VAT Registration in Russia - 2022 Procedure
VAT Registration in Russia
Updated on Thursday 21st April 2022 Rate this article
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The value added tax (VAT) is one of the most important taxes in Russia. It is an indirect tax imposed on the sale and provision of goods, respectively services. The VAT is imposed by the seller to the final products and is paid by the buyer or consumer. While the buyer does not have any obligation towards the tax authorities in Russia, the companies producing and selling the goods and services are required to register for the value added tax.
Below, we explain the VAT registration procedure in Russia. Our law firm in Russia can help foreign investors in setting up a business in this country with the VAT registration process as part of the company incorporation procedure.
| Quick Facts | |
|---|---|
| We offer VAT registration services | Yes |
| Standard rate | 5% |
| Lower rates | 16.67% for foodstuff, certain children’s supplies, medicine, water |
| Who needs VAT registration | Companies with taxable supplies in Russia |
| Time frame for registration | Around 30 days |
| VAT for real estate transactions | 18% |
| Exemptions available | For: - IT and digital sectors, - individual entrepreneurs with turnover less than RUB 2 million in 3 months |
| Period for filing | Quarterly |
| VAT returns support | Yes |
| VAT refund | For non-resident companies registered in Russia |
| Local tax agent required | Yes |
| Who collects the VAT | - retailers, - manufacturers, - wholesalers |
| Documents for VAT registration | - certificate of incorporation, - standard forms |
| VAT number format | INN (ИНН) followed by 10 digits |
| VAT de-registration situations | When companies close their operations |
VAT legislation in Russia
The value added tax is one of the largest contributors to the Russian economy, as the local market is one of the largest in the world. The VAT is regulated by the Russian Tax Code, however, it was introduced later in the legislation, in 1992. Under the law, VAT registration is not a mandatory requirement for companies in Russia. Obtaining a VAT number is different for local and foreign companies operating in Russia. Even if there no minimum turnover that imposes VAT registration in Russia, the following activities can determine such a procedure. These activities refer to:
- the supply of goods and services worth more than 2 million RUB requires VAT registration for local companies;
- foreign companies must register for VAT if they deliver goods or supply services in Russia;
- import and export of goods also requires obtaining a VAT number in Russia for both local and foreign companies;
- e-service providers are also subject to VAT registration requirements in Russia.
It is important to note that several tax regulations have changed in 2019 and also in 2020, some of them targeting the value added tax. Foreign investors who want to open companies in 2022 in Russia can obtain more information on the VAT registration requirements from our Russian lawyers.
Steps for VAT registration in Russia
The procedure of obtaining a VAT number in 2022 can be completed upon the registration of a business or after reaching the above-mentioned threshold in the case of Russian companies. When it comes to foreign companies operating in Russia, these are required to register before they start making deliveries, importing or exporting goods and services in/from Russia. E-service providers are also required to register for VAT in Russia before starting any operation here.
In terms of documents, these must provide information about their registration details (Certificate of Incorporation), proof of reaching the mandatory registration threshold in the case of local companies or an estimate of the turnover when voluntary registration is sought. Foreign companies are required to provide similar documents issued by the authorities in their home countries. It is important to note that foreign businesses must appoint a local representative for tax and VAT registration. The documents must be filed with the Federal Tax Office in Russia and the VAT numbers are issued within a matter of days.
Our law firm in Russia can guide local and foreign businessowners in registering for VAT. An advantage of obtaining a VAT number in Russia is the possibility of easing the procedure of obtaining EORI numbers and trading with companies in the European Union.
We invite you to read about VAT registration in Russia in the scheme below:
New VAT registration rules for e-service providers in Russia
As mentioned above, e-service providers must comply with new regulations when supplying goods and services in Russia. Under these new rules, non-resident companies selling goods and services to companies in Russia must register for VAT here. This new regulation appeared after 2017 when it became mandatory for foreign e-commerce companies selling goods to private consumers in Russia to register for VAT.
Foreign investors providing e-services in Russia must pay attention to the new VAT rates. Our lawyers in Russia can offer assistance to foreign companies’ representatives who want to register for VAT in this country. We can also explain the VAT compliance requirements.
New VAT rates in Russia
According to the Russian Federal Tax Office, some VAT rates have been changed. At the level of 2022, the following rates are available:
- the new standard rate which is now set at 20% (from the previous 18%);
- the reduced 10% rate for various foodstuff, medical and pharmaceutical products remains the same;
- a 0% rate is also in place for certain goods and services sold in Russia;
- a new 16.67% rate for foreign e-service providers was introduced in 2019.
For updates related to the VAT laws and registration requirements, please contact our Russian law firm.
