Increase in a Rate of the VAT: Influence on Payments on Rent of the Trade Real Estate
The deputy commercial director of FORTGROUP Darya Sizykh has estimated influence of the forthcoming increase in a base rate of a value added tax to expenses of tenants of rooms in shopping malls.
"The sum of rent payment, after increase in a rate of the VAT, will depend directly on terms of the contract. For example, if the contract has provided that the rental rate includes the VAT without indication of his size, and there are no conditions about revision of the general payment in connection with tax changes in the legislation, then the rent won't change. At the same time the income of the lessor after payment of the VAT will be reduced — Darya Sizykh has commented. — If the VAT goes over a rental rate, then the tenant should increase the general payment by 1,7%, however the VAT paid by the tenant will be shown further to compensation from the budget regularly. Thus, it won't exert impact on the final cost of rent cleaned from the VAT. Increase in the VAT will be felt, first of all, by the end user".
According to the Bank of Russia, increase in a base rate of the VAT for two percentage points (from 18 to 20%) from next year will exert impact on the general rate of inflation in Russia within one percentage point.
