Seed growers in Russia fear bankruptcy due to additional VAT charges

The total cost of producers and sellers of corn, sunflower and soybean seeds will amount to almost 19.2 billion rubles. in the event that they are charged additional VAT for three years due to an ambiguous interpretation of the VAT rate for seeding material, the National Seed Alliance (NSA) told Agroinvestor. This can lead to significant losses for organizations, since in addition to the “underpaid” tax, they will also be required to pay significant fines. This will destabilize the Russian market, and will also entail risks of falling production efficiency in the agricultural sector, the association warns. Seeds of wheat, corn, sugar beets, potatoes, and open-ground vegetables, according to government decree No. 908 of December 31, 2004, are included in the list of food products for the sale of which a preferential VAT rate of 10% instead of 20% is applied. At the end of 2019, changes were made to the document to allow the benefit to be applied only if the product is used for food ...