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Foreign organizations and VAT in Russia


				04.04.2022
						The Federal Tax Service of the Russian Federation has been issued new recommendations regarding the payment of value added tax.

Due to the introduction of restrictions on Russia by many countries, foreign organizations providing services in electronic form have encountered obstacles when transferring funds from foreign bank accounts in order to pay VAT in the Russian Federation.

Therefore, the Federal Tax Service of the Russian Federation recommends that Russian legal entities and individual entrepreneurs, who purchase services in electronic form from foreign organizations, as well as other services and goods subject to VAT in the Russian Federation, independently calculate, withhold and pay VAT to the budget of the Russian Federation.

If the buyer calculates, pays VAT to the budget and takes the amount of VAT paid as a deduction all by themselves, foreign organizations won`t need to pay VAT. Thus, the Federal Tax Service of the Russian Federation recommends that Russian organizations and individual entrepreneurs play the role of tax agent and inform foreign organizations of this.

Separately, it is noted that this position has been agreed with the Ministry of Finance of the Russian Federation.

Link to source: https://www.nalog.gov.ru/rn77/about_fts/about_nalog/12085411//

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