The draft law On Introducing Changes to Article 150 of the Tax Code of the Russian Federation was submitted by the Ministry of Economic Development.
Under subclauses 16 and 161 of Clause 3 of Article 149 of the Tax Code of the Russian Federation, no VAT payments shall be charged on research and development projects implemented by educational institutions and research agencies under economic contracts, as well as on research and development projects aiming to create new products and technologies, if the above-mentioned agencies are called on to design engineering structures or to create new technologies and prototypes.
Federal Law No. 224-FZ of 26 November 2008 On Introducing Changes to Parts One and Two of the Tax Code of the Russian Federation and Specific Legislative Acts of the Russian Federation exempts production and technological equipment being imported to the Russian Federation, including related components and spare parts, from VAT payments. This concerns equipment whose equivalents are not manufactured in the Russian Federation.
The draft law calls for exempting all products, specifically expendable materials being imported to the Russian Federation for scientific research purposes, from VAT payments. This concerns those materials whose equivalents are not manufactured in the Russian Federation and which are included in a Government-approved list.
When approved, the draft law will reduce corporate outlays in the area of research and development and thus will help ensure the country’s innovative development.
The draft law was reviewed and approved at a Government meeting on 19 December 2013.
