Russia VAT (НДС / NDS) Return Preparation Skill

Quality tier: Research-verified — pending sign-off by a Russian accountant. Tax year: 2026. The standard НДС rate was raised from 20% to 22% effective 1 January 2026 (Federal Law No. 425-FZ of 28 November 2025).

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Quick Reference

Item	2026 value	Native term
Standard VAT rate	22% (was 20% through 2025)	НДС / ставка 22%
Reduced rate (essentials)	10% — food, children's goods, medicines, educational publications	пониженная ставка 10%
Zero rate	0% — exports, international transport	нулевая ставка 0%
Calculated (gross-up) rates	22/122 and 10/110	расчётная ставка
Tax authority	Federal Tax Service (ФНС)	ФНС России
Tax invoice	Schyot-faktura	счёт-фактура
Sales / purchase ledgers	Sales ledger / purchase ledger	книга продаж / книга покупок
Return	VAT declaration — quarterly, electronic only	НДС-декларация
Return deadline	25th of the month after the quarter	—
Payment	3 equal instalments, 28th of each of the 3 months after quarter, via the unified tax account	ЕНП / ЕНС
Article 145 exemption	Revenue ≤ ₽2,000,000 over prior 3 months	освобождение по ст. 145
УСН VAT-exemption threshold (2026)	₽20,000,000 (2025 income)	порог 20 млн ₽
УСН special rate 5% (no input credit)	income ₽20m–₽272.5m	ставка 5%
УСН special rate 7% (no input credit)	income ₽272.5m–₽490.5m	ставка 7%
УСН standard rates (with input credit)	22% / 10% / 0%	—

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Skill Metadata

Field	Value
Jurisdiction	Russian Federation
Jurisdiction Code	RU
Tax Name	NDS (Nalog na Dobavlennuyu Stoimost / VAT)
Tax Year	2026
Primary Legislation	Tax Code of the Russian Federation, Part Two, Chapter 21 (Articles 143-178)
Supporting Legislation	Federal Law No. 425-FZ of 28 November 2025 (standard rate 20% → 22% and УСН VAT changes from 2026); Government Decree No. 1137 (invoice rules); Federal Law No. 303-FZ (2019 rate change 18% → 20%); Customs Code of the EAEU
Tax Authority	Federal Tax Service (ФНС / Federalnaya Nalogovaya Sluzhba) — nalog.gov.ru
Filing Portal	https://nalog.gov.ru (ФНС); Personal Account; via certified electronic reporting operators
Contributor	Open Accountants Skills Registry
Quality Tier	Research-verified — pending sign-off by a Russian accountant
Validated By	Deep research verification against ФНС (nalog.gov.ru) and reputable secondary sources
Validation Date	May 2026
Skill Version	2.0 (2026 update)
Confidence Coverage	Tier 1: rate application, standard box assignment, basic reverse charge. Tier 2: sanctions impact, partial exemption, intercompany pricing, EAEU trade. Tier 3: transfer pricing disputes, complex group restructuring, criminal tax liability.

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IMPORTANT: Sanctions Notice [T2]

Russia is subject to extensive international sanctions regimes imposed by the EU, US, UK, and other jurisdictions. These sanctions may affect:

• Cross-border supply chains and the ability to invoice or receive payment
• Import/export VAT treatment where goods are sanctioned
• The availability of reverse charge mechanisms with sanctioned counterparties
• Banking and payment processing for VAT refund claims
• Software and technology services from Western providers

Any cross-border transaction involving a Russian entity must be flagged for sanctions compliance review before VAT treatment is determined. This is a [T2] minimum -- escalate to [T3] if the practitioner is uncertain about sanctions applicability.

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Confidence Tier Definitions

Every rule in this skill is tagged with a confidence tier:

• [T1] Tier 1 -- Deterministic. Apply exactly as written. No reviewer judgement required.
• [T2] Tier 2 -- Reviewer Judgement Required. Flag the issue and present options. A qualified tax practitioner must confirm before filing.
• [T3] Tier 3 -- Out of Scope / Escalate. Skill does not cover this. Do not guess. Escalate to qualified practitioner and document the gap.

