Change to VAT taxation of E-services

19 July 2022

The corresponding changes will enter into force as of 01 October 2022

With reference to our previous Newsletter, dated 05 July 2022, the Russian President signed Federal Law No. 323-FZ (the “Law”) on 14 July 2022. Among other things, the Law modifies the current procedure on calculation and payment of VAT by foreign e-service providers. The corresponding changes will enter into force as of 01 October 2022.

As a result of the changes, the rules previously applicable to VAT payment by foreign e-service providers, via a tax agent, are reinstated — save for Russian individuals beneficiaries, not acting as individual entrepreneurs. In this latter case, foreign e-service providers will keep on calculating and paying VAT to the Russian budget on their own.

Accordingly, we recommend foreign e-service providers and their Russian counterparties thoroughly reviewing their contractual relationships that qualify as “e-services rendering” to assess whether any changes are required to the contract terms and potential practical difficulties connected with the implementation of the new procedure.

We trust you will find these comments useful and remain at your disposal for further questions or assistance on the above.
Please note that this press release is based on information taken from open sources. Neither Lex Evolution, nor its authors, shall not be held liable for its contents, nor for the legal and other consequences of decision taken based on this publication.

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