VAT in Russia
Who must pay VAT in Russia?
All business entities, such as corporations and limited liability companies, either domestic or foreign, as well as self-employed individuals must pay VAT when they sell goods or provide services that are recognized as VAT taxable supply.
VAT taxable supply in Russia
The supply of goods or services is subject to VAT if such supply is made in Russia by a taxable entity and is not specifically exempted.
What are these specific types of services?
Please keep in mind that if a foreign company provides certain cross-border services to Russian customers, the foreign company will be required to pay 18% VAT in Russia. Such services are as follows:
- Patent, copyright, trademark and other intellectual property licensing;
- Software and database development, adaptation and modification;
- Legal services;
- Information services;
- Research and development (R&D);
- Leasing of movable property, except motor vehicles.
Is any supply exempt from VAT?
Yes. About 60 transactions are not subject to VAT. For example, the provision of medical services and equipment or bank transactions are not subject to VAT. A list of these transactions is provided in Article 149 of the Russian Tax Code.
What are the VAT rates in Russia?
There are 3 VAT rates in Russia:
- a standard rate, currently 18% (from 01 January, 2019 on – 20%)
- a reduced rate, currently 10%. For instance, goods for children, foodstuff and drugs are subject to this reduced rate.
- a zero rate for export.
When are VAT returns and payments due?
VAT returns should be submitted quarterly by the 25th of the month following the end of a quarter.
The VAT declared in a quarterly return is then paid in equal monthly installments in the following quarter.
How can Accountor help?
Our tax experts would be pleased to give detailed advice on VAT, draft a memorandum or help devising an overall tax plan for your company. Over the years, we have gained extensive experience, working with foreign companies in Russia, including Fortune 500 companies, so please feel free to contact us if you need any tax advice.
- 13.11.2017: Agent VAT upon payments to foreign companies in Russia
- 18.12.2018: VAT increase up to 20%. What needs to be done?
- 28.12.2018: VAT for e-services provided by foreign companies
- 28.09.2020 Tax relief for IT companies in Russia
- 29.09.2020 Changes in VAT relief for foreign companies in 2021