Clifford Chance

VAT on Electronically Supplied Services in Russia: Status and Prospects

24 December 2018

For almost two years now Russia has been applying VAT to B2C electronically supplied services ("e-services") and employs an online system of VAT registration, reporting, and payment for suppliers or intermediaries that do not have a presence in Russia.

However, from 1 January 2019 the rules applicable to cross-border B2C supply will also be extended to all B2B supplies of e-services. This change represents a departure from the approach in the analogous EU VAT rules and is likely to affect many foreign companies that may have no idea that they currently supply e-services to Russia.

In this note we provide an overview of the existing Russian VAT regime for e-services and explore potential consequences of the pending changes.

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