Russian VAT registration

In Russia, the requirement to register for value-added tax (VAT) depends on whether the business is established in Russia and the nature of the taxable activities carried out.

For Russian-established businesses, VAT registration is generally required once taxable turnover exceeds RUB 2 million over three consecutive months. This is the statutory threshold under the Tax Code of the Russian Federation. Businesses below this threshold may be exempt from VAT if they meet the conditions for the small business exemption and formally apply for it.

There is no VAT registration threshold for nonresident businesses in the same way as for domestic entities. 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 (for example, certain digital services supplied to Russian consumers).

As Russia is not a member of the European Union, the EU One-Stop Shop (OSS) regime does not apply. Russia operates its own VAT regime for foreign suppliers of electronic services, which requires registration and VAT collection from the first taxable supply to Russian consumers.

Apart from the domestic threshold for Russian-established entities, VAT registration is typically mandatory once the relevant taxable activity is undertaken, particularly for nonresident or cross-border business models.

To register for VAT in Russia, applicants (resident or nonresident) typically need to provide:

• A completed VAT registration application submitted to the Federal Tax Service (FNS)
• Legal entity details: company name, legal form, country of incorporation, registered address, directors or managers
• Description of business activities and expected Russian taxable turnover
• Details of taxable supplies to be made in Russia
• Power of attorney for a local representative, where required (often necessary for nonresident businesses)
• Banking and contact details for VAT correspondence
• Supporting documentation demonstrating the nature of Russian activities (especially for nonresident applicants)

Applications are submitted to the Federal Tax Service, typically via its electronic systems. VAT registration should generally be completed before taxable supplies begin, as late registration may result in penalties or backdated VAT assessments.

Once approved, the tax authority issues a Russian VAT identification number. Registration timelines may vary depending on the completeness and complexity of the application.

• Structure: Based on the company’s Taxpayer Identification Number (INN) and registration code (KPP)

• Used for VAT reporting, invoicing, and interaction with the Russian tax authorities

After registering for VAT in Russia, businesses must comply with ongoing VAT obligations, including:

• Filing periodic VAT returns (generally quarterly)
• Charging and collecting Russian VAT at the applicable rates (standard rate 20%)
• Issuing VAT-compliant invoices (including electronic invoices where required)
• Maintaining VAT records and accounting documentation in line with Russian legislation
• Paying VAT due by the statutory deadlines

Failure to comply with Russian VAT requirements may result in penalties, interest charges, and enforcement action by the Federal Tax Service, particularly in cases of late registration, incorrect filings, or unpaid VAT liabilities.