VAT refunds and refunds when exporting goods

ETK is ready to assist in export deliveries and is willing to refund up to 50% of VAT on the transaction.

VAT in export transactions is a complex subject and a constant source of problems for exporting companies. VAT is an indirect tax that is levied on all services and goods. For refunds, deductions and returns, VAT in the Russian Federation on exports can be at one of two rates - 10% and 20%.

The problem of export VAT refunds arises due to incorrect accounting, customs and authorization documentation. Refusal of export VAT refunds will follow if at least one in the chain of suppliers, of whom the exporter may not even be aware, fails to report his activities during desk audits with the Russian tax authorities. In such a situation, the risk of not receiving a refund is high, which is often the bulk of the profit in exports.

The second reason for problems can be waiting too long for a decision from the regulatory authorities. The minimum time for a VAT refund is 180 days. If an error is detected in a report or other issues arise on the part of the tax office, the time limit for processing the refund is extended by another quarter.

Conducting a desk audit for a VAT refund

The tax inspection authorities check all activities of the company for the quarter in which the application for export VAT refund is submitted. It is carried out within three months of the submission of the tax return. If no irregularities are found during the inspection, the tax office takes a decision on the VAT refund within 10 days and within another 5 days the Federal Treasury transfers the refund to the company's bank account.

If the desk audit finds any contradictions, another additional desk audit will be scheduled. This will include a number of activities related to tax control. An example would be a visit to a company by a tax inspector to inspect assets, as well as to interview witnesses. If violations are found, the company will have to pay a fine, which includes tax and penalties. The VAT refund is then cancelled and the Exporter suffers a loss.

In order to simplify tax formalities when exporting goods and to avoid a desk audit by the tax inspectorate, it is sufficient to conclude a contract with the ETC company for a "contract holder" service. The company's many years' experience of exporting will enable it to take all the risks of non-recovery and help the exporter avoid problems. It will refund the VAT immediately on the day of the export transaction.