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Step 0: Client Onboarding Questions

Before classifying ANY transaction, you MUST know these facts about the client. Ask if not already known:

1. Entity name and INN (Taxpayer Identification Number) [T1] -- 10 digits for legal entities, 12 digits for individuals
2. KPP (Registration Reason Code) [T1] -- 9 digits, assigned to each branch/subdivision
3. VAT registration status [T1] -- General regime (OSNO) taxpayer, simplified regime (USN), or VAT-exempt under Article 145
4. VAT period [T1] -- quarterly (standard for all NDS payers)
5. Industry/sector [T2] -- impacts reduced rate eligibility and specific exemptions
6. Does the business make exempt supplies under Article 149? [T2] -- If yes, separate accounting required; partial deduction rules apply
7. Does the business engage in cross-border trade? [T2] -- Impacts EAEU rules, customs VAT, and sanctions screening
8. Does the business operate in special economic zones? [T2] -- May affect VAT obligations
9. Accumulated VAT credits carried forward [T1] -- from prior periods
10. Is the business subject to international sanctions? [T2] -- affects cross-border treatment

If any of items 1-4 are unknown, STOP. Do not classify any transactions until registration status and period are confirmed.

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Step 1: Transaction Classification Rules

1a. Determine Transaction Type [T1]

• Sale (output NDS) or Purchase (input NDS)
• Salaries, social contributions, dividend payments, loan principal repayments, fines/penalties, bank commission on loans = OUT OF SCOPE (never on NDS return)
• Legislation: Tax Code Chapter 21, Article 146 (taxable objects)

1b. Determine Counterparty Location [T1]

• Russia (domestic): supplier/customer is registered in Russian Federation
• EAEU: Armenia (AM), Belarus (BY), Kazakhstan (KZ), Kyrgyzstan (KG)
• Non-EAEU foreign: all other countries
• Note: EAEU members have special VAT rules under the Treaty on the Eurasian Economic Union

1c. Determine VAT Rate [T1]

Rate	Application	Legislation
22%	Standard rate -- most goods and services (increased from 20% effective 1 January 2026 per Federal Law signed 28 November 2025)	Article 164(3)
10%	Reduced rate -- food products (basic foodstuffs), children's goods, medical goods/equipment, periodicals/books (educational)	Article 164(2)
0%	Zero rate -- exports, international transportation, space-related services, diplomatic supplies	Article 164(1)

Rate determination from invoice amounts:

• Calculate: rate = vat_amount / net_amount * 100
• Normalize: <= 2% = 0%; 5-15% = 10%; >= 15% = 22%

1d. Reduced Rate (10%) -- Specific Categories [T1]

The 10% rate applies to the following under Article 164(2):

Food products:

• Meat and meat products (except delicacies: tongue, veal, suckling pig, balyk, etc.)
• Milk and dairy products
• Eggs and egg products
• Sugar, salt, flour, bread, cereals, pasta
• Vegetable oil, margarine
• Vegetables, fruits (domestic production)
• Baby food products
• Diabetic food products
• Fish (live, chilled, frozen -- except delicacy species)
• Seafood (except delicacy species: sturgeon, salmon, lobster, crab)

Children's goods:

• Children's clothing and footwear
• Baby beds, mattresses, carriages
• School supplies (notebooks, pens, pencils)
• Diapers
• Toys

Medical goods:

• Medicines (included in the Government-approved list)
• Medical devices (included in the Government-approved list)

Publications:

• Books and periodicals of educational, scientific, or cultural nature (excluding advertising and erotic content)

1e. Exempt Supplies (Article 149) [T1]

The following are exempt from NDS (no output tax, no input tax recovery):

• Medical services (licensed)
• Educational services (licensed, non-commercial)
• Financial services (banking, insurance, securities)
• Residential rental
• Religious articles (produced by religious organizations)
• Burial services
• Passenger transport (urban, suburban)
• Sale of residential property (secondary market)
• Certain cultural/artistic services

1f. Determine Expense Category [T1]

• Fixed assets: if acquisition value >= RUB 100,000 and useful life > 12 months (Article 256-257)
• Goods for resale: purchased to resell without transformation
• Raw materials/supplies: consumed in production
• Services/overheads: everything else (rent, utilities, consulting, etc.)

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Step 2: NDS Return Form Structure [T1]

The NDS return (Nalogovaya deklaratsiya po NDS) is filed electronically via certified operators. The declaration consists of 12 sections:

Legislation: Tax Code Article 174; FNS Order No. MMV-7-3/558@

Section 1 -- Summary (Tax Payable/Refundable)

Line	Description
030	NDS payable by non-NDS payers who issued invoices with NDS
040	NDS payable to the budget
050	NDS refundable from the budget

