“Vedomosti”: The Ministry of Economic Development has offered incentives for companies on VAT They are offered to be exempted from VAT when transferring goods to non-profit organizations (NPO).
The initiative belongs to Deputy Minister of Economic Development Tatiana Ilyushnikova, who sent a letter to Deputy Prime Minister Tatiana Golikova. We are talking about socially significant goods donated for use by NPOs. Their value should not exceed one percent of the donor's annual revenue. Only in this case he will be able to count on exemption from VAT.
Current legislation provides for exemption from VAT when goods are transferred directly to those in need, without the mediation of NPOs. In addition, from 2020, companies can reduce the income tax base by the amount of donations and the cost of goods donated to NPOs, taking them into account as expenses.
Ilyushnikova's letter says that after last year's changes to the Tax Code it has become more profitable for companies to donate money to charity than to donate goods. Also, the current rules make the disposal of goods with an expiring date more preferable for business – due to the need to incur additional costs in the form of VAT on goods that are not actually sold. The initiative, according to the Deputy Minister, should change the situation.