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In the absence of currency, Russians are switching to settlements in gold bars

Russian President Putin signed a law on the abolition of VAT on investment gold for individuals in order to stimulate the settlements by individuals in precious metals amid high inflation and a shortage of foreign currency.

The text of the law is published on the official portal of legal information.

The law exempts from VAT transactions involving selling precious metals bars withdrawn from depositories to individuals by credit institutions. This applies to all transactions starting March 1, 2022. Therefore, the law is retroactive.

Previously, the purchase of precious metals by citizens of the Russian Federation was subject to VAT at a rate of 20%, with the exception of coins. VAT also applied to bars withdrawn from the bank's depositories.

The explanatory note to the law states that such a system is the main obstacle to the use of precious metals by citizens as an investment tool and de-dollarization of the economy.

Recall that the Bank of Russia has restricted Russians’ access to cash foreign currency. The Central Bank of the Russian Federation has imposed a temporary procedure for withdrawing funds from foreign currency deposits or accounts of citizens. A ban is imposed on withdrawing more than $10,000 from foreign currency deposits. It will be possible to withdraw even more funds, but the rest of the money will be paid in rubles at the exchange rate on the day of withdrawal.

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