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The Ministry of Finance explained why the issue of a work book to an employee is subject to VAT

The Ministry of Finance of Russia specified the need for calculating VAT when issuing employees work books and work book inserts.

The Office recognized (letter of 07/16/2019 No. 03-07-09/52577) that the issuance of work books and inserts to employees is a sale and, therefore, subject to VAT.

In accordance with Art. 65 of the Labor Code of the Russian Federation when concluding an employment contract for the first time, a work book is executed by the employer. When an employee issues a work book, the employer charges him a fee, the amount of which is determined by the amount of expenses for their acquisition.

On the date the workbook is handed over to the employee, the employer must charge VAT on the purchase price of the work book. The operation itself to issue a work book is reflected in the sales book. This is necessary to compensate for the amount of VAT when selling goods to an individual. An employee is not a VAT payer. Therefore, when issuing a work book, the employer draws up an invoice in one copy and registers it in the sales book.