resources-post-top-bg Russia changes VAT Rules for Non-resident Suppliers of Digital Services

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

30th April 2019: Russia has announced a change in VAT for B2B digital services.

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.


If you have any queries or you are worried that your business is not prepared, please contact our team for free bespoke advice.

Get updates into your inbox by subscribing to our blog!

See more Taxback International Articles

French Tax Office extends June VAT Deadline

14 May 2020: The 13th Directive June VAT deadline has now been extended from June 30 2020 to September 30 2020.

Maximise your VAT reclaims to boost your cash flow

11 May 2020: June 30th is the EU deadline for reclaiming all VAT from travel and expenses for 2019- are you ready?

Global VAT rate changes: April 2020

8th May 2020: A roundup of all the VAT rate changes announced by tax authorities last month.