Russian VAT rates and VAT compliance

Russia operates a VAT system aligned with international VAT/GST principles. Russian VAT is administered by the Federal Tax Service (Federalnaya nalogovaya sluzhba – FNS).

Russia applies a standard VAT rate alongside reduced rates and zero-rating for specific goods and services.

Businesses registered for VAT in Russia must apply the correct VAT rate to taxable supplies and remit the tax to the Federal Tax Service by submitting periodic VAT returns.

Some supplies are exempt from VAT in Russia. These commonly include:

• Certain financial and insurance services
  
• Healthcare and medical services
• Education and vocational training
• Certain cultural and non-profit activities
• Residential rental of immovable property

Exempt supplies do not generate output VAT and generally do not allow recovery of input VAT related to those activities.

A VAT number is required for businesses carrying out taxable activities in Russia.

Russian-established businesses must register for VAT once taxable turnover exceeds RUB 2 million over three consecutive months. Below this threshold, businesses may qualify for a VAT exemption if they meet the relevant conditions and apply for it.

Non-established (foreign) businesses making taxable supplies in Russia must generally register for VAT from the first taxable supply where they are required to account for Russian VAT. There is no general turnover threshold for nonresidents.

Foreign suppliers of electronic services to Russian consumers must generally register and charge Russian VAT from the first supply.

Get more information on VAT registration in Russia.

VAT-registered businesses in Russia must file quarterly VAT returns.

Returns include output VAT on sales and recoverable input VAT on purchases.

All VAT returns must be submitted electronically through the Federal Tax Service system using a qualified digital signature.

Get more information on VAT returns in Russia.

Foreign businesses storing goods in Russia must consider VAT registration if those goods are held for sale.

Holding inventory in Russia for resale typically triggers VAT registration obligations. Imports into Russia may also trigger VAT registration, particularly where the foreign business acts as importer of record.

VAT is generally payable on the importation of goods into Russia.

• Import VAT is due at customs clearance.
• VAT-registered businesses may recover import VAT as input VAT if the goods are used for taxable activities.

Foreign businesses supplying digital services (telecommunications, broadcasting, and electronically supplied services) to Russian consumers must register for VAT and charge Russian VAT from the first taxable supply.

The standard VAT rate of 20% generally applies.

VAT-registered businesses in Russia may recover VAT incurred on taxable business expenses through their VAT returns by offsetting input VAT against output VAT.

Nonresident businesses generally need to be registered for VAT in Russia to recover input VAT.

Russia applies zero-rating to qualifying exports of goods and certain services supplied outside Russia. Zero-rating allows VAT to be charged at 0% while preserving the right to recover related input VAT, provided documentary requirements are met.

As a member of the Eurasian Economic Union (EAEU), Russia operates trade reporting requirements for goods moving between member states. Businesses may be required to submit statistical or customs reports depending on the transaction type.

• Supplier and customer details
• Tax identification numbers
• Description of goods or services
• VAT rate(s) and VAT amount

• Goods: VAT generally becomes chargeable when the goods are shipped or when the invoice is issued, whichever occurs first.

• Services: VAT is generally due when the service is supplied or when payment is received, depending on the circumstances.

• Imports: VAT is due at customs clearance.

VAT records must generally be retained for at least four years. VAT returns and payments follow the quarterly reporting cycle, with payments made in installments after the reporting period.