Russian VAT Registration Regulations

From January 1, 2019, Russia will require non-resident providers of digital services to businesses to VAT register in Russia and charge VAT.

Russia already introduced VAT liabilities on offshore providers of electronic services to consumers in January 2017. For B2B transactions, the reverse charge was applied and the Russian taxpayer was responsible for reporting and paying the VAT. This simplification is now being removed by Federal Law No 335-FZ. Russian electronic services include:

  • Online gaming
  • Online software and automated support
  • Subscriptions to news and other content sites
  • Broadcast TV and radio
  • Online telephony and data services
  • Webhosting or online databases
  • Automated, online advertising services
  • Cloud or similar online data storage and memory
  • Automated domain name-related services
  • Excluded: internet access; consulting/advice services provided via email

The above means that suppliers of the above mentioned electronic services (for this purpose) should register for Russian VAT purposes. As a result, foreign companies selling electronic services to Russian companies and physical persons should calculate Russian VAT (at the rate of 15.25% of the value of the electronic services supplied), submit a VAT declaration and pay the VAT due on a quarterly basis. Of course, Taxperience would be happy to assist with the VAT registration in Russia, as well as taking care of the Russian VAT compliance.

For more information please contact Ernstjan Rutten or Vagif Mamedov at Taxperience.