Providers of e-services

If a foreign company (intermediary company) provides B2C electronic services to Russian individuals, it shall be registered with the Russian Tax authorities as a VAT payer and calculate and pay VAT in Russia for these electronic services.

From 01 January 2019 till 01 October 2022, in the case of providing B2B electronic services, foreign companies were obliged to be registered with the Tax authorities for VAT purposes, too.

However, starting in October 2022, if the foreign company provides electronic services to a Russian legal entity, this Russian legal entity should withhold and pay VAT instead of a foreign company as a tax agent.

The complete list of VATable online services is set by Article 174.2 of the Russian Tax Code.

An e-services professional working with a laptop, smartphone and headset

The list includes but is not limited to, providing software, games, music, e-books, online cinema, advertisements, domain names, hosting, website, webpage support, trading platforms, search engines, social networks, etc.

There is a VAT office for e-service providers on the official website of the Russian Tax Authorities, where the company can register as a provider of E-services. After the company provides all necessary data, the Tax office will arrange access to the Online Personal Account within 30 working days and notify by contact e-mail.

For e-services to be rendered and paid from 01.01.2019, the effective VAT rate of 16,67 % (20/120 %) shall be applied. For example, if the company sold in tax period e-books to individuals at 5,000 USD, then the VAT to be paid will be 833.5 USD (5,000*20/120%).

E-services foreign providers should submit VAT tax returns no later than the 25th of the month following the reporting quarter. The VAT should be paid no later than the 28th of the month following the reporting quarter.

All payment details are available in the Online Personal Account.

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