Technological equipment imported to Russia has been exempt from Russian VAT in cases where it has been invested to the share capital of Russian company as contribution in kind. Under new regulations, the scope of the import VAT exemption has been extended. According to the new regulations there is no need to invest the equipment into share capital in order to utilise the exemption. The VAT exemption applies only if the respective type of the equipment (or equivalent) is not made in Russia and if the latter is included in the Resolution of the Russian Government № 372 of April 30, 2009.

The objective of the new regulations is to simplify the conditions for the exemption. The application procedure is less complicated in the new system. However, please note that the Resolution of the Russian Government No. 883 dated July 23, 1996 that provides for the separate application of the import customs duty concession on condition that the equipment is imported as an in-kind charter capital contribution of a Russian legal entity is still effective. Therefore, it may not be excluded that the equipment falling under the indicated VAT exemption may be subject to the respective import customs duty.

The classification and declaration of the imported equipment still present obstacles for Russian importers. Problematic issues include e.g. classification of the equipment when the equipment is imported disassembled in several shipments. Also, local Russian customs authorities may require the importer to provide a security for import customs duty and VAT, even though the indicated customs payments should not be payable. Moreover, the Russian customs authorities have in practice reserved the possibility to make the final decision on classification of goods.

Considering the above, Finnish companies exporting technological equipment into Russia are advised to seek local assistance in order to streamline the customs procedures and benefit from the VAT exemptions where applicable. Borenius & Kemppinen's Russian Desk in Finland and our partners in Russia (Pepeliaev, Goltsblat & Partners) are at your disposition in setting up and managing the customs clearance of the imported/exported equipment into / from Russia, including the following:

  • Planning the classification, transportation, customs clearance and certification of the equipment in question in order to avoid the respective problems;
  • Request of a preliminary classification decision of the Russian Federal Customs Service in order to ensure whether the classification codes can be applied with respect to the equipment in question;
  • Legal assistance in obtaining the required permissive documents;
  • Legal support on application of import customs duty concession with respect to the equipment imported as in-kind charter capital contribution (if the rate of import customs duty is more than zero);
  • Procedural assistance in case there are any problems with the Russian customs authorities;
  • Review the current rules in order to determine whether zero rates of import customs duty and VAT are applied with respect to the goods in question;
  • Assistance related to obtaining of the permissive documents (e.g. licenses, certificates, etc.) which should be submitted to the customs authorities.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.