Import of raw materials and components for manufacturing of medical devices exempted from VAT

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Federal Law No. 225-FZ on Amendments to Part Two of the Tax Code of the Russian Federation dated 30 June 2016 enters into force on 1 August 2016. According to the law, a VAT exemption is granted on import of raw materials and components of devices for which no analogues are manufactured in Russia and which are intended for the manufacturing of VAT exempt medical products. The list of such medical products is currently approved by RF Government Resolution No. 1042 of 30 September 2015.

This law sets up new rules for raw materials and components for assembly of medical products: on the one hand, the VAT exemption applies to any types of components, which need not be on the List (Resolution 1042 exempts only raw materials and supplies for making prosthetic and orthopedic appliances from VAT); however, on the other hand, this exemption will apply only to those components for which no analogues are manufactured in Russia.

Entitlement to VAT exemption needs to be confirmed by submitting to the customs authority a document evidencing: (1) the intended use of the raw materials and components and (2) that there are no Russian analogues. Such a document will be issued by the Ministry of Industry and Trade of Russia.