LETTER OF THE MINISTRY OF FINANCE OF THE RUSSIAN FEDERATION, FEDERAL TAX SERVICE OF THE RUSSIAN FEDERATION

of December 13, 2012 No. ED-4-3/21230

About procedure for charge of the VAT

The Federal Tax Service concerning application of the value added tax when obtaining by bank of property of the debtor declared bankrupt in case of recognition cancelled the repeated biddings reports.

According to Item 4.1 of article 138 of the Federal Law of October 26, 2002 No. 127-FZ "About insolvency (bankruptcy)" in case of recognition cancelled the repeated biddings the competitive creditor according to the obligations provided with pledge of property of the debtor having the right to reserve pledge subject with assessment it in the amount ten percent lower than starting selling price at the repeated biddings.

If the bank for the purposes of calculation of the value added tax applies provisions of Item 5 of article 170 of the Tax Code of the Russian Federation (further - the Code), accounting of the value added tax shown to bank on acquired (received) property, depends on the purpose of its use.

So, according to Item 5 of article 170 of the Code banks have the right to include in the costs accepted to deduction in case of calculation of the income tax of the organizations, the tax amounts on value added paid to suppliers on acquired goods (works, services). At the same time all tax amount received by them on transactions, taxable is subject to payment in the budget.

By the subitem 5 of Item 2 of article 170 of the Code it is determined that the banks applying the specified accounting treatment for the value added tax, tax amount on goods purchased, including the fixed assets further realized prior to use for banking operations, leasing or before putting into operation consider in the cost of such goods, including fixed assets.

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