Section 3 -- Calculation of NDS Payable

Line	Description	Rate
010	Taxable sales at 22% -- tax base	22%
010 (tax)	Output NDS on line 010	calculated
020	Taxable sales at 10% -- tax base	10%
020 (tax)	Output NDS on line 020	calculated
030	Sales at calculated rates (22/122 or 10/110)	varies
040	Output NDS on construction for own consumption	22%
050	Output NDS on goods imported (transfer for own use)	varies
070	Advance payments received -- NDS	calculated
080	NDS on amounts related to taxable supplies	varies
118	TOTAL output NDS	sum
120	Input NDS on acquired goods/services/rights	deductible
130	Input NDS paid on imports	deductible
150	NDS paid as tax agent	deductible
160	NDS on construction for own consumption (deductible)	deductible
170	NDS on advances to suppliers (deductible)	deductible
180	NDS paid by tax agent (deductible as buyer)	deductible
190	TOTAL input NDS deductions	sum
200	NDS payable (if 118 > 190)	result
210	NDS refundable (if 190 > 118)	result

Section 4 -- Operations Taxed at 0% (Confirmed Exports)

Line	Description
010	Transaction code
020	Tax base for confirmed 0% rate
030	Input NDS deductions related to 0% supplies
040	NDS previously claimed, now restored

Section 5 -- Previously Unconfirmed 0% Rate (Now Confirmed)

Section 6 -- Unconfirmed 0% Rate Operations

Line	Description
010	Transaction code
020	Tax base
030	NDS at 22% (or 10%) applied to unconfirmed exports

Section 7 -- Exempt Operations (Article 149)

Section 8 -- Purchase Ledger (Kniga Pokupok) Data

Detailed invoice-by-invoice listing of all purchase invoices (scheta-faktury) claimed as input NDS deductions.

Section 9 -- Sales Ledger (Kniga Prodazh) Data

Detailed invoice-by-invoice listing of all sales invoices (scheta-faktury) generating output NDS.

Section 10 -- Intermediary (Agent/Commission) Operations -- Invoices Issued

Section 11 -- Intermediary Operations -- Invoices Received

Section 12 -- Invoices Issued by Non-NDS Payers / Exempt Persons

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Step 3: Reverse Charge and Tax Agent Mechanisms

3a. Tax Agent Obligations (Article 161) [T1]

In the following cases, the Russian buyer must withhold and remit NDS as a tax agent:

Situation	Tax Agent Duty	Rate
Purchase of services from a foreign entity not registered in Russia	Buyer withholds NDS	22% (or 10%)
Lease of federal/municipal property	Tenant withholds NDS	22/122
Purchase of state/municipal property	Buyer withholds NDS	22/122
Sale of confiscated property	Seller (agent) withholds NDS	22/122
Agency for foreign entity (no Russian registration)	Agent withholds NDS	22/122

Legislation: Tax Code Article 161

3b. Tax Agent -- Foreign Services [T1]

When a Russian entity purchases services from a foreign entity with no Russian tax registration:

1. Determine place of supply under Article 148
2. If place of supply is Russia, buyer must withhold NDS at 22/122 from the payment
3. Withheld NDS is remitted to the budget on the payment date
4. Buyer claims the withheld NDS as input deduction in the same quarter (if entitled)

Calculated rate formula: NDS = Payment Amount * 22 / 122

3c. EAEU Imports [T2]

Goods imported from EAEU member states (Belarus, Kazakhstan, Armenia, Kyrgyzstan):

• NDS is NOT collected at the customs border
• Instead, buyer self-assesses NDS on the imported goods
• Files a separate EAEU import declaration (Statistical form) by the 20th of the month following the month of acceptance
• Pays the NDS by the same deadline
• Claims input NDS deduction after payment and filing

Legislation: Treaty on the EAEU, Protocol on Indirect Taxes; Tax Code Article 72 of the EAEU Treaty

3d. Non-EAEU Imports [T1]

Goods imported from non-EAEU countries:

• NDS is collected by Russian Customs at the border
• Customs NDS is recoverable as input NDS
• Requires customs declaration (DT) as documentary evidence
• Rate: 22% or 10% depending on goods classification

3e. Exports -- Zero Rate Confirmation [T2]

Exports are zero-rated under Article 164(1), but the exporter must confirm the 0% rate by submitting a documentary package to the FNS within 180 calendar days of the customs export declaration:

Required documents:

1. Export contract (or extract)
2. Customs declaration with export stamps
3. Transport/shipping documents with customs stamps
4. Bank statement confirming receipt of payment (if applicable)

If 180-day deadline is missed: The export is re-rated at 22% (or 10%). Output NDS must be charged. The exporter may later reclaim the 0% rate by submitting the documents within 3 years.

