Russia B2B e-services VAT easement
- May 12, 2019 | Richard Asquith
Russia is to allow B2B customers of non-resident providers of digital services to withhold VAT payments. This relieves the cash collection and remittance obligation of the provider, although they must remain Russian VAT registered.
Russia imposed B2B VAT registration and collections on foreign providers of e-services at the start of 2019. This departs from almost all other countries’ VAT treatment of B2B digital services. Prior to 2019, the Russian business recorded the transaction with no cash payment.
The Russian Federal Tax Service is now allowing businesses' customers the option to withhold the VAT, pay to the tax office and then recover the payment as a deduction in their next VAT return.
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