Bellerage

Russian VAT on e-services will cover B2B transactions

Russian VAT on e-services will cover B2B transactions

As of now, foreign suppliers of e-services without presence in Russia are not obliged to register for VAT purposes upon providing their services to Russian business customers (i.e. legal entities and individual entrepreneurs).

In this case, Russian business customers should act as tax agents and pay VAT by themselves (similar to the EU “reverse charge VAT” mechanism).

However, starting from 1 January 2019, foreign suppliers of B2B e-services will be obliged to register for VAT purposes in Russia, submit quarterly VAT returns and pay VAT to the budget. Russian customers will be entitled to deduct input VAT charged by foreign suppliers of e-services if they have the relevant package of supporting documents.