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Step 4: Input NDS Deduction Rules

4a. General Conditions for Deduction (Article 171-172) [T1]

Input NDS is deductible if ALL of the following conditions are met:

1. Goods/services are acquired for use in NDS-taxable operations
2. Goods/services are recorded in accounting (accepted on the books)
3. A properly executed invoice (schyot-faktura) is available
4. For imports: customs declaration and payment documents are available

4b. Blocked Input NDS (Non-Deductible) [T1]

Input NDS is NOT deductible in the following cases:

Category	Legislation
Goods/services used exclusively for exempt operations (Article 149)	Article 170(2)(1)
Goods/services used by non-NDS payers (USN, ENVD, patent)	Article 170(2)(3)
Goods/services used for operations outside Russian territory	Article 170(2)(2)
Entertainment expenses exceeding 4% of labor costs	Article 264(2) + Article 170
Goods/services acquired with budget subsidies	Article 170(2.1)
Free distribution of goods for advertising (if unit cost > RUB 300)	Article 149(3)(25) / Article 170

4c. Partial Deduction (Separate Accounting) [T2]

If a business makes both taxable and exempt supplies:

• Must maintain separate accounting of input NDS
• Input NDS on goods/services used exclusively for taxable operations: fully deductible
• Input NDS on goods/services used exclusively for exempt operations: not deductible (included in cost)
• Input NDS on mixed-use goods/services: split proportionally

Proportion formula:

Deductible % = (Taxable revenue for quarter / Total revenue for quarter) * 100

5% rule: If exempt operations constitute 5% or less of total expenses for the quarter, the taxpayer may deduct ALL input NDS without separate accounting (Article 170(4)).

Flag for reviewer: proportional split must be confirmed by qualified practitioner.

4d. NDS on Advances [T1]

Advances received (seller):

• Output NDS must be charged on advance payments received: NDS = Advance * 22/122
• When goods/services are shipped, advance NDS is reversed and NDS is charged on the full supply
• Legislation: Article 167(1)(2)

Advances paid (buyer):

• Buyer MAY claim input NDS on advance payments to suppliers
• Requires advance invoice (schyot-faktura na avans) from supplier
• When goods/services are received, advance NDS deduction is reversed and replaced by standard deduction
• Legislation: Article 171(12), Article 172(9)

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Step 5: Derived Calculations [T1]

Total Output NDS (Section 3, line 118) =
    NDS on sales at 22% (line 010 tax)
  + NDS on sales at 10% (line 020 tax)
  + NDS at calculated rates (line 030 tax)
  + NDS on own-consumption construction (line 040)
  + NDS on advance payments received (line 070)
  + Other output NDS (line 080)

Total Input NDS Deductions (Section 3, line 190) =
    Input NDS on purchases (line 120)
  + Input NDS on imports (line 130)
  + NDS paid as tax agent (line 150)
  + NDS on own-consumption construction deductible (line 160)
  + NDS on advances paid (line 170)
  + Tax agent NDS deductible as buyer (line 180)

IF line 118 > line 190 THEN
    Line 200 = line 118 - line 190  (NDS payable)
    Line 210 = 0
ELSE
    Line 200 = 0
    Line 210 = line 190 - line 118  (NDS refundable)
END

Section 1, Line 040 = Line 200 (payable)
Section 1, Line 050 = Line 210 (refundable)

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Step 6: Key Thresholds

Threshold	Value	Legislation
VAT exemption (Article 145)	Revenue <= RUB 2,000,000 for prior 3 consecutive months	Article 145
Fixed asset classification	>= RUB 100,000 acquisition cost, > 12 months useful life	Article 256-257
Export 0% confirmation deadline	180 calendar days from customs export declaration	Article 165(9)
Advertising materials (free distribution exempt)	Unit cost <= RUB 300	Article 149(3)(25)
5% rule for separate accounting	Exempt expenses <= 5% of total expenses	Article 170(4)
Electronic invoice mandatory	All NDS payers (since 2014)	Article 169(1)
УСН revenue threshold (exemption from NDS)	RUB 20,000,000 (2026); RUB 15,000,000 (2027); RUB 10,000,000 (from 2028) -- phased reduction	Law 425-FZ / Article 145 / transitional provisions
УСН special rate 5% band (no input credit)	income RUB 20,000,000 -- RUB 272,500,000 (RUB 250m x 1.090 deflator)	Law 425-FZ / Article 164
УСН special rate 7% band (no input credit)	income RUB 272,500,000 -- RUB 490,500,000 (RUB 450m x 1.090 deflator)	Law 425-FZ / Article 164
УСН revenue threshold (no NDS -- general УСН eligibility)	~RUB 265,800,000-class, indexed annually (confirm current year)	Article 346.12

