VAT on treated corn and sunflower seeds in the Russian Federation: new amendment and consequences

VAT on treated corn and sunflower seeds will be 10%, according to the new amendment to the Tax Code, adopted by the State Duma in the second and third readings. This preferential rate will remain in effect until 2029.

Earlier, the National Seed Alliance appealed to the Ministry of Agriculture of the Russian Federation, warning about possible bankruptcies of about 50% of seed companies involved in the breeding of sunflower, corn and soybeans, as well as 70% of their dealers, if VAT is additionally charged at a rate of 20%. This became possible after the Supreme Court of the Russian Federation ruled that treated sunflower and corn seeds treated with chemical or biological agents should be subject to VAT at a rate of 20% upon their sale. The reason is that such seeds are not intended for direct food production or processing and are not intended for food or other consumer needs.