MOSCOW, June 16 (RAPSI) — The State Duma has adopted in the third and final reading a draft law exempting cafes and restaurants earning annually less than 2 billion rubles ($28 million) from paying VAT, according to the official website of the lower house of the Russian parliament. 

As established by the law, provision of catering services in restaurants, cafes, bars, fast food outlets, buffets, cafeterias, canteens, snack bars, stores’ culinary departments, including off-premise catering are exempted from taxation on the territory of the Russian Federation. Such entities will be exempted from VAT on condition that in the previous calendar year their total incomes did not exceed 2 billion rubles, the State Duma said in the statement. 

At the same time, taxpayers are obliged to withhold and pay VAT from their foreign suppliers of goods, works, or services.

Nevertheless, in accordance with the document, the sale of such products by culinary departments of organizations and individual retail entrepreneurs, as well as individual entrepreneurs engaged in procurement activities, are not to be defined as catering services.