The government supports the abolition of double VAT for legal entities on the resale of used cars. In this respect said Alexei Podshchekoldin, Vice-President of the Russian Association of Automobile Dealers (ROAD), during a live broadcast on the association’s YouTube channel.
According to Poshchekoldin, the new curator of the automotive industry at the Ministry of Industry and Trade, Igor Boytsov, said that the Russian government supports the concept of replacing double VAT in the used car market in transactions involving legal entities. However, according to the ROAD vice-president, there is no ready document yet on the adoption of double VAT abolition.
In his presentation, Poshchekoldin noted that the legalization of the used car market will enable official dealers to enter the market with a volume of approximately 5 million units. It will also increase VAT and other tax revenues to the budget of the Russian Federation.
Last year, a bill was developed by the Federation Council to abolish the double VAT imposed on the resale of used cars between dealers, reported agency TASS.
Now primary VAT is already included in the cost of a new car sold for the first time. If a dealer buys a used car from one person, then it cannot sell the car to another legal entity at a real price. The fact is that in such a transaction the second person is obliged to pay VAT on the full cost of the car, in which case only VAT can be deducted from the margin of the legal entity, therefore double taxation occurs.
Previously reportedThat ROAD proposes to impose a fine of 1 million rubles for returning the mileage of cars.