Russia: Government clarifies changes on VAT Treatment for Digital Services
Federal Tax Service of Russia released online Letter No. SD-4-3/10308, which amends the VAT laws applicable to cross-border sales of electronic services beginning in October.
The Russian Tax Authority prepared an amendment clarifying the changes of VAT Treatment to transactions that involve digital services by foreign organizations. There are certain measures upon the application of VAT on services being delivered via electronics.
The following clarifications were made:
- Foreign companies and their intermediaries that offer digital services to customers in Russia must calculate and pay VAT independently starting October 1.
- Tax agents should calculate and pay VAT for foreign companies that provide digital services to Russian businesses and entrepreneurs.
- Buyers of non-digital services offered by foreign companies within Russia are required to compute, withhold, and pay VAT.
- VAT paid for services rendered by a foreign firm registered after October 1 may be deducted by the service buyer.
Source: nalog.gov.ru
