LETTER OF THE FEDERAL TAX SERVICE OF THE RUSSIAN FEDERATION

of May 22, 2014 No. State Duma-4-3/9950 @

About application of the value added tax concerning the services rendered by cultural institutions

The Federal Tax Service informs the explanation which arrived the letter of the Ministry of Finance of the Russian Federation of 19.03.2014 No. 03-07-15/11928 on application of the value added tax concerning the services rendered by cultural institutions sent to the address of the Ministry of Culture of the Russian Federation (the letter of the Ministry of Finance of the Russian Federation of 18.03.2014 No. 03-07-08/11698).

According to Item 1 of article 146 of the Tax Code of the Russian Federation (further - the Code) the taxation object the value added tax transactions on sales of goods (works, services) in the territory of the Russian Federation are recognized.

Based on the provisions of the subitem 3 of Item 1 and the subitem 3 of Item 1.1 of article 148 of the Code the place of rendering of services rendered in the sphere of culture and art it is determined depending on the place of the actual rendering services. With respect thereto the place of realization of the services in implementation of actions for preparation and carrying out concert programs rendered outside the territory of the Russian Federation, including the organizations which do not perform carrying out concert programs the territory of the Russian Federation is not recognized and, respectively, such services are not the taxation object the value added tax in the Russian Federation.

As for the services in implementation of actions for preparation and carrying out concert programs rendered in the territory of the Russian Federation, the place of realization of such services the territory of the Russian Federation is recognized, and they are assessed with the value added tax in generally established procedure.

Concerning the services in provision of rooms rendered by the Russian cultural institutions in the territory of the Russian Federation for holding concerts it is reported that according to the subitem 20 of Item 2 of article 149 of the Code in edition of the Federal Law of 23.07.2013 No. 215-FZ "About modification of Chapters 21 and 25 of part two of the Tax Code of the Russian Federation and separate legal acts of the Russian Federation", become effective since October 1, 2013, the value added tax is in the territory of the Russian Federation exempted from the taxation, in particular, rendered by the organizations performing activities in the sphere of culture and art, service in provision in lease of scenic and concert venues to other organizations performing these activities.

It is at the same time noted that according to subitem 4.1 of Item 2 of article 146 of the Code the taxation object the value added tax performance of works (rendering services) by state organizations, and also budget and autonomous institutions within the state (municipal) task which source of financial provision is the subsidy from the relevant budget of the budget system of the Russian Federation is not recognized.

Bring to subordinate tax authorities and taxpayers.

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