Tax weightlessness

The President exempted the space industry from VAT

Space explorers are exempt from value added tax. President Vladimir Putin signed amendments to the Tax Code providing VAT benefits to enterprises producing and servicing space technology, as well as conducting research programs for monitoring objects and phenomena in outer space, including from Earth.

Russian space has previously enjoyed tax benefits; the current amendments only clarify the procedure for applying the zero percent VAT rate for taxpayers engaged in activities related to the development of near-Earth space. The tax base will no longer include funds received for upcoming deliveries of goods and work performed as part of space production. The provisions of the law apply to space technology, space objects, work performed in outer space, and space infrastructure objects that are subject to mandatory certification.

The law makes it easier for manufacturers to confirm the validity of applying a zero tax rate, and also removes difficulties in obtaining a deduction in circumstances where the taxpayer’s property is used in payments for purchased goods or services.

Exactly a year ago, imported goods for the space industry were exempt from VAT (more precisely, a zero rate was introduced for them) and customs duties. The law provided for exemption from duties and VAT on goods transported across borders as part of international cooperation in the field of exploration and use of outer space, as well as international agreements on space launch services.

It is curious that representatives of enterprises related to the space industry themselves knew nothing about the new amendments to the Tax Code and therefore have so far refused to comment to Vremya Novostei on how this will affect their work.

Irina SKLYAROVA