Image module
On 19/05/2022 the Linnikov & Partners team learned about the pending intention of the Ministry of Finance of Russia to propose abolition of the value added tax (VAT) on purchase of diamonds. According to media reports, the initiative of the Ministry of Finance is motivated by the intention to support Russia’s largest diamond mining company – ALROSA, which strains under the pressure of EU and US sanctions, as well as to offer new savings’ and capital growth opportunity to private investors.
Leonid Karpov, one of the leaders of the L&P banking and finance practice group, shares his view of the initiative of the financial authority: “I don’t exclude that the novella, proposed by the Ministry of finance will positively affect the private investment market by drawing interest to a new kind of investment – purchase of “investment diamonds”. It would also provide an additional stimulus for growth of the productive output of the diamond mining industry. However, I’d like to emphasize that gems are a highly complex subject matter. Definition of properties, relevant certification and appraisal of diamonds require superb technical expertise and knowledge in the field of gemology. Besides, pricing on the gems’ market is complex, volatile and not transparent for an ordinary investor. I suppose that these factors render diamonds substantially less attractive as an investment or savings asset comparing to, for instance, gold”.
In April, 2022 Alexander Linnikov commented on similar amendments to the Tax Code of the Russian Federation that abolished VAT on transactions of sale of measured ingots of gold (so-called investment gold) by banks to individuals:
div#stuning-header .dfd-stuning-header-bg-container {background-color: #5b80b0;background-size: initial;background-position: top center;background-attachment: initial;background-repeat: no-repeat;}#stuning-header {min-height: 300px;}