Russia: VAT on the E-Services

Rome, 19 February 2019 – A series of amendments to the Tax Code of the Russian Federation were introduced by the Law n. 335-FZ dated November 27, 2017, including the amendments to the art. 174.2 paragraph 3, in force from January 1, 2019.

With above mentioned amendments a new tax regime is provide for the services rendered by foreign entities in electronic form (via the Internet, such as streaming music, films, gaming services, domain names, hosting, website and webpage support, etc.) listed in paragraph 1 of art. 174.2 of the Tax Code of the Russian Federation (E-Services).

In fact, starting from January 1, 2019 foreign organizations providing E-Services to the territory of the Russian Federation (to the residents in Russian territory) are obliged to:

  • register with the tax authorities of the Russian Federation;
  • independently perform the calculation and payment of the Russian VAT relating to the E-Services;
  • submit the relevant tax declarations to the tax authorities of the Russian Federation.

The foreign organizations could register online via VAT OFFICE FOR ONLINE SERVICE PROVIDERS (https://lkioreg.nalog.ru/en), available also in English language.

Previously, the foreign organizations can take online test to find out whether the organization is subject to registration with Russian tax authorities.

For the purpose of registration with the Russian tax authorities, the foreign organization will have to fill out the form and attached a scanned copy of the Chamber of Commerce certificate or other document certifying the incorporation of the company. The translation and legalization of the certificate / document is not required.

For E-Services to be rendered and paid from January 1, 2019 the effective VAT rate of 16,67 % shall be applied.

 

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