount of dozens million rubles.

Disagreed with the conclusions of the tax authority, the taxpayer applied to “Solution” Law Office for legal aid.

Representing the interests of the taxpayer at the stage of the consideration of tax audit materials and decision-making, we proved that the customs value is applied in payment of customs duties and taxes only on the importation of goods into the customs territory of the Russian Federation, or on its exportation.

On the subsequent sale of the goods VAT tax base is determined in accordance with Art. 154.1 of the Tax Code of the RF, as the cost of goods, calculated on the basis of the price specified in the transaction.

The tax authority made the decision not to call the taxpayer to account. No adverse effects on the Company followed.