VAT Deferral on Imports: Who Will Truly Benefit and What Savings to Expect

RBC PRO writes that major importers have been granted the right to pay VAT at customs with a deferral of up to three months.

On 20 April, Russian President Vladimir Putin signed Executive Order No. 263 On Additional Measures to Enhance the Sustainable Development of the Russian Economy. The Order launches a pilot scheme allowing a deferral of VAT payment on goods imported into Russia from countries outside the Eurasian Economic Union (EAEU). The scheme’s participants — large entities included in the register of authorised economic operators (AEOs) and the list of systemically important organisations — will be able to defer VAT payment at customs for up to three months without interest.

Eduard Giulbasarov, Partner at FBK Legal, sees the VAT deferral on imports as a positive measure amid the growing fiscal burden on businesses.

Meanwhile, in his comment to RBC PRO, he points out that the VAT deferral on imports is still a beneficial mechanism, despite the mandatory use of a bank guarantee:

‘The average bank commission for providing a bank guarantee is 2-3%. Even taking these costs into account, the deferral remains advantageous: the freed-up funds can be placed on deposit, and at current interest rates, a deposit remains an effective instrument’.

Eduard Giulbasarov also gives an insight into a possible reason why the benefit being introduced applies to a small number of participants:

‘Testing on large organisations is standard practice: similar support measures were applied during the COVID-19 pandemic. Extending the deferral to all foreign trade participants at once would create a significant administrative burden on customs authorities and would inevitably result in numerous disputes’.