In accordance with the Tax Code, a legal entity or an individual entrepreneur is recognized as a VAT tax agent in the following cases: 1) if it purchases goods, works, services from a foreign entity not registered as a taxpayer in Russia, with the aim of their subsequent sale in Russian territory. 2) carries out operations such as rent, purchase, transfer of property belonging to the state authorities of the Russian Federation.
The list of cases when the buyer must pay VAT as a tax agent is established by the Tax Code. One of the attractive cases is the purchase of goods, works, services from a foreign seller. Also, when buying electronic services from a foreign organization, VAT is paid in a special manner – by the foreign organization itself.
Since at present, due to the 2022 sanctions, these suppliers may have difficulty transferring VAT to the Russian budget, the Federal Tax Service recommends that Russian buyers, companies, and individual entrepreneurs do this.
The Federal Tax Service recommended that Russian organizations and individual entrepreneurs buying electronic services from foreign companies independently withhold and pay VAT on the amounts of transferred payments.
At the same time, if the buyer of these services or goods independently paid VAT to the budget and accepted it for deduction, then the tax authorities are not entitled to require a foreign organization to re-pay VAT and reflect such operations in the VAT return. Also, the tax authorities have no reason to require the recalculation of the buyer’s tax liabilities (calculated tax, tax deduction or the amount of tax included in the price (in expenses)).
At the same time, the Federal Tax Service recommends that Russian organizations and individual entrepreneurs inform foreign counterparties about the performance of the function of a VAT tax agent and the independent payment of tax to the budget.