Russia 2017 digital VAT law progresses

Sat 11th Jun 2016

The Bill to impose VAT on sales to Russian consumers of electronic services from foreign providers progressed to a third, and final reading in the Parliament. The plan is to implement the VAT law from 1 January 2017.

Highlights of the Bill include:

  • VAT will be levied at 18%
  • Foreign providers will have to register as non-resident tax payers
  • Reporting will be on a quarterly basis
  • The reverse charge will apply to B2B supplies, and thus no VAT due by the foreign provider

Determining the ordinary resident of a customer can be made by referece to:

  • Address of the customer
  • IP address
  • International dialing code
  • Credit card or other payment method address

Fees from electronic services subject to Russian VAT 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