“Peterland Denied Zero VAT Rate” — Valeria Dementyevskaya for Delovoy Peterburg
St. Petersburg LLC "Peterland Aqua-Spa" lost its dispute with the Ministry of Economic Development regarding the application of a zero VAT rate for the company.
The Tax Code currently provides for a zero VAT rate for two similar types of services with different conditions and application periods, notes Valeria Dementyevskaya, Tax Practice Advisor at Prime Advice Consulting Group.
First: leasing or providing tourist industry facilities - the zero rate can be applied for 5 years after the facility's commissioning, without the 2027 deadline limitation. However, the facility must be included in the Tourist Industry Facilities Register.
Second: providing temporary accommodation in hotels and other lodging facilities. Here, the zero rate application period depends on whether the hotel (or other lodging facility) is included in said Register. If the hotel is not included, the rate applies until July 30, 2027; if included - also for 5 years after commissioning.
Thus, having a newly built or reconstructed facility in the Register allows extending the zero VAT rate application period,
— adds Valeria Dementyevskaya.