Russia confirms international transport nil rated for VAT

Wed 30th Jul 2014

The Russian tax authorities have confirmed that the provision of international transport services are subject to nil rate VAT. This brings it into line with the European Union VAT Directive.

The Federal Tax Service confirmed the Value Added Tax treatment in Letter GD 4-3/1194. It clarifies that if the place of destination of the goods are outside of the Russian Federation, that it is outside the scope of Russian VAT. However, transporters may still recover any input VAT suffered in connection with the transport service.