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Step 7: Filing Deadlines [T1]

Obligation	Period	Deadline	Legislation
NDS return (electronic)	Quarterly	25th of the month following the quarter end	Article 174(5)
NDS payment (installment 1/3)	Quarterly	28th of the month following the quarter end	Article 174(1)
NDS payment (installment 2/3)	Quarterly	28th of the second month following quarter end	Article 174(1)
NDS payment (installment 3/3)	Quarterly	28th of the third month following quarter end	Article 174(1)
EAEU import declaration	Monthly	20th of the month following month of acceptance	EAEU Treaty Protocol
EAEU import NDS payment	Monthly	20th of the month following month of acceptance	EAEU Treaty Protocol
Tax agent NDS (foreign services)	Per payment	Date of payment to foreign supplier	Article 174(4)
Export 0% documentary package	Per shipment	180 days from customs declaration	Article 165(9)

NDS is paid in three equal installments over the three months following the reporting quarter. Example: Q1 (Jan-Mar) NDS is paid 1/3 on April 28, 1/3 on May 28, 1/3 on June 28.

Payment mechanics — unified tax account (ЕНП / ЕНС). Since 2023, NDS (like nearly all federal taxes) is paid through the single tax payment / single tax account system: the taxpayer transfers a single lump sum (Yediny Nalogovy Platyozh / ЕНП) into their unified tax account (Yediny Nalogovy Schyot / ЕНС), and ФНС allocates it across liabilities by due date. The three NDS instalment due dates (28th of each of the three months after the quarter) are the dates by which sufficient positive balance must sit on the ЕНС. Where a notification of computed amounts is required before the declaration, file it by the prescribed date. [T1] Confirm current ЕНП notification timing with ФНС.

Electronic filing is mandatory for all NDS payers, including УСН payers newly liable for НДС from 2026. The НДС-декларация is filed electronically via certified operators / the ФНС portal. Paper returns are not accepted (except for tax agents who are not NDS payers themselves, under specific conditions).

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Step 8: Invoice (Schyot-Faktura) Requirements [T1]

A valid schyot-faktura must contain (Article 169(5)):

Field	Requirement
Sequential number and date	Mandatory
Seller name, address, INN/KPP	Mandatory
Buyer name, address, INN/KPP	Mandatory
Shipper and consignee (if different)	Mandatory for goods
Payment document reference (if advance)	Mandatory for advance invoices
Description of goods/services	Mandatory
Unit of measurement	Mandatory (OKEI code)
Quantity	Mandatory
Price per unit (excl. NDS)	Mandatory
Total amount (excl. NDS)	Mandatory
Excise amount (if applicable)	Mandatory
NDS rate	Mandatory (22%, 10%, 0%, or "bez NDS")
NDS amount	Mandatory
Total amount (incl. NDS)	Mandatory
Country of origin and customs declaration number	Mandatory for imported goods
Currency code	Mandatory

Invalid invoices result in denial of input NDS deduction.

Corrective invoices (ispravitelny schyot-faktura): Issued to correct errors in original invoices.

Adjustment invoices (korrektirovochny schyot-faktura): Issued when the price or quantity changes after the original supply (Article 169(5.2)).

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Step 9: Edge Case Registry

EC1 -- Purchase of services from a US software company (SaaS) [T2]

Situation: Russian company subscribes to a US-based SaaS platform. No NDS on the invoice. Resolution: Since 2019, foreign providers of electronic services to Russian consumers (B2C) must register and pay NDS themselves. For B2B: the Russian buyer acts as tax agent and withholds NDS at 22/122. However, sanctions may prevent payment processing to certain US companies. Flag for reviewer: confirm (a) whether the US provider has registered for NDS in Russia under the "Google tax" rules, (b) whether sanctions affect the payment, (c) tax agent obligations. Legislation: Article 161, Article 174.2

EC2 -- Export of goods with missed 180-day deadline [T1]

Situation: Company exported goods but failed to collect confirmation documents within 180 days. Resolution: The export must be treated as a domestic sale at 22% (or 10%). Output NDS is charged on the export value as of the date of shipment. The company may subsequently submit documents within the 3-year statute of limitations and reclaim the 0% rate and receive a refund. Legislation: Article 165(9), Article 164(1)

EC3 -- Advance payment received from customer [T1]

