RUSSIA - Change of VAT treatment of electronic services rendered by foreign suppliers

12 December 2018
Russia News


Effective 1 January 2019, foreign suppliers of electronic services to Russian sole traders and businesses (“B2B services”) will have to register for VAT in Russia and pay tax upon such services by themselves. The place of supply of B2B services is determined as the place of customer’s business.

The new rules should also be applied to intragroup electronic services i.e. IT services rendered by a foreign group company in favour of a Russian company

VAT registration is mandated for the foreign entities that meet all of the criteria below:

  • a)The services are supplied in Russia
  • b)The services are supplied without intermediaries that make settlements with the buyers
  • c)Have no prior registration as a B2C service provider

European Union: Agreement reached between the EU and UK.

The EU and United Kingdom have reached a deal on the Article 50 Withdrawal Agreement.

According to Article 51 Value added tax (VAT) of the Withdrawal Agreement:

  1. Council Directive 2006/112/EC shall apply in respect of goods dispatched or transported from the territory of the United Kingdom to the territory of a Member State, and vice versa.
  2. Directive 2006/112/EC shall continue to apply until 5 years after the end of the transition period
  3. Refund applications that relate to VAT which was paid in a Member State by a taxable person established in the United Kingdom, or which was paid in the United Kingdom by a taxable person established in a Member State, shall be submitted under the conditions of that Directive at the latest on 31 March 2021.

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