Russian hotels will be zeroed VAT for five years
The Russian government supported the zeroing of the VAT rate for organizations of the hotel and tourism sector for 5 years. This is for everyone, not just new hotels.
Deputy Prime Minister Dmitry Chernyshenko: “The government supported the introduction of a zero VAT rate for companies that invest in the creation of tourist facilities ... the rate will be valid for five years from the date of commissioning of these facilities, including after reconstruction.”
The draft federal law on VAT zeroing will be developed by the Ministry of Finance, Rosturizm, Ministry of Construction, its implementation is possible within the framework of the national project “Tourism and the hospitality industry”.
Currently, Russia has one of the highest VAT rates in the world for tourism and the hospitality industry – 20%. At the same time, in hotel organizations, 100% of the added value is formed directly in the organization, so the tax burden on the payment of VAT becomes comparable in fact with the turnover tax and is 30% of revenue at a rate in the tourism industry of 10.5%.
In Rosturizm believe that such a tax burden makes the industry not competitive compared to other sectors of the economy and not attractive enough for investors.
The decision taken by the Government to zero VAT for the hotel industry is the most long-awaited, breakthrough and important decision for the development of the industry in recent decades, which we have all been waiting for. This decision, along with the measures of the national tourism project, will make the industry more competitive, attract new investors and solve one of the key problems of Russian tourism – the acute shortage of modern quality hotels, says Zarina Doguzova, head of the Federal Tourism Agency.
She also explained that the zero VAT rate for five years will be not only for new, but also for existing facilities.
“In the current context, this is very positive news. Representatives of the hotel market have repeatedly spoken about the need to zero VAT, and we are glad that the measure is supported by the government, says Vadim Prasov from the Federation of Restaurateurs and Hoteliers of Russia.
Source: atorus