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Russia imposes VAT on B2B foreign digital services

  • Dec 28, 2017 | Richard Asquith

Russia imposes VAT on B2B foreign digital services

From 1 January 2019, Russia will require non-resident providers of digital services to businesses to VAT register in Russia and charge VAT.

Russia introduced VAT liabilities on offshore providers of electronic services to consumers in January 2017. For B2B transactions, the reverse charge was applied and the Russian taxpayer was responsible for reporting the VAT with no cash payment. This simplification is now being removed by Federal Law No 335-FZ.

Russian electronic services include:

  • Online gaming
  • Online software and automated support
  • Subscriptions to news and other content sites
  • Broadcast TV and radio
  • Online telephony and data services
  • Webhosting or online databases
  • Automated, online advertising services
  • Cloud or similar online data storage and memory
  • Automated domain name-related services
  • Excluded: internet access; consulting/advice services provided via email

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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: richard.asquith@avalara.com. He is part of the European leadership team which won International Tax Review's 2019 Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.