Russian Federation: Increase of VAT rate to 20%
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Russian Federation: Increase of VAT rate to 20%

The Russian VAT rate is very likely to rise from 18% to 20% starting from 2019. The respective draft law was introduced by the Russian government on June 15, 2018. 

There will be no change to the reduced VAT rate of 10% on a number of foodstuffs, goods for children, medicines, books and periodicals, explain the Ecovis experts.

Sergey Vyssotsky, Director Ecovis Conseco, ECOVIS Conseco, Moscow, Russia”

In exchange for an increase in the rate of VAT, certain compensatory measures are being offered.

The following compensatory measures are being introduced parallel with the rise of VAT rate:
  • reduction of threshold for accelerated VAT refund to exporters. Currently only companies which have paid not less than 7 bln roubles in taxes for the last three years may enjoy accelerated VAT refund; this figure will be decreased to 2 bln. roubles.
  • reduction of 3-month period for carrying out desk audit for the VAT refund
  • abolition of tax on movable property
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