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When the organization of foreign exhibitions requires payment of VAT

The Finance Ministry specified whether it is necessary to pay VAT when a foreign company provides marketing services to an Russian company and organizes an exhibition in a foreign country for advertising purposes.

In a letter dated November 22, 2019 No. 03-07-08 / 90436, the department recalls that the procedure for determining the place of sale of works (services) for VAT purposes is established by Article 148 of the Tax Code of the Russian Federation.

According to the norms of subparagraph 4 of paragraph 1 of Article 148 of the Tax Code of the Russian Federation, the territory of Russia is recognized as the place of sale of marketing and advertising services if the buyer of such services operates in the territory of the Russian Federation.

Moreover, Article 3 of the Advertising Law (dated March 13, 2006 No. 38-ФЗ) refers to advertising information distributed in any way, in any form and using any means, addressed to an indefinite number of persons and aimed at drawing attention to the object of advertising, the formation or maintaining interest in him and his market promotion.

In this regard, marketing services and services for organizing an exhibition in a foreign country with the aim of advertising goods (works, services) provided by foreign firms of a Russian organization are subject to VAT in Russia.