30.04.2018

Russia changes VAT Rules for Non-resident Suppliers of Digital Services

Russia has annoucned a change in VAT for B2B digtal services.

russia vat

From 1st January 2019, non-resident suppliers of B2B (business-to-business) electronically supplied services will need to register with the Federal Tax Service in Russia, accounting for any VAT owed.

Currently, the Russian business customer collects and remits the standard rate of VAT of 18% to the tax authorities through the reverse charge mechanism. This will now be removed.

Since 2017, foreign providers of electronically supplied services to private individuals in Russia (B2C), must register for tax in Russia and charge VAT at the standard 15.25% rate. Federal Law No. 335-FZ of 27th November 2017, expands the scope of these VAT rules, including B2B supplies.  The registration requirement is triggered once the sales of digital services to the value of RUB 1 is made.

The impacted services include, amongst others, the provision of databases, web-hosting services, search engines, access to social networks, streaming of music and film, and gaming.

Foreign businesses are required to register by 15th February 2019, via the Federal Tax Service’s portal for online service providers. VAT returns and payments will now be due on a quarterly basis by the 25th day of the month following the reporting period. Russian businesses and private entrepreneurs will be able to reclaim their input VAT.  Registration is still mandatory for foreign providers of VAT exempt supplies such as software licences.

Looking to reclaim on your business travel expenses? Get in touch with us today! If you're reclaiming from the EU, you have until June 30th to do so!

Don't miss your deadline!

We know that Indirect taxes such as VAT and GST can have a huge effect on your business. As VAT rates change sporadically keeping yourself informed can be difficult.  Compliance is always crucial. That’s why our Indirect Tax Experts share their hand-picked news stories every day that you need to know. From breaking news to VAT changes and new EU legislation. We know that relevant information means better decision making. We aim to be your number 1 source for VAT and GST news.

Call Taxback Internatinoal  +353 56 778 34 00      

Email Taxback International   vat@taxbackinternational.com 

Connect with TBI on Twitter  Connect with us on Twitter

Connect with TBI on LinkIn  Connect with us on LinkedIn

 

 

 

Find what you're looking for!

see all