Reduced VAT rates must be applied for 12 consecutive tax periods (three years), starting from the period in which the first VAT return with the reduced rate is submitted. Changing the rate from 5% to 7%, or vice versa, does not interrupt this three-year period. Importantly, switching to the standard 20% VAT rate is not permitted before the three-year term expires.
Early termination of the reduced rate regime is only possible if the taxpayer receives an exemption from VAT obligations.
The guidance is accompanied by detailed examples to ensure clarity and practical understanding.
Reference Document: <Information> from the Federal Tax Service of Russia
"FTS Reminds Taxpayers How to Correctly Apply 5% and 7% Reduced VAT Rates Over a Three-Year Period"
Early termination of the reduced rate regime is only possible if the taxpayer receives an exemption from VAT obligations.
The guidance is accompanied by detailed examples to ensure clarity and practical understanding.
Reference Document: <Information> from the Federal Tax Service of Russia
"FTS Reminds Taxpayers How to Correctly Apply 5% and 7% Reduced VAT Rates Over a Three-Year Period"