Russia B2B e-services VAT simplification

12 June 2019

From 1 January 2019, Russia has amended its current VAT legislation to state that non-resident businesses selling digital services to businesses in Russia have to VAT register and charge VAT on their supplies.

However, the Russian tax authorities have now confirmed that the business customers in the transaction can withhold the VAT payments and submit this to the tax authorities directly. This will mean that the supplier will not need to receive and remit the VAT payments to the tax authorities, but they must still remain VAT registered and submit VAT returns.

This VAT treatment applies to a range of electronic services including streaming games, music, apps, films, e-books, e-journals and internet services.