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Russia bars e-retailers from patent VAT regime

  • Feb 5, 2014 | Richard Asquith

Russia bars e-retailers from patent VAT regime

The Ministry of Finance has confirmed that online retailers may not apply for the simplified, patent system of tax reporting.

Russian patent tax accounting

The Russian patent system was introduced at the start of 2013.  It enables smaller taxable businesses to produce reduce Russian VAT reporting and where they were suffering a single imputed income tax under the old system being phased out by 2018.  It instead charges a flat 6% tax on turnover, and eligible businesses do not have to maintain the same accounting registers or till receipts.

The conditions to apply for the patent system are:

  • Fifteen or less employees
  • Less than RUB 60 million but more than RUB 100,000 annual turnover
  • Operating in local retail, catering or cleaning sectors

The Russian Ministry of Finance has now reported that the online reach of e-retailing puts such businesses out of the scope of the patent system – which was only intended for small sites and local regions.  Aside from online sales, the Ministry also ruled out print catalogue, teleshopping and telesales companies from the scheme.

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He can be contacted at: He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.