Taxation of electronic services

Sep, 03 2018

The Tax Code of Russia includes into the list of electronic services:

granting rights of use of computer programs via Internet
advertising services in Internet
data storage and procession with access via Internet
providing domain names
hosting service and a range of other services.

At the moment foreign companies should be registered in Russia for paying VAT only if they provide electronic services to individuals. Foreign companies should submit the documents using the web service on the official website of the Federal Tax Service. After registration they must quarterly pay VAT and share their data and documents in electronic form using their account page.

Starting from January 01, 2019 the new law comes into effect, that establishes an obligation for the foreign e-service providers to pay VAT for services rendered to sole proprietors and legal entities.

For paying VAT it is also necessary to provide the following documents:

Contract or transaction document with marked up VAT sum and specified Individual Tax Number (INN) and Record Validity Code (KPP) of foreign company
Documents that confirm payment to the foreign company including VAT

The law is available on the official website of the State Duma of the Russian Federation.

Author of the article

Taxation of electronic services
Valentina Khlavich
Managing Partner

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