According to the Russian tax law, certain types of industrial equipment have customs privilege – they are exempt from value added tax (customs VAT) when imported into the Russian Federation.
This privilege is provided for in the Russian Tax Code, in Article 150 “Importation of goods into the Russian Federation and other territories under its jurisdiction, not subject to
taxation (exempt from taxation)”. According to the specified article,
“... importation of ... technological equipment (including components and spare parts for it), the analogues of which are not produced in the Russian Federation, is not subject to taxation,
according to the list approved by the Government of the Russian Federation; ...”
So, this privilege (exempt from customs VAT) applies exclusively to industrial equipment that is included in the government list of “Technological equipment (including components
and spare parts for it), the analogues of which are not produced in the Russian Federation, the import of which into the Russian Federation is not subject to value added tax”.
Please note that this list does change over time – some new types of equipment are added, some other types are excluded from the list. Therefore, before making a decision on the
purchase of equipment for the purpose of its subsequent import into Russia, it is advisable to check the current version of the list for accurate estimation of possible customs clearance costs.
In Russia customs duties and taxes on imported equipment are calculated based mostly on its market value.
Determination of market value for customs clearance of highly specialized, unique and rare imported equipment might not be an easy and straightforward task, because it is often difficult
to find market price information for such equipment. This is also true for used equipment, whose value depends heavily on the degree of wear and tear and might be significantly less
than market value of the new analogues.
One of the possible ways to prove the compliance of the declared value of imported equipment with its market value at the date of customs clearance is to have the subject equipment
independently appraised and submit valuation report to the customs as proof of the market value. In accordance with the Russian civil law, the valuation report, signed by an
independent professional valuer, has status of a document of evidential significance and therefore can be used for confirmation of the market value of imported goods.
We have been providing machinery and equipment valuation services for our clients in Russia and internationally for more than 20 years. For a detailed consultation on valuation
procedure, please contact us.
More about machinery and equipment valuation in Russia…
Depending on the type of imported equipment, the above list of information and documents may be reduced or expanded after our detailed review of the valuation assignment.