The explanations of the Arbitration Court do not clarify whether the zero tax rate applies only to agreements with joint service providers or whether a taxpayer may apply this rate in relation to separate agreements entered into at each stage of the transportation of the exported goods.

VAT paid in excess may be refunded only if the seller provides evidence that they refunded the tax paid in excess to the buyer. Clause 21 of the Resolution stipulates that if a taxpayer claims for tax paid in excess to be refunded from the budget and supports this claim by arguing that the relevant transaction was not taxable or should be taxed at a lower rate, the courts should check whether the amount paid to the state budget corresponds to the amount of tax which had been paid by the buyer in relation to the relevant transaction. Since this clause was introduced, declaring VAT means that tax is recorded separately in source documents and VAT invoices. The issue of whether VAT may be refunded from the state budget remains open, bearing in mind that the tax amount is not recorded separately when goods are sold to consumers for retail prices.

The right to deduct VAT in relation to future supplies arises if prepayment is made not only in cash but also in kind. Clause 23 of the Resolution deals with the resolution of disputes which involve tax deductions being made by a taxpayer who has paid for future supplies of goods and transfer of property rights. In such disputes, courts should take into consideration that Chapter 21 of the Code does not specify that in this case the right to deduct tax arises only when the price of the goods and the property rights is paid in monetary form. Therefore a taxpayer may not be deprived of their right to a tax deduction if they have paid in a timely manner for the goods and the property rights in kind.

Clause 26 of the Resolution clarifies the procedure for considering disputes involving lessors and lessees applying tax deductions. For instance the Arbitration Court clarified the matter as follows. If a lessee makes a capital investment in property being leased out and the investment takes the form lease payments as agreed by the parties, then the of lessee deducts the tax amounts charged to it on previously acquired goods and property rights, in accordance with the same procedure as the tax amounts that the lessors charge within the lease payments. If the lessee makes capital investments in a facility being leased out, in addition to the lease payments being made to the lessor, the lessee may deduct the tax amounts charged to it, as per the standard procedure, since for the purposes of Article 171 of the Tax Code it should be treated as a person acquiring goods for its own business activities. If the lessor reimburses the capital investments made the relevant integral improvements in the leased property should be deemed transferred to the lessor, who has paid for them. However the lessee should charge the amounts of tax previously deducted to the lessor pursuant to Article 168(1) of the Russian Tax Code. For their part the lessor, in their capacity as the owner of the facility being leased out and which has assumed the burden of capital investment, may either deduct the tax amounts as charged by the lessee or expense them when calculating profit tax.

Clause 27 of the Resolution construes Article 173(2) of the Tax Code concerning the period in which tax deductions should be declared. The Arbitration Court confirmed that since the above provision does not stipulate otherwise the taxpayer may record tax deductions in a tax return for any period which is part of the relevant three-year tax period. At the same time the court pointed out that a taxpayer should comply with the rule of Article 173(2) of the Tax Code that a tax return must be filed within a three year period, even if the taxpayer includes the relevant tax deductions in an updated tax return to be filed. The Court did not clarify the period starting from which the applicable three-year period should be counted (whether from the period in which transactions were performed or from the period in which all the conditions for making deductions were observed, the VAT invoices were received, the goods were booked, the relevant source documents were executed).

Pursuant to Article 3(1) of Federal Constitutional Law No. 8-FKZ ‘‘On amending the Federal Constitutional Law On Commercial (Arbitration) Courts in the Russian Federation’’ and Article 2ofthe Federal Constitutional Law ‘‘On the Supreme Court of the Russian Federation’’, the clarifications issued by the Plenum of the Russian Supreme Commercial (Arbitration) Court concerning the practice of Commercial (Arbitration) Courts enforcing laws and other regulations, remain in force until the Plenum of the Russian Supreme Court adopts any relevant decisions. Therefore the Resolution of the Plenum of the Russian Supreme Commercial (Arbitration) Court concerning VAT issues will remain in force until it is amended or overruled by the Plenum of the Russian Supreme Court. Multinationals and national corporations alike should further investigate these updates in order to remain compliant