When calculating VAT, it is important to apply the correct rate. Using the wrong rate produces an incorrect tax amount and can cause problems during a tax audit. Here is a guide to which rate applies when.
When to Use the 20 % Rate
The standard VAT rate in Russia is 20 %. It applies to all goods and services that are not on the reduced-rate list.
Examples of goods and services at the 20 % rate:
- electronics and household appliances;
- construction materials;
- office rental;
- advertising services;
- software development.
When to Use the 10 % Rate
The reduced 10 % rate applies to a limited list of goods and services:
- food products (bread, milk, meat, fish);
- children's goods (clothing, shoes, toys);
- medicines and medical products;
- books, textbooks, periodicals;
- passenger transportation.
If the product is on the list — use 10 %. If not — 20 %.
Example 1: Extracting 20 % VAT from a Tax-Inclusive Sum
Amount with VAT: 144,000 ₽ Formula: VAT = Amount × 20 / 120
Calculation: 144,000 × 20 / 120 = 24,000 ₽ Amount without VAT: 144,000 − 24,000 = 120,000 ₽
Example 2: Adding 20 % VAT on Top
Amount without VAT: 100,000 ₽ Formula: VAT = Amount × 0.20
Calculation: 100,000 × 0.20 = 20,000 ₽ Amount with VAT: 100,000 + 20,000 = 120,000 ₽
Example 3: Extracting 10 % VAT from a Tax-Inclusive Sum
Amount with VAT: 110,000 ₽ (10 % rate) Formula: VAT = Amount × 10 / 110
Calculation: 110,000 × 10 / 110 = 10,000 ₽ Amount without VAT: 110,000 − 10,000 = 100,000 ₽
Example 4: Adding 10 % VAT on Top
Amount without VAT: 100,000 ₽ Formula: VAT = Amount × 0.10
Calculation: 100,000 × 0.10 = 10,000 ₽ Amount with VAT: 100,000 + 10,000 = 110,000 ₽
How Not to Confuse the Rates
If the product is not on the reduced-rate list — the rate is 20 %.
Real-World Difference on the Same Base Amount
Assume a product costs 100,000 ₽ without VAT.
At 20 % rate:
- VAT = 20,000 ₽
- Total = 120,000 ₽
At 10 % rate:
- VAT = 10,000 ₽
- Total = 110,000 ₽
The difference is 10,000 ₽. For large procurement orders, using the wrong rate leads to significant discrepancies.
FAQ
Can I apply the 10 % rate to any food product?
No. The list of products eligible for the reduced rate is limited. For example, delicatessen products (caviar, seafood) are taxed at 20 %.
What if my product is not on the 10 % list?
Use the 20 % rate. If in doubt, consult the official VAT guide or an accountant.
How do I verify the calculation?
Enter the amount in the VAT calculator with the correct rate. The calculator automatically applies formula 20/120 or 10/110 depending on the rate selected.
The calculator helps verify the calculation, but it does not replace accounting advice.
| Laptop | 20 % |
|---|---|
| Milk | 10 % |
| Construction materials | 20 % |
| Children's shoes | 10 % |
| Advertising services | 20 % |
| Medicine | 10 % |
| Office rental | 20 % |
| Book | 10 % |