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Pepeliaev Group advises that it is planned to introduce a national tracking system starting from 1 January 2021: a draft law to this effect [1]has been put before the State Duma.
The new system will apply to goods imported into the Russian Federation. The list of goods will be approved by a special Resolution of the Russian Government. For instance, an experiment is currently being conducted[2] with the following categories of goods:
Just like the labelling system, the tracking system has been designed to control the flow of goods. Yet, there are a few significant distinctions. For instance, the fundamental principle behind the tracking system is not the labelling of goods, but the keeping of records of batches. The new system will be administered by the Federal Tax Service. The documents compiled within the tracking system may become the subject of examination during a desk audit of VAT returns.
A batch will be identified by the batch registration number (BRN). This number is formed as follows:
The tracking system will be based on the following principal documents:
The system suggests that an electronic document management system must be adopted by all participants of the system. The BRN will have to be stated in electronic VAT invoices. Taxpayers purchasing traceable goods will be obligated to check that the BRN for a batch of goods subject to tracking is correctly stated in the VAT invoice and/or shipping document and that it is correctly specified in the documents containing traceability details. The Federal Tax Service has already developed the check-up service.
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To ensure compliance with the new requirements it was initially planned to introduce a fine from 5% to 10% of the value of the corresponding goods. Yet, the business community managed to insist on less stringent measures of liability: the version of the draft law put before the State Duma provides for fixed fines of RUB 200 to RUB 1,000 for each non-submitted document. |
First of all, requirements need to be developed for implementing additional software or improving the configuration of current systems. It would also be prudent to introduce a document management system of legal significance.
It cannot be ruled out that there will be delays and system failures at first. If the company imports goods from the EAEU or has leftovers of goods that are subject to tracking, this should be borne in mind when contracts with business partners are concluded.
Pepeliaev Group’s lawyers will readily provide the legal support required in connection with the new regulations being applied and companies’ business processes being adjusted.
[1] Draft Law No. 991147-7 “On amending parts one and two of the Russian Tax Code (on creating a national tracking system for goods)”.
[2] Carried out in accordance with Resolution No. 807 of the Russian Government dated 25 June 2019 (as amended by Resolution No. 913 of the Russian Government dated 23 June 2020)