Method of putting VAT on primary agricultural products will be modified

The value added tax (VAT) will be put according to the selling price of the agricultural products not their cost price as at present, Info-Prim Neo reports, quoting a bill with amendments to the Tax Code approved by the Government. According to Minister of Finance Veaceslav Negruta, this regime will apply only to the own primary agricultural products supplied by economic entities, regardless of their legal form of organization, both on the home and foreign markets. At the same time, the value of the primary agricultural products supplied must not be lower than the market value. The minister said the modification of the method of putting VAT on the primary agricultural products will stimulate the producing companies, which will incur lower costs. The mechanism of refunding the VAT for exported goods will be also changed. The VAT will be refunded within the limits of the standard rate of 20% and the reduced rate of 8%, depending on the VAT rate put on the related purchases. Negruta explained that this will allow setting equal fiscal principles for every VAT regime and reducing the risk of appearance of phantom companies that act as intermediaries and offer the processing companies the right to use the VAT of 20%.