Situation: Company receives RUB 1,200,000 advance payment for future delivery. Resolution: Output NDS on advance = RUB 1,200,000 * 22/122 = RUB 216,393 (rounded). Issue advance schyot-faktura. When goods are shipped, reverse the advance NDS and charge NDS on the full shipment amount. Section 3 line 070 for advance NDS; line 170 for reversal. Legislation: Article 167(1)(2), Article 154(1)

EC4 -- Import from Belarus (EAEU) [T2]

Situation: Russian company imports goods from Belarus. Resolution: NDS is NOT collected at the customs border (no customs border within EAEU). Buyer self-assesses NDS on the import value. Files a separate statistical declaration by the 20th of the following month. Pays NDS by the same date. Claims input deduction after payment and filing. Rate depends on goods (22% or 10%). Legislation: EAEU Treaty Protocol on Indirect Taxes, Article 72

EC5 -- Mixed taxable and exempt operations [T2]

Situation: A company provides both taxable consulting services and exempt educational services. Resolution: Separate accounting is mandatory. Input NDS on costs directly attributable to taxable operations is fully deductible. Input NDS on costs directly attributable to exempt operations is not deductible (added to cost). Mixed costs are split proportionally based on revenue. Check the 5% rule: if exempt expenses are <= 5% of total quarterly expenses, all input NDS may be deducted. Legislation: Article 170(4), Article 149

EC6 -- Free distribution of promotional goods [T1]

Situation: Company distributes branded merchandise to clients at no charge. Resolution: If unit cost of each item <= RUB 300, the transfer is exempt from NDS under Article 149(3)(25). If unit cost > RUB 300, output NDS must be charged on the market value. Input NDS on the merchandise is deductible only if the transfer is NDS-taxable (i.e., cost > RUB 300). Legislation: Article 146(1)(2), Article 149(3)(25)

EC7 -- Construction for own consumption [T1]

Situation: Company builds a warehouse using its own workforce and materials. Resolution: Construction for own consumption (khozyaystvennym sposobom) triggers output NDS at 22% on the cost of construction at quarter-end (Section 3, line 040). The same NDS is immediately deductible as input NDS (line 160), resulting in a net zero effect for fully taxable businesses. The tax base is the actual cost of construction (materials + labor + overheads). Legislation: Article 146(1)(3), Article 159(2), Article 171(6)

EC8 -- VAT refund claim triggering desk audit (kameral'naya proverka) [T2]

Situation: Company files an NDS return claiming a refund (line 050 populated). Resolution: FNS will automatically conduct a desk audit (kameral'naya proverka) within 2 months (may be extended to 3 months). During the audit, FNS cross-references all invoices in Sections 8-9 against counterparties' returns. Discrepancies trigger additional information requests. Flag for reviewer: ensure all schyot-faktury are correct and counterparties have reported matching data. Consider whether an accelerated refund procedure (zayavitel'ny poryadok) is available under Article 176.1 (requires bank guarantee or history of large tax payments). Legislation: Article 176, Article 88

EC9 -- Digital services "Google Tax" [T2]

Situation: Foreign company provides digital services to Russian customers. Resolution: Since January 2019, foreign providers of electronic/digital services must register with FNS and pay NDS at 22% (previously 20%, raised from 1 January 2026) on B2C supplies (Article 174.2). For B2B supplies, the Russian buyer acts as tax agent. If the foreign provider has registered and charges Russian NDS, the Russian buyer should NOT also withhold as tax agent. Flag for reviewer: verify whether the foreign provider is on the FNS registry of registered foreign digital service providers. Legislation: Article 174.2, FNS Registry

EC10 -- Sanctions-affected cross-border transaction [T2]

Situation: Russian company attempts to purchase goods/services from an EU supplier subject to EU sanctions. Resolution: The VAT/NDS treatment cannot be determined independently of sanctions compliance. The transaction itself may be prohibited. Even if the transaction proceeds, banking restrictions may prevent payment and thus prevent tax agent obligations from being fulfilled. Escalate to legal counsel for sanctions review before determining NDS treatment. Do not classify until sanctions clearance is obtained. Legislation: EU Regulations 833/2014 (as amended), US Executive Orders, UK Sanctions Regulations

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Step 10: Special Regimes and Exemptions [T2]

УСН (Simplified Tax System / Uproshchyonnaya Sistema Nalogooblozheniya) — 2026 rules

IMPORTANT 2026 CHANGE: From 1 January 2026, УСН payers are no longer automatically outside the НДС system. Whether a УСН payer charges НДС depends on income against the VAT-exemption threshold.

