Update: Russian Government imposes VAT on the supply of e-services

29 June 2016

The Russian Government has now passed the third and final bill which imposes the charge of VAT at 18% on the sales of e-services to consumers in Russia.

At present, non-resident businesses providing digital services in Russia do not have to charge VAT on their sales. However, in an effort to remove the unfair advantage given to non-resident companies over Russian resident providers, the Russian Federal Council approved this bill which now confirms that VAT at 18% will be applied on these types of transactions from 1 January 2017.

This new tax will be applied to a range of electronic services including streaming games, music, apps, films, e-books, e-journals and internet services.