Expedited VAT refund: from April 2022

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Beginning April 2022, all organizations and entrepreneurs will be able to return VAT from the budget before the end of the desk audit – in eight days instead of three months. To do this, we expanded the list of persons who have the right to refund VAT on a declarative basis – this is a measure to support Russian businesses associated with the 2022 sanctions.

The declarative procedure for VAT refunds allows, without waiting for the end of a desk audit, to return VAT “in advance” within 11 working days after the application is submitted, in the process of verification. Three options are possible here: the amount of compensation will be confirmed in full; confirm partially or recognized as unreasonably compensated.

Important conditions for VAT refund: not to be in the process of liquidation, reorganization, or bankruptcy; claim for reimbursement an amount not exceeding the number of insurance premiums paid in 2021 and four taxes: VAT, excises, income tax, mineral extraction tax (otherwise a bank guarantee or guarantee for the excess amount will be required).

To do this, you need to submit a VAT return and write an application. The tax authorities will return the money immediately, and after the end of the desk audit, they can adjust the amount and demand the return of part of the reimbursement with interest.

The new form of the VAT declaration provides for special lines for tax refunds in a declarative manner. Within five working days after the submission of the declaration, an application for VAT refund is submitted to the tax authority. It can be made in any form. In the application, you must specify the details of your account and indicate, if necessary, that the over-refunded VAT will be returned to the budget and interest paid.

Within five working days, the tax office will check whether you have met all the requirements, whether you have debts for taxes, penalties, and fines, and will accept one of the following either refund or refuse. If the decision of the inspectors is positive, they will send an order to the treasury for a tax refund. After that, the money will be credited to the account within five working days.

Based on the results of a tax audit, the inspectorate can confirm the reimbursement. She will report this within seven working days after the end of the verification.

But there is also the possibility of an unfavorable outcome: the tax authorities will change their mind and withdraw the VAT refund – in whole or in part.

Thus, an accelerated VAT refund in 2022 is possible, but it is necessary to determine all the risks and the possibility of charging additional interest.