• Below threshold — automatically exempt. A УСН payer whose income for the prior year (2025 for the 2026 obligation) does not exceed ₽20,000,000 is exempt from НДС by operation of law (no notification required). Exceptions still apply: НДС on imports (customs and EAEU) must still be paid, and НДС as tax agent must still be withheld.
• Above the ₽20,000,000 threshold — must charge НДС. Such a УСН payer chooses ONE of:

Option	Rate(s)	Income band	Input НДС credit
Special reduced rate 5%	5%	₽20m – ₽272.5m (₽250m × 1.090 deflator)	NOT available
Special reduced rate 7%	7%	₽272.5m – ₽490.5m (₽450m × 1.090 deflator)	NOT available
Standard rates	22% / 10% / 0%	up to ₽490.5m	Available (normal deduction rules)

• The special 5%/7% rates carry no right to deduct input НДС (Article 170 / transitional provisions of Law 425-FZ). The trade-off (lower output rate vs. loss of input credit) is a [T2] reviewer decision — model both options.
• Once a special rate is chosen it generally must be applied for a minimum committed period (verify current period rule with ФНС). [T2]
• A newly-liable УСН payer may opt out of the reduced rate in its first year, and ФНС has indicated leniency on a first missed declaration. [T2]
• If a sub-threshold (exempt) УСН payer nevertheless issues an invoice showing НДС, they must remit that НДС to the budget but cannot claim input deductions (Section 12 reporting).
• The threshold steps down in later years: ₽20,000,000 (2026) → ₽15,000,000 (2027) → ₽10,000,000 (from 2028). [T2 — confirm against ФНС before relying on 2027/2028 figures.]
• General УСН eligibility income cap remains separate and is indexed annually (≈ ₽265,800,000-class figure; confirm current-year value). [T2]

Article 145 Exemption

• Available to taxpayers with revenue <= RUB 2,000,000 for 3 consecutive preceding calendar months
• Must notify FNS; exemption lasts 12 months (can be extended)
• Does not apply to excisable goods
• NDS on imports must still be paid
• Cannot claim input NDS during exemption period

ENVD / Patent System

• ENVD was abolished from January 1, 2021
• Patent system (PSN) payers are not NDS payers (same exceptions as USN)

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Step 11: Reviewer Escalation Protocol

When a [T2] situation is identified, output the following structured flag:

REVIEWER FLAG
Tier: T2
Transaction: [description]
Issue: [what is ambiguous]
Options: [list the possible treatments]
Recommended: [which treatment is most likely correct and why]
Action Required: Qualified tax practitioner must confirm before filing.

When a [T3] situation is identified, output:

ESCALATION REQUIRED
Tier: T3
Transaction: [description]
Issue: [what is outside skill scope]
Action Required: Do not classify. Refer to qualified practitioner. Document gap.

---

PROHIBITIONS [T1]

• NEVER let AI guess NDS treatment -- classification is deterministic from facts and legislation
• NEVER apply input NDS deduction without a valid schyot-faktura (invoice)
• NEVER allow USN/Patent payers to claim input NDS deductions
• NEVER apply 0% rate to exports without confirmed documentary evidence within 180 days
• NEVER ignore tax agent obligations on purchases from foreign entities
• NEVER classify sanctions-affected transactions without legal review [T2]
• NEVER confuse EAEU imports (self-assessed, no customs) with non-EAEU imports (customs-collected)
• NEVER apply the 5% rule without calculating actual exempt expenses as a percentage of total expenses
• NEVER accept paper NDS returns -- electronic filing is mandatory
• NEVER omit advance NDS when advance payments are received
• NEVER compute any number -- all arithmetic is handled by the deterministic engine, not the AI

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Step 12: Test Suite

Test 1 -- Standard domestic sale at 22%

Input: Russian company sells consulting services to Russian client. Net amount RUB 500,000. NDS at 22%. Expected output: Section 3 line 010: tax base = RUB 500,000. Output NDS = RUB 110,000. Section 9 entry with schyot-faktura details.

Note: Prior to 1 January 2026, the standard rate was 20% and output NDS would have been RUB 100,000. All test cases below use the 22% rate effective from 2026.

Test 2 -- Purchase with input NDS deduction

Input: Russian company purchases office supplies from Russian supplier. Gross RUB 122,000 including NDS RUB 22,000, net RUB 100,000. Valid schyot-faktura received. Goods recorded in accounting. Expected output: Section 3 line 120: input NDS = RUB 22,000. Section 8 entry with schyot-faktura details. Fully deductible.

Test 3 -- Tax agent on foreign services

Input: Russian company pays USD 10,000 (equivalent RUB 900,000) to a UK consulting firm with no Russian registration. Services consumed in Russia. Expected output: Tax agent NDS = RUB 900,000 * 22/122 = RUB 162,295 (rounded). Withhold and remit on payment date. Section 3 line 150: deductible NDS = RUB 162,295 (if entitled). Net effect zero for fully taxable business.

Test 4 -- Export with confirmed 0% rate

Input: Russian company exports machinery to Turkey. Invoice value RUB 3,000,000. All documentary evidence submitted within 180 days. Expected output: Section 4: tax base = RUB 3,000,000. NDS rate = 0%. Related input NDS deductions claimed in Section 4 line 030.

Test 5 -- Sale of food products at 10%

Input: Russian company sells flour and bread products. Net amount RUB 200,000. NDS at 10%. Expected output: Section 3 line 020: tax base = RUB 200,000. Output NDS = RUB 20,000.

Test 6 -- Advance payment received

Input: Russian company receives advance of RUB 600,000 from customer for future delivery. Expected output: Advance NDS = RUB 600,000 * 22/122 = RUB 108,197 (rounded). Section 3 line 070 = RUB 108,197. Advance schyot-faktura issued.

Test 7 -- EAEU import from Kazakhstan

Input: Russian company imports raw materials from Kazakhstan. Value RUB 1,000,000. Goods accepted on March 15. Expected output: Self-assessed NDS = RUB 1,000,000 * 22% = RUB 220,000. EAEU import declaration filed by April 20. NDS paid by April 20. Input NDS of RUB 220,000 claimed after payment and filing. [T2] -- confirm goods classification and rate.

Test 8 -- USN payer issues invoice with NDS

Input: USN payer issues an invoice to customer showing NDS of RUB 50,000. Not registered as NDS payer. Expected output: USN payer must remit RUB 50,000 to the budget. Section 12 entry. NO input NDS deduction available. Report in Section 1 line 030.

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2026 Tax Reforms (Federal Law No. 425-FZ, 28 November 2025)

Change	Details	Effective
Standard НДС rate increase	20% → 22%	1 January 2026
Reduced rate (10%)	Unchanged -- food, children's goods, medicines, educational publications	Retained
Zero rate (0%)	Unchanged -- exports, international transport	Retained
Calculated rates	20/120 → 22/122 (10/110 unchanged)	1 January 2026
УСН VAT exemption threshold	Reduced to RUB 20,000,000 (from RUB 60,000,000); further reductions: RUB 15M (2027), RUB 10M (from 2028)	1 January 2026
УСН special rates 5% / 7%	5% for income RUB 20m-272.5m; 7% for RUB 272.5m-490.5m; both WITHOUT input credit. Or standard 22%/10%/0% WITH credit.	1 January 2026
Banking VAT exemptions	Certain banking services (acquiring, processing, some payment services) now subject to 22% НДС	1 January 2026
Software exemption	VAT exemption for rights to Russian software (Reestr) retained	Retained
SME transition support	First-year opt-out of reduced rate; leniency on first missed declaration for newly-liable УСН payers	2026

Historical note: the standard rate was 18% before 2019, 20% from 1 January 2019 (Law 303-FZ), and 22% from 1 January 2026 (Law 425-FZ).

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Contribution Notes

This skill requires validation by a licensed Russian tax practitioner (nalogovyy konsul'tant or auditor). Given the rapidly evolving sanctions environment and frequent legislative changes, this skill should be re-validated at least annually.

Key areas requiring local expertise:

1. Current sanctions applicability and their NDS impact
2. Updated USN thresholds and special regime parameters
3. FNS administrative practices and audit triggers
4. EAEU protocol amendments
5. Digital services registry (Article 174.2) updates

A skill may not be published without sign-off from a qualified practitioner in the relevant jurisdiction.

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Disclaimer

Quality tier: Research-verified — pending sign-off by a Russian accountant. This 2026 update was verified against the Federal Tax Service (ФНС, nalog.gov.ru) and reputable secondary sources, but has not yet been signed off by a qualified Russian accountant (nalogovyy konsul'tant / auditor). It must not be relied upon for filing until that sign-off is obtained.

This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional (a licensed Russian tax practitioner for Russian НДS matters, or an equivalent licensed practitioner in your jurisdiction) before filing or acting upon. Given the rapidly evolving sanctions environment, cross-border transactions require additional sanctions-compliance review.

The most up-to-date, verified version of this skill is maintained at openaccountants.com. Log in to access the latest version, request a professional review from a licensed accountant, and track updates as tax law changes.